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Injunction denied for failing to identify misused confidential information

In JTT Electronics Ltd. v. Farmer, the plaintiffs sought interlocutory injunctions to prohibit former employees from using their confidential information. The application was dismissed in its entirety.

Justice Voith held that the analysis set out in RJR-MacDonald Inc v Canada (Attorney General) could not be conducted because of fundamental deficiencies in the record: the plaintiffs failed to identify with a reasonable degree of precision what the confidential information actually was.

The plaintiffs’ materials defined confidential information only in general terms and non-exhaustive categories such as “non-public information concerning the Intellectual Property Rights of JTT, including any ideas, improvements, know how, research, inventions, innovations, products, services, scientific or other formulae…” Justice Voith held that such generic language is insufficient and noted that to the extent that there were some limited descriptions these were “lost in the morass of other generic language.”

The Court observed that the need to identify what is confidential or proprietary serves three functions:

  • First, it enables a defendant to respond to the application and to properly raise concerns as to whether the information in question is, in fact, confidential.
  • Second, it allows a defendant to be put on notice as to what he or she can or cannot do. It is well-established that Courts must avoid vague or ambiguous language which fails to give proper guidance and that the terms of an order must be sufficiently clear and specific to permit the party to know what must be done to comply.
  • Third, enforcement is rendered more difficult or impossible absent reasonable precision or definition to the allow a court to assess any alleged breach.

The application was dismissed because the order sought lacked the clarity and specificity required and it would not enable the defendants to regulate their future conduct. As Justice Voith emphasized, an interlocutory injunction is a “drastic” and “extraordinary” remedy and those who seek one should define the scope of the order sought in sufficient detail.

The application to prohibit the defendants from competing with the plaintiffs suffered a similar fate. The applicable non-compete clause used similarly vague language and, as set out in Elsley v. J.G. Collins Insurance Agencies, [1978] 2 S.C.R. 916, ambiguity in the language of a restrictive covenant renders the provision prima facie unenforceable.

A copy of the Reasons for Judgment of the Supreme Court of British Columbia can be found here.