In November 2020, a hearing occurred in front of the Quebec Superior Court in connection with a lawsuit filed by Equisoft, a booming software development company based in Montreal, against Protégez-vous, a Quebec magazine dedicated to helping consumers in their purchase choices, for breach of commercial secrets. Protégez-vous was bound by confidentiality and non-reproduction clauses in a NDA and a licence contract. Equisoft’s claim was based on a breach of these contractual obligations.
In application of a cost approach to compensatory damages (an approach adopted in certain cases at common law) and of a specific section of the Civil Code of Quebec dealing with damages in matters of commercial secret (civil law), Equisoft claimed damages equal to the costs of development of the part of the software that was revealed by Protégez-vous in a document circulated to all of Equisoft’s actual and potential competitors in the context of a tendering process. Evidence was tendered demonstrating the measures put in place by Equisoft to protect the secrecy of its software, both internally (vis-à-vis employees, consultants, etc.) and externally (vis-à-vis clients, prospects, commercial partners, etc.).
As there are very few cases applying this section of the Civil Code in Quebec and on commercial secrets more generally, the judgement in this matter will certainly become an important precedent. The facts turned on the analysis of software components, functionalities, look and feel, etc. and may therefore also be relevant to civil litigation involving software.
A Fasken team composed of Julie Desrosiers and Patricia Hénault acted as counsel to Equisoft in connection with this case.