The Federal Court's Back-to-Back Guidance On The Implied Undertaking Rule

• Published date: 29 April 2025
• Subject Matter: Intellectual Property, Energy and Natural Resources, Energy Law, Copyright, Trademark, Renewables
• Law Firm: Cassels
• Author: Mr Mark Davis, Jessica Zagar and Carly Valentine

The implied undertaking rule prohibits litigants from using information obtained through the discovery process for any purpose other than the proceeding in which the information was disclosed. The Federal Court recently released back-to-back decisions on requests for relief from the rule. In the first, GE Renewable Energy Canada Inc. v Canmec Industrial Inc., 2025 FC 478 [GEREC], a copyright action, the Court granted relief from the implied undertaking rule so that information disclosed during the discovery process could be used as the basis for a claim in a second proceeding. In the second decision, a trademark infringement and passing off action, Seylynn (North Shore) Development Limited Partnership v Denna Homes Group et al, 2025 FC 491 [Seylynn], the Court refused to lift the implied undertaking to allow information obtained on an examination for discovery to be used at a hearing in a second proceeding.

While the Court applied a consistent legal framework of the rule in each decision, it reached opposite results. The Court also commented that, in the context of intellectual property litigation, relief from the implied undertaking will be analyzed in the same manner applied in other contexts.¹

The Implied Undertaking Rule

The implied undertaking rule provides that parties are deemed to undertake to the Court that they will keep information obtained during pre-trial discovery confidential and use it only for the purpose of the litigation in which it was obtained. As set out by the Supreme Court of Canada, the purpose of the rule is to encourage fulsome pre-trial disclosure and protect the litigant's privacy rights in compulsory disclosure.² The implied undertaking rule has been recognized by the Federal Court as part of procedural common law.³ It has also been codified by certain provinces as the similar but distinct "deemed undertaking rule."⁴

The Court has discretion to grant relief from the implied undertaking rule in "exceptional circumstances,"⁵ including where doing so is necessary to impeach a witness who gives contradictory evidence in a different proceeding.

GE Renewable Energy Canada Inc. v Canmec Industrial Inc., 2025 FC 478: The Implied Undertaking Is Spent or, Alternatively, Waived

Rio Tinto hired GE Renewable Energy Canada Inc. (GEREC) to refurbish a power plant. In doing so, GEREC shared manufacturing drawings with the defendant, Canmec Industrial Inc (Canmec). Later, GEREC claimed that Canmec infringed copyright by using GEREC's...