Breach of Confidence:

Question: Do I have a breach of confidence claim in Ontario if someone misused my company’s confidential recipe or process?

Answer: In Ontario, Cross Legal Services can help you assess a possible breach of confidence claim when confidential business information was shared in a confidential context and then misused by the recipient for unauthorized purposes. The main proof points typically track Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574: the information had to be confidential, it had to be communicated in confidence, and there had to be misuse by the party who received it, even where the information is used rather than outright stolen.   If you are dealing with recipe, proprietary software, workflow, or similar “business secrets,” gather your sharing documents, confidentiality terms, and evidence of the misuse before sending any further materials, then book a free consultation at (289) 443-0675 to discuss next steps and potential remedies in Ontario.

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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.  Generally, 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.

Note: Please contact Cross Legal Services by phone at: (289) 443-0675 to discuss any specific questions that you may have.

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.