Jurisprudence récente – information confidentielle – secrets de commerce

Voir la décision référée plus bas – un bon résumé de jurisprudence pertinente canadienne en secrets de commerce)

 http://www.canlii.org/en/on/onsc/doc/2010/2010onsc2733/2010onsc2733.html

 Aquafor v. Whyte, Dainty and Calder, 2010 ONSC 2733 (CanLII)

[3]                       Aquafor claims that Mr. Whyte and Mr. Dainty were fiduciaries and that the manner in which they departed Aquafor was a breach of their fiduciary and other duties to the company.  In particular, Aquafor alleges that Mr. Whyte and Mr. Dainty breached their duties by: secretly planning to leave and set up a competitive firm; failing to give adequate notice of their departure; soliciting clients; soliciting employees; appropriating corporate opportunities; and using confidential information to secure future work for Calder.

 

[81]                    Aquafor also relies on the GasTOPS case in which departing employees of an engineering consulting firm were found to have appropriated corporate opportunities of the firm.  I distinguish that case.  The employees were found to have developed a competing software system and marketed it to the firm’s customers, using confidential business information.  That is quite different from the case of professional engineers setting up their own practice to provide engineering services, particularly where the client is the one who wishes to engage those services. 

 

  qui réfère à:

 GasTOPS Ltd. v. Forsyth, 2009 CanLII 66153 (ON S.C.)

 http://www.canlii.org/en/on/onsc/doc/2009/2009canlii66153/2009canlii66153.html

 Duty to Not Misappropriate Trade Secrets or Confidential Business Information

 [117]              Regardless of whether an employee is characterized as fiduciary or key, he or she is barred from misappropriating the former employer’s trade secrets and/or confidential information and from using such information to compete with the former employer. This is one of the only exceptions to the general principle of an employee’s right to competition listed in Geoffrey England’s Employment Law in Canada, 4th ed., looseleaf (Aurora: Canada Law Book). What constitutes a trade secret is difficult to determine or precisely identify, however it generally pertains to the nature of the business. The English decision of Faccenda Chicken Ltd. v. Fowler, [1986] 1 All E.R. 617 (C.A.) suggests, it is possible to identify a trade secret by reference to:

 

1)            whether employees know the material or information in question ought to remain confidential;

 

2)            the nature of the material itself;

 

3)            whether the employer has emphasized the confidential nature of the material;

 

4)            whether the material can be separated from other, non-confidential material.

 

 

 

[118]              Geoffrey England lists these factors as weighing in favour of finding a trade secret:

 

(a)               if the material in question affords the employer a comparative advantage such that disclosure of that information would seriously harm the firm;

 

(b)               if the employer can prove that it has made reasonable efforts to limit access to, and dissemination of, the material within the firm;

 

(c)               if the custom and practice of the industry is generally to regard that particular kind of information as confidential;

 

(d)               if the material in question is not accessible to the rest of the industry;

 

(e)               if the material in question can be categorized as “pure and applied” research such as a novel invention, technical or design specifications, technical manufacturing or construction processes, chemical formulae, secret recipes or craft secrets.

 

 

 

[119]              Conversely, “confidential information” tends towards the more administrative aspects of a business.  As held in R. v. Stewart, 1983 O.R. (2d) 225, confidential information includes lists of suppliers; lists of customers and their needs; instructions as to manufacturing processes; lists of employees and relevant employment information; and computer programs cataloguing the firm’s business.  For information to be protected as confidential information, it must carry the indicia of secrecy and satisfy the legal test for confidentiality (Khan v. RDMI Inc., [2001] O.J. No. 233).  Of particular interest here are customer lists.  Generally, courts protect employees who happen to remember those lists for their own purposes post-employment but will not protect those who are found to have memorized lists for the exclusive purpose of canvassing them for personal business post-employment.

 

[120]              The purpose of the law of trade secrets is to provide protection for information-based assets that are not publicly known by prohibiting others from using, disclosing or otherwise misappropriating the information.  The terms “confidential information” and “trade secrets” are recognized in the jurisprudence as being synonymous concepts. Numerous decisions have imposed a duty of confidence on former employees, whether or not they are fiduciaries. The main principle articulated in these decisions is that trade secrets or other information obtained in confidence while in the employ of an employer is not to be disclosed or used by former employees.  Any disclosure or use of such information is a breach of the duty of confidence.

