Date : 20000210
Docket : T-1521-99
BETWEEN:
MARK ANTHONY PROPERTIES LTD.,
MARK ANTHONY CELLARS LTD. and
MARK ANTHONY BRANDS LTD.
Plaintiffs
- and -
VICTOR INTERNATIONAL INC.
Defendant
REASONS FOR ORDER
McGILLIS J.
[1] The plaintiffs have brought a motion for the issuance of a confidentiality order in this action for trade-mark infringement and passing off. Counsel for the defendant has objected to the inclusion of paragraphs 9(d) and 11 in the proposed confidentiality order.
[2] Paragraph 9(d) provides as follows:
| 9. Subject to paragraph 10, in the absence of written permission from a Party, Confidential Information shall not be disclosed to anyone except the Court, Court personnel, stenographic and video reporters engaged in the within proceeding and the following firms and individuals: |
...
| d. up to three (3) individuals not employed by any Party nor by any direct competitor of any Party to the within litigation who may be retained by each Party as an outside expert; ... |
[3] With respect to paragraph 9(d), counsel for the defendant submitted, among other things, that there was no basis in law for restricting, at the pleading stage of an action, the number of experts to whom confidential information may be disclosed under the terms of a confidentiality order. She further submitted that the term "direct competitor" was undefined and could potentially require a party to disclose in advance the identity of its expert or face the risk of breaching the confidentiality order. I agree with those submissions. In my opinion, those portions of paragraph 9(d) should be deleted from the confidentiality order.
[4] Counsel for the defendant further submitted that, as a matter of general principle, paragraph 11 of the confidentiality order should be deleted on the basis that it expands without justification the implied undertaking. In response, counsel for the plaintiffs submitted that the provision was "common" and was designed to ensure that the implied undertaking would apply.
[5] Paragraph 11 and its related provisions provide as follows:
| 11. Subject to paragraphs 17 and 18, Designated Confidential Information shall be used solely for the purpose of the within action and may not be used for any purpose whatsoever other than for the purpose of the within action. |
...
| 17. A Party may waive in writing all or any part of his or its right over its Designated Confidential Information under this Order |
| 18. Each Party shall have the right to apply to the Court to modify or vacate the strictures on disclosure imposed by this Order as applied to any specific item or items of Designated Confidential Information, such right to apply to the Court not being negated by any other provision of this Order. |
The term "confidential information" is defined in paragraph 1 as follows:
| 1. "Confidential Information" shall mean and include any documents or thing, including in any examination, or other information provided by or on behalf of any of the Plaintiffs or the Defendant (hereinafter each referred to as a "Party") for the purpose of this proceeding which contains non-public and confidential or proprietary information, whether personal or business-related. |
Paragraph 14 further defines "confidential information" by providing, in part, as follows:
| 14. Confidential Information shall not include: |
...
| b. information derived independently of disclosure hereunder; |
...
| d. information which is or becomes part of the public domain not as a result of any unauthorized act or omission on the part of a recipient of Designated Confidential Information pursuant to this Order. |
...
Paragraph 2 specifies that "designated confidential information" is information designated by counsel as confidential. Paragraph 2 states as follows:
| 2. A Party, when they reasonably believe they will be disclosing or have disclosed Confidential Information shall have the right, through counsel, to designate such information as "Confidential" (hereinafter "Designated Confidential Information"), in which event the Designated Confidential Information "shall thereafter be governed by the terms of this Order", subject to the right of the Defendant to challenge the designation (hereinafter "Challenged Information"). |
[6] In order to determine whether paragraph 11 should be included in the confidentiality order, the nature of the implied undertaking must be considered. In Eli Lilly and Co. v. Interpharm Inc. (1993), 50 C.P.R. (3d) 208 at 213 (F.C.A.), McDonald J.A., writing for the Court, described the implied undertaking in the following terms, at page 213:
| I adopt the reasons of Reed J. in Canada v. Ichi, supra, where at the conclusion of her judgment [at p. 126] she says: |
| The defendant will know from the text of these reasons that an implied undertaking automatically arises so that information obtained on discovery is to be used only for the purposes of the litigation for which it is obtained. This does not, of course, restrict the use of any information which subsequently is made part of the public record. Nor does it affect the use of information which while obtained on discovery may also have been obtained from some other source. An implied undertaking cannot operate to pull under its umbrella documents and information obtained from other sources outside the discovery process merely because they were also obtained on discovery. In addition, the implied undertaking does not prevent a party from applying, in the context of collateral litigation, for release from the implied undertaking, so that information obtained on discovery might be used in that litigation. |
| Aside from this reference, counsel did not refer us to any authorities where an undertaking had been enforced involving information obtained other than by way of discovery. |
| I am of the view that no implied undertaking should attach to materials filed with the court voluntarily by way of affidavits or in statements of fact and law. |
[7] A review of the principles outlined in Eli Lilly and Co. confirms that the implied undertaking arises automatically to protect information disclosed in the discovery process, save and except for two categories of information obtained on discovery: information that becomes part of the public record in the proceeding or information that could also have been obtained from a source other than discovery. The implied undertaking arises whether or not the parties have entered into a confidentiality order. As such, the application of the implied undertaking is not dependent on the existence of a confidentiality order. However, for a myriad of reasons, counsel enter into court sanctioned confidentiality orders, particularly in the early stages of a proceeding, in order to ensure the protection and the confidentiality of information as the litigation unfolds. Such confidentiality orders have a purpose distinct from the implied undertaking. Indeed, proceedings are often settled on the basis of information disclosed between the parties under the terms of a confidentiality order without ever even holding discoveries. In such cases, the implied undertaking may not arise. As a result, a provision such as paragraph 11 of the proposed confidentiality order is necessary to govern the subsequent use that may be made of the confidential information. Accordingly, the inclusion of a provision such as paragraph 11 in a confidentiality order is not objectionable and may indeed be necessary, depending on the manner in which the litigation unfolds, to ensure that the information disclosed under the terms of the order is not used by any party other than for the purposes of the proceeding, subject to the rights accorded to the parties under paragraphs 17 and 18. A provision such as paragraph 11 may also be necessary where, as in the proposed confidentiality order, the term "confidential information"is defined very broadly and may include information beyond that which is disclosed in the discovery process. Paragraph 11 will therefore not be deleted from the proposed confidentiality order.
[8] The plaintiff"s motion for the issuance of a confidentiality order is granted in part. A confidentiality order shall issue in accordance with these Reasons for Order. Given the divided success on the motion, there is no order as to costs.
| D. McGillis |
| Judge |
OTTAWA
February 10, 2000