Breach of Confidence:

Question: What legal help in Ontario can I get if my business recipe or confidential process was shared under a duty of confidence and then misused by another party?

Answer:   Reznik Legal Services can help you in Ontario, including Vaughan, Rexdale, Newmarket, King City, and Thornhill, assess a potential breach of confidence claim when confidential information like product recipes, proprietary software, systems, or processes was shared in confidence and then misused, which can be actionable in tort.   Under the Supreme Court approach in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, the usual issues focus on whether the information had the necessary quality of confidence, whether it was communicated in circumstances importing an obligation of confidence, and whether there was unauthorized misuse that causes harm to the party who shared it.   If you think another business used your confidential know-how without permission, contact (416) 222-9906 to book a free 15-minute consultation and learn your next steps.

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.  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.