 

[121]              In CPC International Inc. v. Seaforth Creamery Inc., [1996] O.J. No. 3393 (Gen.Div.), Cumming J. stated at para. 22:

 

… To constitute a trade secret, the information must not be of a general nature, but must be specific. The specific information must not be generally known to the public but it [may] be acquired from materials available to the public with the expenditure of time and effort. The owner of that specific information must treat it as confidential and it must be clear that the owner regards the information as secret. The information should only be communicated to an employee on a need-to-know basis and within the constraint that the owner shows his/her intention to maintain the secrecy of the information. If there is disclosure to a third party beyond the employment relationship, the owner should require of that party that there cannot be disclosure or use in any way not authorized expressly by the owner.

 

[122]              The confidential information need not be committed to a document that is physically removed from one’s former employer.  Committing information to memory is tantamount to the physical taking of confidential information.

 

[123]              In Matrox Electronic Systems Ltd. v. Gaudreau, [1993] Q.J. No. 1228 (S.C.J.), Guthrie J. discussed the “springboard” principle, which prohibits an individual from using information obtained in confidence as a springboard for activities detrimental to the person who made the confidential communication and requires such an individual to be careful to use only portions of the information that are in the public domain so as not to gain an advantage over the public. He stated at para. 83:

 

What is really being protected in situations of this nature is the original process of mind. The protection is enforced against persons who wish to use the confidential information without spending the time, trouble and expense of going through the same process. One can reconcile the springboard principle with the overriding principle denying confidence in information in the public domain, by describing the “springboard” as a measure of the scope and duration of the obligation enforcing good faith upon an ex-employee while the rest of the world catches up.

 

[124]              Whether or not a particular subject matter is a trade secret is a question of fact. The onus is on the plaintiff to demonstrate that the information alleged to have been misappropriated was at all material times confidential. To determine whether information has the necessary “quality of confidence”, courts have considered:

 

(a)               The extent to which the information is known outside the business;

 

(b)               The extent to which it is known by employees and others involved in the business;

 

(c)               Measures taken to guard the secrecy of the information;

 

(d)               The value of the information to the holder of the secret and to its competitors,

 

(e)               The effort or money expended in developing the information;

 

(f)                 The ease or difficulty with which the information can be properly acquired or duplicated by others; and

 

(g)               Whether the holder and taker of the secret treat the information as secret.

 

[125]              In employment-related cases, the courts also consider whether:

 

(a)               the employer possesses a trade secret;

 

(b)               the employee knew it was secret;

 

(c)               the employee acquired knowledge it during his/her employment;

 

(d)               the employee has, after termination of his/her employment, used of this knowledge improperly.

 

[126]              In my view, the defendants were well aware at all material times that the business opportunities GasTOPS was pursuing and its proposals to potential customers was confidential business information. I am also of the view that they were subject to a fiduciary duty not to use such information directly or through MxI to compete unfairly with the plaintiff.  GasTOPS spent a great deal of time and money developing products and solutions for its customers, especially as its programs were “hard coded” (designed for a particular engine and/or aircraft). There can be no doubt that the confidential business information to which the defendants were privy at GasTOPS would be extremely valuable to GasTOPS competitors. It seems to me that confidential business information of which an employee learns during his/her employment over which a duty of confidentiality applies during the employment might also be subject to a duty of confidentiality after the employee leaves his/her employment, especially vis-à-vis customers or potential customers of the former employer. The defendants owed a higher degree of confidentiality with respect to such information in dealing with GasTOPS’ customers and potential customers than in dealing with those with whom GasTOPS had formed no business relationship during the defendants’ terms of employment there.

