ABQB Holds Publicizing Trade Secrets Constitutes Irreparable Harm

ABQB Holds Publicizing Trade Secrets Constitutes Irreparable Harm

Enviro Trace Ltd v Sheichuk, 2014 ABQB 381

The applicant, a petroleum product tank tester, asked the Court to confirm a previously-granted interim injunction on notice against the defendant former employees enjoining them from using the applicant’s trade secrets and confidential information. The defendants countered that the applicant has not satisfied the three-pronged test for the granting of an interim injunction, and, in particular, that it has not established that it will suffer irreparable harm if the injunction were not granted. [1]

Applicant is granted, and the interim injunction is confirmed as an interlocutory injunction.

The Court held that “[t]he applicant has proved irreparable harm: if a secret is divulged, money cannot make it a secret again.” [5, 35] The Court went on to state that a “true trade secret has a proprietary component; it would be illogical for a court to require proof of irreparable harm when something is stolen from another. The theft speaks for itself.” [30]

The Court also found that the applicant had established “its business reputation, and public safety, might be put at risk by the respondents’ actions” [5], and held that “[l]oss of business reputation is harm which cannot be cured by money: this is an intangible loss which might even affect a business’ ability to continue.” [36]

Regarding customer relationships that may be jeopardized by misuse of trade secrets, the Court noted that “in some situations even the loss of a customer may not be able to be cured by money. Trade attachments of clients are notoriously difficult to evaluate in circumstances, such as these, where the relationship with the client/customer is not as solid as the relationship, for example, between a client and a lawyer or between a patient and a doctor…It is impossible to gauge how maintaining, or losing, one customer might influence former customers and potential new customers.” [37]