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w w w . C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 7 59 usually formulas, manufacturing pro- cesses unique to its owner and which have been revealed confidentially to an employee," he wrote. "This is not expe- rience acquired by an employee but, more exactly, knowledge or 'savoir-faire' belonging to the employer and revealed by him for the sole purpose of permit- ting the employee to produce what the trade secret enables him to do. Included in this category are chemical formulas, recipes, manufacturing technologies . . ." Guay made an undertaking on his clients' behalf to respect any trade secrets they had and there had been no non- compete agreement. He calls the case "the perfect case to advance the law," and one that is still cited frequently. Compliance and due diligence Yet departing employees, and the ease with which employees can take material with them when they leave a company — working from home and technology both facilitate that — remain risks, as do mergers and acquisitions. As parties start M&A talks, they nor- mally have a non-disclosure agreement, at which time the buyer undertakes obliga- tions of secrecy to the seller, says Martin Kratz, a partner in Bennett Jones LLP in Calgary. "And when the transaction is concluded, you really need to reverse those positions. Because now the seller should maintain the secrets, and the buyer should be free to be able to use the confi- dential information. "In litigation, we see quite commonly misuse or disclosure of confidential infor- mation in unfair competition cases, typi- cally involving rogue employees," Kratz adds. "That's not at all uncommon. The only thing that's really changed is the instrumentality; it's a lot easier to move trade secrets around in a digital age than it was decades ago." Companies that have good compliance programs generally find this is something that can be managed well, he says. A reputable company will tell a new employ- ee that they don't want any confidential information of former employers. The company will also have a trade secrets protection scheme in place, bolstered when cybesecurity provisions and other industrial security provisions confirm clear obligations in staff. A company's agreements and policies should all enforce these obligations, says Kratz. Employers must educate their staff on their policies, and when an employee leaves for another firm, an exit review is a best practice. This review should look at "all ongoing obligations still owed to employer, even after the termination of employment. A best practice is to identify trade secrets the employee had access to and confirm that the employee is unable to bring that information to a new employer." Reputable employers can be damaged if employees bring confidential informa- tion from another employer. "It can taint their own development efforts . . . and leave them unable to exploit their own research and development" in the event of litigation for trade-secrets violations, Kratz says. "We've seen a number of those kinds of cases." Guay says companies involved in large transactions often don't consider trade secrets; "not at all. Quite often, At DW 2 , we know your clients' success relies on the ingenuity and forward thinking of their people. To protect their brainwork, you can count on DW 2 for the best in intellectual property and technology law counsel. DWW.ca Intellectual Property & Technology Lawyers Patent & Trademark Agents Green works for your gray matter's brilliance. ntitled-3 1 2017-04-13 2:59 PM

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