Uniform Trade Secrets Act The
Uniform Trade Secrets Act, adopted by the Uniform Law Conference of Canada in 1989, would provide civil remedies for the breach of trade secrets. That
Uniform Act defines "trade secrets" as follows: To date, the Uniform Act has not been enacted into law by any of the Legislatures, but the definition has been incorporated in the federal
Security of Information Act.
Civil Remedial Relief - Common Law Provinces In all the provinces but Quebec, trade secrets are governed by the common law, ultimately derived from the English common law as interpreted and applied in Canada. The Canadian definition of trade secret is based on Canadian case law and doctrine, and also draws on American and English case law. In
Lac Minerals Ltd. v. International Corona Resources Ltd., the
Supreme Court of Canada held that a breach of confidence action is
sui generis and the courts may rely on all three traditional jurisdictional bases for action (contract, equity and property) to enforce the policy of the law that confidences are to be respected. In common law, there are essentially five types of
civil action that a
trade secret holder can rely on to seek protection of its trade secrets before a court of justice: •
breach of contract (expressed or implied provision), • breach of confidence, • breach of fiduciary duty, • unjust enrichment and • wrongful interference with the contractual relations of others. The
Supreme Court of Canada stated in
Cadbury Schweppes Inc. v. FBI Foods Ltd. that all these types of actions coexist in the Canadian judicial system and remain available to the trade secret holder.
Civil Remedial Relief - Quebec In Quebec, trade secrets are governed by provisions under the
Civil Code of Quebec. An action for breach of
trade secrets or confidential business information generally arises either from a contractual liability action or, in the absence of a contract, from a civil liability action. The
Code deals specifically with
trade secrets in one article that provides for a defense where disclosing the secret is in the public interest, and in one that describes how a loss resulting from disclosure is to be calculated. However, none of its provisions define the concept of trade secret. The
Quebec Court of Appeal has ruled in
Continental Casualty Company v. Combined Insurance Company that those who own
trade secrets (
secrets de commerce) are entitled to seek protection and that
Quebec courts are competent to grant remedies in the case the plaintiff can evidence its ownership of them.
Contractual Sanctions Two important forms of contract used by employers in Canada to protect their
trade secrets and confidential information are
non-disclosure agreements and
non-competition agreements, which are also known as
confidentiality agreements and
restrictive covenants. According to
Faccenda Chicken Ltd. v. Fowler, ex-employees, post-termination, may use their general skills and knowledge anywhere but they may not use or divulge their former employer's trade secrets. Exceptionally, ex-employers may also be able to enjoin a former employee's use of non-trade secret information where that information has been obtained from records which qualify as trade secrets. According to
International Tools Ltd. v. Kollar, in Canada the length of a
permanent injunction to force a defendant to cease using the plaintiff's information should not normally extend beyond the time that the plaintiff's trade secrets remains a secret which is exclusively known to the plaintiff and its confidants. In
Cadbury Schweppes Inc. v. FBI Foods Ltd. Justice Binnie concluded that the form of relief for breach of confidence was “dictated by the facts of the case rather than strict jurisdictional or doctrinal considerations”. He also stated that “whether a breach of contract in a particular case has a contractual, tortuous, proprietary or trust flavour goes to the appropriateness of particular
equitable remedy but does not limit the court’s jurisdiction to grant it”. == Criminal Sanctions ==