Canada: Strengthening Trade Secret Protection In Canada

Staying a step ahead of competitors is key in innovative technology and life sciences industries. A minority of innovations are protected by patents, which provide a time limited monopoly to exploit an invention, in return for publicly disclosing it. Many advancements are kept as trade secrets, meaning they are not disclosed at all. Trade secrets can include either business information or technical information. The hallmarks of a trade secret are that (a) it is not generally known, (b) it has commercial value because it is secret, and (c) measures are taken to keep it secret. 

This article provides a brief view of the Canadian landscape for trade secret protection, and potential for legislation to strengthen trade secret protection.

Former business partners

Business collaborations between two companies can be highly productive and profitable. They also present a risk for trade secret misappropriation. The Supreme Court of Canada recognized and enforced a trade secret in a case involving involving two companies that were former business collaborators1. Cadbury terminated a license to FBI Foods to make Clamato, the tomato/clam broth beverage. There was no express confidentiality clause in their agreement. After the business arrangement ended, the former licensee, FBI Foods, used its knowledge of the Clamato recipe to springboard ahead its own version of the tomato beverage (clam broth-free). The Clamato brand owners weren't the first to mix tomato juice and clam broth with spices, but their own version of it was a protectable trace secret. FBI foods was held liable for damages for misappropriating the trade secret. 

Departing employees

When employees leave a company, there is also a risk that they may take trade secrets with them. Courts have enforced trade secrets in situation where departing employees misappropriate information and take it to a competing business. In one example, a departing employee took trade secrets for commercial scale manufacturing of Hellman's Mayonnaise to a private label manufacturer. The misappropriated information transformed the latter company's product from soupy, runny mayo to nicely whipped mayo2. Again, the misappropriator was held liable.

Trade Secrets Matter More Now

Information has always been valuable, whether customer lists, manufacturing processes or secret formulas. There are fast-growing technologies and industries in our digital age that are based on information. For example, artificial intelligence is based on rapid, complex processing of information. The entire livelihood of a company may depend on its algorithms and computer code. 

Information has also never been easier to misappropriate. Competitors, departing employees and hackers can steal gigabytes of information with a keystroke. Years of research can be readily pocketed on a flash drive or exported from company headquarters to a network intruder in a living room on the other side of the world.

Canada Compared to Other Regions

The Canadian courts have taken a flexible approach to trade secret enforcement. In Canada, the tort of breach of confidence arguably is available against any misuse of confidential information, even if not a trade secret. Flexible remedies may be used to put the trade secret owner in as good a position as it would have been but for the breach. Companies typically have a more realistic opportunity to get an interlocutory injunction in a trade secret case than in a patent infringement cases. This is a good basis from which to improve trade secret protection. 

In English Canada, trade secrets protection has its roots in common law and equity, which is judge made law. No federal government or provincial government has codified its trade secret law in a statute. Codifying the law provides more certainty than case law. It also provides an opportunity to broaden and strengthen trade secret law as it exists in court cases. Gaps can be eliminated and new remedies created. 

In the U.S., almost all states have adopted a version of the Uniform Trade Secrets Act (UTSA). Some states have additional trade secret laws beyond UTSA. There is also a relatively new federal Defend Trade Secrets Act of 20163 that provides right to sue in Federal Court4, which is particularly useful where the misappropriation cuts across state lines. 

In Europe, a Trade Secrets Directive5 required European states to set minimum EP standards for protection of trade secrets. For example, it provided a basic definition of "trade secret" and certain remedies must be made available. 

Canada's Next Steps

Canada should create a federal trade secret statute. Canada will implement at least certain basic legislation if the US-Canada-Mexico free trade agreement is implemented. However, there is no guarantee that it will be implemented. The US House of Representatives appears to be sitting on the legislation, and has not called a vote. The Trans-Pacific Partnership also requires certain basic trade secret protections. 

In the meantime, there is no reason why every province could not pass trade secret legislation (ideally uniform legislation). The Alberta Law Reform institute called for legislation in Alberta over three decades ago, and provided recommendations for draft legislation6. The Uniform Law Conference of Canada followed up a few years later with its own version of a Uniform Trade Secrets Act. Many provinces are trying to encourage start-up companies and technology transfer from universities. New companies are quite vulnerable, so trade secret legislation would be a good element to support a start-up ecosystem.


1 Cadbury Schweppes Inc. v FBI Foods Ltd. (1999), 83 CPR (3d) 289 (SCC).

2 CPC International Inc. v. Seaforth Creamery Inc. (1996), CanLII 8188 (ON SC).

3 18 U.S.C. § 1836.

4 Prior federal laws continue, eg Electronic Espionage Act.

5 Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.

6 Trade Secrets, 1986 CanLIIDocs 20.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions