Breach of Confidence:

Question: Can you help me if someone misused my confidential business recipe or proprietary process in Ontario?

Answer: Yes. SFG Paralegal Services LLP supports Ontario businesses with paralegal guidance on breach of confidence claims when confidential information was shared in confidence and then misused, including situations involving unique processes, proprietary software, or trade recipes.   In Lac Minerals Ltd. v. International Corona Resources Ltd., Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, courts look for (1) the information had a necessary quality of confidence, (2) it was communicated in circumstances importing an obligation of confidence, and (3) it was misused without authorization.   If you can document what was shared, how it was protected, and how it was used, reach (888) 398-0121 to discuss next steps and protect your rights in Ontario.

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Misused Business Secrets

The success of a business may rely heavily upon secret recipes, proprietary software, unique systems, and customized processes; and accordingly, information relating to these key aspects may be highly valued with misuse of such confidential information quite harmful. In tort law, breach of confidence involves the wrongful use of information that was openly shared with the party that subsequently misuses the secretive information; and in this respect, breach of confidence differs from theft of trade secrets which would involve an element of misappropriation.

The Law

Per the Supreme Court in the case of Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, the elements requiring proof so to constitute a breach of confidence case are:

• The information conveyed was confidential;
• The information was communicated in confidence; and
• The information was misused by the party to whom it was communicated.

Specifically, per Lac Minerals Ltd., the Supreme Court said:

As a particularly interesting example case, Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 involved the licensing of the recipe for Clamato juice by Duffy-Mott (a company later acquired by Cadbury Schweppes Inc.) to Caesar Canning who then contracted production to FBI Foods Ltd.  After Cadbury Schweppes acquired Duffy-Mott, Caesar Canning was notified of termination of the licensing agreement; however, FBI, who later acquired assets of Caesar Canning, made use of the recipe despite a lack of authorization to do so.

Conclusion

Improper use of secretive information may constitute as the tort of breach of confidence where information was confidential, information was communicated within a confidential context, and the information was then misused by the party that received the communication.