Many organizations frequently need to disclose and allow others
to use their sensitive or proprietary non-public information or
trade secrets, such as in the context of the purchase and sale of a
business, partnering activities with other organizations, or
engaging employees or contractors to perform services. Unauthorized
use, disclosure or misuse of such valuable information may
detrimentally impact an organization's competitive advantage or
A recent decision of the Ontario Superior Court of Justice in
Sabre Inc. v. International Air Transport Association, 2011 ONSC
206 (CanLII) emphasizes that it is neither safe nor sufficient to
assume that commercially valuable information shared in commercial
dealings is automatically subject to a duty of confidence.
In this case Sabre sued IATA for breach of confidentiality for
selling to the airline industry summarized ticket sales information
which included data obtained by IATA from Sabre.
The Court found that although the information provided by Sabre
may have been commercially valuable, it wasn't communicated in
circumstances giving rise to a duty of confidence and therefore
IATA wasn't subject to confidentiality obligations. While the
decision was based on specific facts relating to the airline
industry and as between the parties, it nevertheless reinforces the
importance of obtaining written confidentiality agreements from
those to whom confidential information is provided.
Here are additional recommended practices to ensure that
confidential information is protected:
Monitor, identify and document all confidential information and
Employ appropriate physical and electronic security measures to
limit access and protect confidential information (i.e. password
protections; combination locks; firewalls; safety vault).
Be pro-active in reviewing public disclosures by employees,
including in promotional materials and external publications, to
avoid inadvertent disclosure of trade secrets (i.e. patentable
Prior to disclosing trade secrets and confidential information
to public or regulatory bodies, ensure familiarity with the
legislative protections applicable to the disclosed
Include clear and express confidentiality clauses in employment
agreements and contractor agreements. These clauses should prohibit
the unauthorized use or disclosure of confidential information, and
require that such information be returned at the end of the
employment or services relationship.
Ensure third parties enter into strict confidentiality
agreements to prevent unauthorized disclosure or use of
confidential information, and monitor third parties for
Disclose confidential information only to persons on a
"need to know" basis.
Securely destroy or dispose of documents and materials
containing confidential information when they are no longer
React, respond and remedy breaches of confidentiality strictly
Establish procedures for periodic reviews of the optimal
measures to protect trade secrets or confidential information.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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