Law Times

Page 12 September 23, 2013 Law Times • FOCUS Firms reminded to communicate policies on confidentiality Cases show need to be explicit about what counts as proprietary information BY CHARLOTTE SANTRY Law Times T he Coca-Cola Co. has made a virtue of keeping its product's recipe under wraps, going as far as dedicating a section of its eponymous theme park to the "legend of the secret formula." It invites visitors to the World of Coca-Cola in Georgia to not only "visit the home" of the top-secret recipe but also to read all about its mythology and history. There's no doubting the fact that the makers of the fizzy pop view the formula as highly confidential. By contrast, in a Superior Court of Justice decision released last month, a firm failed to show it had treated "proprietary" information as a trade secret. Plaza Consulting Inc. v. Grieve began after Brian Grieve, Thomas Jefferson Downey, and LeRoy Singh left Plaza Consulting Inc., which operates as QA Consultants, to open a new business called Cloudpipe Inc. Both firms offer technology and software consulting services. The plaintiffs claimed the defendants were competing unfairly by "appropriating plaintiffs had "failed to adits confidential information dress in a credible way the key and wrongfully soliciting its first question — i.e. whether clients and employees, conthe information used by the trary to their employment defendants was confidential agreements and in breach or proprietary at all." of their fiduciary duties," the For example, the firm had decision says. claimed Grieve had access to The larger firm asked the a proprietary discovery portcourt to order the defendants folio assessment process for to refrain from the alleged diagnosing clients' technolsolicitations and return any ogy issues. proprietary information in But the plaintiff seemed to their possession. have simply "put an attractive However, the former emlabel on business methods ployees successfully argued Recent cases demonstrate the need to this "supposedly confidential 'drive home the value of IP,' says Allyson that all good consultant firms would pursue," wrote Morgan. information" amounted to "lit- Whyte Nowak. Allyson Whyte Nowak, a tle more than generic marketing and business practices which are common partner at Norton Rose Fulbright Canada LLP, says the case shows that "in order to take out a in their industry," the decision states. They also said they had only approached claim for confidential information, you have to customers of the plaintiff that were already show you've treated it as confidential." Doing so could involve locking it in a filseeking new technology consultants. Any former employees they had spoken ing cabinet; having a "confidential document with had either left Plaza Consulting or had policy" in place; sharing it on a "need-to-know independently applied to jobs with Cloudpipe, basis"; using non-disclosure agreements; or putting in place restrictive covenants. they argued. "Oftentimes, by the time you go to court to Justice Edward Morgan found the With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. MORE DETAIL AND A WIDER SCOPE OF LEGAL CONTACT INFORMATION FOR ONTARIO THAN ANY OTHER SOURCE: • More than 27,000 lawyers • More than 9,000 law firms and corporate offices • Fax and telephone numbers, e-mail addresses, office locations and postal codes INCLUDES LISTS OF: • Federal and provincial judges • Federal courts, including a section for federal government departments, boards and commissions • Ontario courts and services, including a section for provincial government ministries, boards and commissions • The Institute of Law Clerks of Ontario • Small claims courts • Miscellaneous services for lawyers Official marks under review EARLY BIRD ORDERS MUST BE ACCOMPANIED BY CREDIT CARD PAYMENT Continued from page 11 ORDER YOUR COPY TODAY AND ENTER TO WIN AN iPAD MINI** * Offer expires December 15, 2013 • price is based on orders of 100 copies or more **available to new purchasers only EARLY BIRD MULTIPLE COPY DISCOUNTS Perfectbound • December 2013 SPECIAL PRICE $74 (Regular $77) L88804-626 1-9 copies …………………………………………$74 10-49 copies ………………………………………$70.15 50-99 copies ……………………………………$67.84 100 or more copies ………………………$64.76 Multiple copy discounts available Shipping & handling plus applicable taxes are extra Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation Untitled-1 1 www.lawtimesnews.com enforce [confidentiality] . . . it's too late," she says. A separate case from Britain amplifies the need to clearly communicate confidentiality policies. The court released its decision in Whitmar Publications Ltd. v. Gamage & Ors on July 4, 2013. It dealt with the former employees of a publishing company who tried to use the firm's LinkedIn groups and business cards gathered in the course of their employment to help with a new venture. Justice Peter Leaver found there was a "strong case" that the employees had used Whitmar's confidential information. But could it have avoided a lawsuit if Whitmar had realized at an earlier stage that information accessed through the LinkedIn groups was in fact intellectual property? It's possible, according to Whyte Nowak, who says: "It would appear they didn't have any policy or communications on it." Convincing potential clients of the need for intellectual property audits can be a tough sell in a weakened economy, she admits, meaning lawyers need to "drive home the value of IP." It's "frustrating" that companies that think they're only fighting an employment law case often miss the intellectual property elements, she adds. Not all businesses can afford to open a theme park like Coca-Cola to espouse their secretive practices. Likewise, they're not all in a position to tactically outsource work to a variety of producers, which is allegedly how Kentucky Fried Chicken safeguards its secret recipe. But these recent cases demonstrate the need for firms to communicate the level of confidentiality associated with particular types of information to employees in the first instance and, if that fails to act as a deterrent, in the course of any legal action that may arise. LT 13-09-13 10:32 AM willingness to engage as a positive sign as "we should be looking to ensure that people are on a level playing ground" in litigation. The government also said it would review official marks used by public authorities. MacDonald says the government's willingness to address the issue is significant as official marks "create a lot of problems." For example, official marks have an unlimited lifespan whereas normal trademarks last for 15 years. "There's no way of getting rid of dead wood," says MacDonald. "It just sits there forever." He hopes the government will consider ensuring official marks are distinctive before designating them and that they'll have expiration dates. LT

• Cover