Breach of Confidence:

Question: If someone misuses my confidential business recipe or proprietary process in Ontario, what should I do next?

Answer: Reznik Legal Services can help Ontario businesses address breach of confidence when confidential information is shared in a protected context and then misused, including situations involving recipes, proprietary software, and customized processes. In Ontario, a paralegal can help you gather proof of confidentiality, identify who received the information, document the unauthorized use and resulting harm, and prepare an effective demand package or next-step strategy for civil relief. For a practical next step, contact (416) 222-9906 for a free 15-minute consultation to discuss your facts and timeline and confirm whether a breach of confidence claim is a fit under Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574.   If you already have contracts or licensing terms, bring them, plus any messages, NDAs, receipts, timestamps, and examples of the misuse, so Reznik Legal Services can help you move quickly while evidence is still available.

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Misused Business Secrets

In business, the product recipes, proprietary software, systems and processes, among many other things, may be highly valuable and the misuse of such confidential information may result in considerable harm. The field of tort law includes a cause of action, meaning right to bring a lawsuit, known as breach of confidence which relates to the improper use of information by a person or other business with whom the confidential information was previously shared. Interestingly, where breach of confidence involves information that was previously shared, the wrongfulness arises from improper use of the information rather than theft of the information.

The Law

As per the case of Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, a Supreme Court decision, the elements that must be proven within 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.