The federal government should protect new technologies and inventions being developed by Canadian companies using trade secrecy methods.Chris Young/The Canadian Press
Matt Malone is an assistant professor at the University of Ottawa Faculty of Law and the director of the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic.
David Durand is a lawyer, co-founder of Minimum Viable Intellectual Property (MVIP) and president of the International Intellectual Property Forum – Quebec (FORPIQ).
Most people seem to recognize that Prime Minister Mark Carney’s trade negotiation team needs the latitude of some secrecy to conduct effective trade negotiations. Laying out the country’s trade playbook and tactics might cost our negotiators a competitive edge.
So, most Canadians are willing to trust a recently elected government to look after the country’s best interests by operating in a zone of confidentiality.
The federal government should extend the same courtesy to innovators and builders working to advance Canada’s economic security and prosperity.
Protecting their nascent technologies and inventions using trade secrecy can help those companies develop technology and scale. This is especially true for smaller companies without the resources to invest in expensive IP protection.
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To give Canadian innovators such advantage, clear federal legal protections for trade secrets would go a long way. Companies relying on trade-secrets law to safeguard their crown jewels could use codified law with clearly defined standards for protection, remedies for misappropriation, and exceptions for good-faith disclosure.
A federal trade-secrets law would harmonize Canadian law by providing a national standard for businesses – moving past the uncertainty that defines things now. It would also let Canadian companies file their claims in the federal courts before judges specialized in IP disputes, consolidating all IP proceedings in one court system, offering the benefit of streamlined procedures, and providing Canada-wide remedies.
This would build on the criminal sanctions that exist in Canada for misappropriating trade secrets that are almost never used by the federal government.
Sadly, we have no Canada Trade Secrets Act to help those folks. Our government’s current approach is to force such commercial actors to navigate a spectrum of unpredictable laws when it comes to trying to capture and protect value. Canada has ignored recommendations to enact laws similar to those that have protected innovators elsewhere, such as in the United States and Europe.
Instead of Canada offering robust protection to trade secrets and confidential information in commercial contexts, we have left provincial courts to adjudicate these matters using fragmented law, which creates uncertainty.
Unsurprisingly, Canadian companies often go abroad to try and defend themselves, as Bombardier did in 2018 and other companies regularly do, too.
Thankfully, we now find ourselves at a unique moment where we might finally be able to change things. Canadians have an appetite that did not exist a few months ago for harmonizing laws, as demonstrated by the push to remove interprovincial trade barriers – and they are willing to gore a few sacred cows to get things done.
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In the past, we let arcane debates about federal-provincial responsibility determine how we legislated in this area. But letting out-of-date thinking set the agenda has inflicted damage, especially in areas like quantum and AI. Trade secrecy is a core pathway in protecting assets like algorithms and data, as the federal government itself recognizes.
Recent geopolitical upheaval has made clear that economic security and technological sovereignty are no longer optional. Without enshrining protection for trade secrets in federal law, Canadian businesses are at a disadvantage in the global innovation economy – and the government’s own gargantuan investments in these areas are undermined.
Ironically, even the Americans want Canada to pass a trade-secrets law, as became clear in recent submissions to the United States Trade Representative. It is difficult to see why we wouldn’t play this card, as a measure that is obviously beneficial to Canadian innovators while placating the Americans eager to trumpet these trade “victories” − a clear win-win.
In comparison with the ill-designed and doomed digital services tax, the adoption of a standardized trade-secrets act would strengthen Canada’s position in a global economy.
Did we mention that passing this law would cost almost nothing? For a government that has sent signals about protecting Canada’s security without answering many questions about where the funding will come from, belt-tightening across the federal government in many departments is widely expected. This makes low-cost or cost-free measures like structural law reform to incentivize innovation clear winners.
Sadly, despite parliamentary committees recognizing the importance of this issue, Parliament itself has ignored repeated recommendations to act.
Canadians may be willing to grant their government some secrecy during the continuing trade negotiations with the Trump administration. Perhaps the government could consider doing the same for the innovators and builders powering the economy to safeguard Canada’s economy in a time when economic strength has never been more important.