In Canada, the terms “confidential information,” “trade secrets” and “know-how” are used interchangeably in reference to intellectual property (IP). For the purposes of this article, we will avoid using the term “trade secret” because it holds a specific meaning in the U.S.
Confidential information, or know-how, can be broadly defined as a form of intellectual property (IP) that meets the following criteria:
In Canada, the majority of laws governing confidential information have developed over time from judicial decisions (common law).
There is other legislation that governs privacy and the disclosure of personal information collected by the government, public bodies and private companies.
In practical terms, this means there is no legislation to look at for guidance on the subject and, beyond the generic information presented here, a lawyer should be consulted. However, this is in direct contrast to the United States, which has enacted specific legislation governing trade secrets.
To become confidential information, something must first have commercial value. Typically, if neither you nor anyone else can generate profits from the information, then it has no commercial value.
In the absence of a confidentiality agreement stating the contrary, information in the public domain is not confidential.
Note that the owner of any information that he or she wishes to protect must take reasonable steps to keep the information secret, otherwise it is not confidential. For example, a startup who explains their business model in front of a large audience cannot later claim it is confidential information.
Breach of confidence is the release or misuse of confidential information. It creates a legal cause of action, which means that the harmed party can sue. When an owner of confidential information believes there has been a breach of confidence they must generally prove the following in court:
Note: The content in this article is for purposes of general information only. It is not legal advice.
1Lac Minerals Ltd. v. International Corona Resources Ltd.,  2 S.C.R. 574. Retrieved December 8, 2009, from http://scc.lexum.umontreal.ca/en/1989/1989scr2-574/1989scr2-574.html
2Cadbury Schwepps Inc. et al. v. FBI Foods Ltd. et al,  1 S.C.R. 142. Retrieved December 8, 2009, from
Access to Information Act, R.S., 1985, c. A-1. Retrieved December 8, 2009, from http://laws.justice.gc.ca/en/A-1/index.html
Competition Act, R.S., 1985, c. C-34. Retrieved December 8, 2009, from http://laws.justice..gc.ca/eng/C-34/index.html
Kokonis, J. (1994). Confidential Information. In G. Henderson et al (Eds.). Copyright and Confidential Information Law of Canada(pp. 325-327). Toronto: Carswell.