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Things to know

Trade secrets

  • Trade secrets are a form of intellectual property.
  • A broad range of information can be considered trade secrets, including for example formulas, processes, designs, production methods, customer lists and business plans.
  • Information will only be protected by trade secret if it is confidential (known to relatively few people and not publicly disclosed) and if the holders of the trade secret took reasonable steps to maintain its secrecy.
  • Trade secrets must also have economic value, providing a competitive advantage or having industrial or commercial application.
  • There is no set expiry date for trade secret protection – the information will be protected for as long as it remains a secret.


  • While the U.S. has both federal and state trade secret legislation, Canada does not protect trade secret rights under statute or through any formal registration process.
  • Trade secrets are protected in Canada by contract or by tort where a duty of confidence or fiduciary duty is owed by a recipient to a discloser of confidential business information.
  • Misappropriating confidential information can lead to criminal sanctions for fraud. Additionally, improperly disclosing trade secrets is economic espionage under the federal Security of Information Act if done in connection with a foreign economic entity and if resulting in damage to Canada’s economy, security or international relations.

Things to do

Develop policies and systems to protect trade secrets

  • Keep an updated inventory of your trade secrets and other intellectual property.
  • Store trade secrets securely, locking up tangible information and providing appropriate protection for computer-based systems.
  • Limit access to trade secrets on a “need to know” basis.
  • Require workers to comply with policies governing confidentiality and trade secrets, including at the start of employment and during exit interviews.

Enter into appropriate agreements with employees, contractors and third parties

  • Enter into clear agreements with employees and contractors governing use and ownership of company confidential information.
  • Minimize external disclosure of confidential business information by segregating confidential and non-confidential information, and require third-parties to sign appropriate non-disclosure agreements if confidential information must be shared.
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