No Secret, No Remedy: Tips For Preserving Your Trade Secret Rights

U.S. court decisions suggest that companies who sue for theft of trade secrets are at risk of losing the lawsuits if the measures they took to protect their trade secrets were insufficient1. Although there are differences between U.S. and Canadian trade secret law, Canadian companies with trade secrets critical to their business should take note to avoid a similar fate.

While it is true that the protection offered by a trade secret can last indefinitely, this assumes that the trade secret remains a secret. Unlike patents, trademarks and copyrights that are protected by federal statutory regimes in Canada, trade secrets are not granted statutory protection by Canadian federal law. Instead, companies primarily rely on the common law in Canada for remedies for trade secret theft and other misappropriation, and typically pursue these remedies in the provincial courts by suing for breach of confidence.

In an action for breach of confidence, the onus is on the plaintiff to prove that the misappropriated information was confidential and that the information was communicated in confidence2. In other words, the plaintiff must demonstrate that the information was in fact a secret and that the individual(s) who misappropriated this information knew it was a secret. Canadian Court decisions reveal how judges make these types of determinations, which offer practical tips for owners on how to maintain legal protection for their trade secrets.

In GasTOPS Ltd...