Innovation and Commercial Information: A Delicate Balance

Canadian law concerning trade secrets and confidential information fosters innovation by achieving a delicate balance between employer and employee interests. The rich doctrinal landscape allows for a flexible approach to the scope of protection together with a thoughtful analysis of the underlying relational expectations of the parties. The balance of interests achieved fosters innovation by protecting commercial information while concurrently facilitating labour mobility. Criminal legislation, which transfers the cost of prosecution to the state, eliminates some subtleties of case law and threatens severe sanctions, would dampen innovation by upsetting the balance of interests in favour of employer-plaintiffs. This effect has been illustrated by empirical studies of the impact of fluctuating American legal protection of commercial information on employee mobility and innovation. Until such time as there is clear evidence that civil remedies are inadequate to protect the socio-economic order of Canada, the urge to invoke criminal sanctions should be rejected.LL.M