Protective Orders Alive And Well In Canadian IP Litigation

The Federal Court of Appeal has recently put to rest concerns about the availability of “protective orders” in IP litigation.

Background

In IP litigation, parties are often required to disclose confidential and commercially sensitive information during the discovery process. This can be a significant concern, in particular when the confidential information is being disclosed to a direct competitor.

In Canada, confidential information can be protected through two types of orders with distinct purposes, namely:

“Protective Orders” which apply only to the disclosure and handling of confidential information by the parties and others involved in litigation (for example, experts); and “Confidentiality Orders” governed by Rule 151 of the Federal Courts Rules which restrict access to confidential information contained in materials filed with the Court, which are normally accessible to the public. For decades, the granting of protective orders was an entrenched practice in IP proceedings before the Federal Court (where most Canadian IP disputes are litigated) and were routinely granted on consent. In fact, a standard template for protective orders had been developed over the years by the IP Bar and the Federal Court.

However, over the past couple of years, the availability of protective orders had become uncertain as a result of several conflicting decisions from the Federal Court (see for example: Live Face on Web, LCC v. Soldan Fence and Metals (2009) Ltd., 2017 FC 858; Seedlings Life Science Ventures LLC v. Pfizer Canada Inc., 2018 FC 443, reversed in Seedlings Life Science Ventures, LLC v. Pfizer Canada Inc., 2018 FC 956; Canadian National Railway Company v. BNSF Railway Company, 2019 FC 281; dTechs EPM Ltd v British Columbia Hydro & Power Authority, 2019 FC 539; and Paid Search Engine Tools, LLC v Google Canada Corporation, 2019 FC 559).

One of the issues raised in this recent jurisprudence was whether the established test for “protective orders” in the Federal Court set out in AB Hassle v. Canada (Minister of National Health and Welfare)1 had been supplanted by the more stringent test for “confidentiality orders” set out be the Supreme Court of Canada in Sierra Club of Canada v. Canada (Minister of Finance)2.

Under the AB Hassle test, the moving party has to establish that:

it believes that its proprietary, commercial and scientific interests would be seriously harmed by producing information upon which those interests are based; and in...