 

[127]              In Delrina Corp. (c.o.b. Carolian Systems) v. Triolet Systems Inc., reflex, [1993] 47 C.P.R. (3d) 1 (Ont.Gen.Div.), the defendant was an experienced computer programmer employed by the plaintiff to re-write the source code for an application program. The defendant formed his own company and created a program to compete with the plaintiff’s program, and the plaintiff alleged misappropriation of trade secrets.  O’Leary J. stated:

 

In my view, the evidence before me does not enable me to conclude that what has gone into the development of this suite of programmes is of so confidential a character that respondent should be restrained… I emphasize that I am not here referring to the copying of the suite of programmes. That respondent plainly cannot do. It is common cause that much work, skill and time is needed to produce a suite of programmes of this kind. If respondent were permitted simply to copy it, he would be unfairly nullifying the advantage of the “long start” over anyone else to which applicants are entitled. To that limited extent, the suite of programmes is, in my opinion, a trade secret …

 

O’Leary J. found that if the defendant wanted to re-write the suite from scratch, he could do so, so long as he “wipe[d] clean from the slate of his memory (as if that were possible) any recollection he may have of the things which it seemed to him were appropriate for inclusion in such a suit of programmes, or of appropriate formulae, or the like.”

 

[128]              In Software Solutions Associates Inc. v. Depow, [1989] N.B.J. No. 419 (N.B.Q.B.), Higgins J. discussed the criteria necessary to establish that information contained in computer software can be considered a trade secret, quoting an article that concluded:

 

[C]omputer software that is distributed pursuant to a licence agreement containing confidentiality provisions, and that is in all other respects treated as being confidential and proprietary property of the owner, would be a trade secret. Similarly, any information related to a unique hardware design will be a trade secret, provided of course that it is treated as such by the owner.

 

The information sought to be protected must be specific in nature.

 

[129]              As with trade secrets, the facts of each particular case are crucial in determining whether a breach of confidence has occurred. The subject of an employee’s duties with respect to confidential information obtained in the course of employment was considered Chevron Standard Ltd. v. Home Oil Co., [1980] A.J. No. 656, aff’d [1982] A.J. No. 744 (C.A.), wherein Moore J. considered at para. 110 “the nature of the information, the employees’ relation to it, the amount of knowledge possessed and the circumstances in which it was obtained and when it was obtained” as some of the factors to be considered. Moore J. also held that there is an onus on the plaintiff to establish that the information was confidential and that it was used to the plaintiff’s disadvantage.

 

[130]              The facts in Clayburn Industries Ltd. v. Piper, [1998] B.C.J. No. 2831 (B.C.S.C.), are very similar to the facts of this case:

 

The information which was available to Messrs. Schoen and Piper was variously described. It included key contacts at various customers: who actually made the decision within an organization, who could agree by a “hand shake” and who had “constraints” on business decision making. It also included what products had previously been installed at a customer (how those products performed, what was and was not preferred by the customer), what workers from the union hall were good and what workers weren’t (who should be “name-hired” and who had been found by which customers to be good or bad), the budget a client might have for repair or new construction in the upcoming year, the projects likely to require bids and those that would not be bid, what were the product costs of the plaintiffs, what were the standard markups of the plaintiffs for both product and labour costs, and technical information about the products of the plaintiff (productivity rates, installation practices and procedures, safety standards and practices).

 

After reviewing all of the evidence, I am satisfied that the plaintiffs have not shown that any lists were actually taken by Messrs. Schoen and Piper when they left the employ of the plaintiffs. As well, it is clear that some of the information that they took with them included information which would generally be available to anyone who made diligent inquiry.

 

However, I am satisfied that much of the information they knew as a result of their employment with the plaintiffs was of a confidential nature and that, in accordance with the decisions dealing with these matters, neither was in a position to use such confidential information. I find that Messrs. Schoen and Piper used the following confidential information improperly after they left the employ of the plaintiffs… (paras. 32-34)

 

[131]              The defendants submit that in order to be capable of protection, the trade secret must be information that is defined with some degree of precision.  In other words, it must be identified by the plaintiff with sufficient specificity.

 

[132]              A breach of confidence will be established where: (1) the information has the necessary quality of confidence; (2) the information was communicated in circumstances giving rise to an obligation of confidence; and (3) there is an unauthorized use of the information to the detriment of the party communicating it. (See Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] S.C.J. No. 83, at para. 129.)

 

[133]              The courts have used a “reasonable person” test to determine whether information embodies the necessary quality of confidence.  The courts examine whether a person, acting reasonably, should have expected the information to be confidential: if the person should have realized that the information was to be maintained in privacy, there will be an implied obligation to maintain it in confidence. In Coco v. A.N. Clark (Engineers) Ltd., [1969] R.P.C. 41, Megarry J. stated at 48:

 

It seems to me that if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon his the equitable obligation of confidence. In particular, where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture … I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence.

