London’s High Court has refused to hear parts of a software copyright case after a Spanish startup Trappit claimed American Express ignored an NDA and unlawfully copied its flight rebooking software.
Trappit’s sueball against American Express Europe was partially run out by Mr Justice Snowden earlier this month, after the judge concluded that an ongoing parallel case in Spain meant the High Court did not have jurisdiction to hear claims brought by Trappit’s Panamanian branch in London.
A significant part of the complex and storied case will be heard, however, because Trappit’s Spanish subsidiary survived Amex’s attempt to have the entire case thrown out. The case alleges that Amex copied Trappit’s flight booking software after getting a peek at its functionality under NDA.
In the early 2010s Trappit’s directors, Martin Lazaro and Daniel de Carvajal, had developed a software platform called ARPO. This was advertised as a money-saving platform for people booking flights online. ARPO, the High Court heard, automatically scanned flight booking sites for cheap journey prices. Customers would book flights through a frontend website powered by ARPO. If ARPO found lower ticket prices for that journey being advertised later on, it would automatically cancel the journey and rebook it at the new cheaper rate.
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Keen on licensing ARPO to Amex, Trappit met company reps in 2014 after emailing them a mutual non-disclosure agreement (NDA). Amex wanted the NDA governed by English law while Spain-based Trappit wanted it governed by Spain’s courts. The document they eventually signed included this clause:
14. Assignment. Neither party may assign or otherwise transfer this Agreement, or any of its rights and obligations hereunder, to any third party without the consent of the other party.
Around the same time as Trappit and Amex met, the latter was splitting its Global Business Travel division off into a separate company called GBT Travel UK Ltd. A GBT rep told Trappit that Amex wasn’t interested in licensing ARPO and the potential deal fell through.
Crucially, there was no formal transfer of the NDA from Amex to GBT.
Whether or not Amex broke the NDA will be decided by the High Court in due course but Trappit’s directors believed the American company had definitely done something bad. In 2015 they filed a criminal complaint in Madrid saying Amex had illegally copied ARPO, naming nine Amex directors as personal defendants. In Spain copyright infringement can be treated as a criminal offence carrying prison sentences.
Mr Justice Snowden said in his judgment: “I note that the [Spanish criminal complaint] did not include a claim by Trappit Tec in contract based upon the NDA. Rather, Trappit Tec alleged that the NDA had been used as part of a fraudulent scheme by the Spanish defendants to gain access to the ARPO system and that it had then been copied (reproduced or plagiarised).”
Pick a court
A Spanish investigating court discontinued the case after receiving a (disputed) expert report about whether Amex’s competing product was a copy of ARPO. Meanwhile both of Trappit’s Spanish and Panamanian corporate presences filed a High Court civil case against Amex, in April 2020. Amex applied to have the case discontinued, citing an EU law known as Brussels I Recast.
Article 25 of the Brussels I Regulation (recast) “gives priority to a court nominated in an exclusive jurisdiction clause, allowing that court to continue with its proceedings even if another court in the EU was seised of the claim first,” as explained in depth by law firm Clifford Chance [PDF].
In other words, it stops EU-based companies starting new and competing lawsuits around the bloc if one country’s courts look likely to rule against them. You pick one court and fight your case there.
Tappit’s case against Amex began before the UK formally left the EU on 1 January 2021, and so benefited from EU law applying to it. The company said that in 2015 the intellectual property behind ARPO was transferred from its Panamanian arm (Trappit SA) to its Spanish branch (Trappit Tec).
Hearing Amex’s arguments that neither company was entitled to sue it, Mr Justice Snowden ruled: “I therefore conclude (and the better argument is) that the jurisdiction clause in the NDA applied to all the claims in the English Proceedings, but that it only binds AmEx Europe and Trappit SA as the original signatories to the NDA.
"The effect of Article 25 is that the English courts therefore have no jurisdiction over the claims brought by Trappit SA against AmEx Europe in the English Proceedings.”
Thus, while the Panamanian company’s claim against Amex has failed, the Spanish one can continue fighting the case. The judgment, dense even by High Court standards, can be read here.
Amex failed to have the remaining parts of Trappit Tec’s claim thrown out for being vexatious or an abuse of process, so a full trial will take place in due course. The case continues. ®