 

The fact that an employer did not tell its employee that information was confidential is not determinative. The test is whether a reasonable person standing in the shoes of the recipient of the information would have realized that the information was being given in confidence.

 

[134]              In Matrox Electronic Systems Ltd. v. Gaudreau, supra, the court acknowledged the difficulty of proving misuse of confidential business information through direct evidence in some cases.  Guthrie J. stated at para. 94:

 

In cases involving confidential business information, misuse can rarely be proved by convincing direct evidence. In most cases, employers must construct a web of perhaps ambiguous circumstantial evidence from which the Court may draw inferences which convinced it that it is more probable than not that what employers alleged happened did in fact take place. Against this often delicate construct of circumstantial evidence, there frequently must be balanced the testimony of the employees and their witnesses who directly deny everything.

 

[135]              In Computer Workshops Ltd. v. Banner Capital Market Brokers Ltd., [1988] O.J. No. 223 (H.C.), the court recognized that computer software, including components, methodologies, designs, specifications, schematics and knowledge of the trial and error process employed creating it falls within the ambit of trade secrets and confidential information. The court held that a trade secret can exist in a product even where all the components thereof are in the public domain on the grounds that a trade secret can exist in the original combination or characteristics of components or in the unique design of the product as a whole.

 

[136]              Customer information has also been held to be confidential information in need of protection by the court, as it is valuable and forms part of the good will of the employer and was developed over time at the employer’s expense.  A former employee who had access to such information and used it after leaving the employer could seriously injure the employer’s business by springboarding to activities detrimental to the former employer.

 

[137]              In Metaphore Corp. v. Protek Systems (London) Inc., [2000] O.J. No. 4975, I stated at paras. 8-9:

 

Given that Metafore has designed unique systems for its clients and is aware of the needs of these clients, Protek, with former Metafore employees, is a threat to Metafore’s business. A new company entering this specialized field would not pose such a threat. It is the confidential information that Metafore has about its clients that is so valuable.

 

Protek with former employees of Metafore can compete for the business of Metafore clients on the basis that a shift from Metafore to Protek will be seamless as the same employees will be servicing the client and making recommendations on improving their systems.

 

[138]              Confidential business information may include customers’ names, contact persons for customers or potential customers, customers’ or potential customers’ needs and preferences, the rates the business (employer) proposes to charge the customer and the price that the customer is prepared to pay or is paying. A particular document containing the information need not have been removed from the employer to find that confidential information has been misappropriated. (See Trauzzi at paras. 62-63.)

 

[139]              In addition to the special knowledge of the target and actual customers of the employer, the knowledge of the employer’s policies, procedures and selling strategies in relation to their customers can constitute confidential information, as it makes it possible to undercut the former employer and to promise a seamless transfer of business to induce the customer to move its business to a new supplier. In Scantron Corp., Eberhard J. stated at para. 20 that the freedom to compete refers to skill and knowledge rather than confidential information, because “This information could include not only the special knowledge of the target customer but also knowledge of the employer’s policies and procedures making it possible to undercut the former employer with a view to inducing the customer to change from its current supplier to the former employees.”

 

[140]              Former employees may be liable to their former employer for wrongful appropriation of corporate opportunities based on misuse of confidential information.  In Omega Digital Data Inc. v. Airos Technology Inc., [1996] O.J. No. 5382, the individual defendants held senior positions at the plaintiff employer and were, together, intimately familiar with virtually all aspects of its business. While employed by the plaintiff, they were involved in negotiations with a potential distributor of the employer’s product that did not succeed; within days of leaving the employers, they were engaged in similar discussions on their own. Sharpe J. noted at para. 30 that the following factors would be relevant in considering whether or not the defendants wrongly appropriated the plaintiff’s corporate opportunity: “the pursuit by the defendants of precisely the same market niche [and] the evidence of approach to the same customers and of deals and arrangements with co-venturers actual or proposed of the plaintiff.”

 

One Response to “Jurisprudence récente – information confidentielle – secrets de commerce”

  1. Financial Planning Advice: 401(k) Rollover Information your Financial Planner Might not Want to Tell You? | financialgoodsite.info Says:

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