What happens when a seasoned professional with specialized knowledge and expertise is engaged by competing firms to do similar work, or moves to a competing firm? Absent a nondisclosure agreement defining what information is subject to confidentiality obligations, are there any restrictions on what information professionals can or cannot use in their later work? The answer depends, in part, on whether the information is “confidential information” or professional “know-how.”

Professionals are entitled to use general knowledge and skill, or know-how, acquired through the course of their professional experience. However, the difference between know-how and confidential information can be difficult to ascertain, particularly in situations involving former consultants or professionals who go on to perform services on similar projects for different clients. Given the tension between confidential information, which is subject to non-disclosure obligations, and know-how, which is not, in this Dentons Insight, we review recent case law in this area and offer guidance on making this critical distinction when assessing whether a valid claim for breach of confidence exists.

Confidential information is information that has the “necessary quality of confidence,” which broadly means that the information: (i) is not common knowledge or otherwise publicly available; and (ii) its owner has treated it as confidential. More specifically, it “must be inaccessible, have a quality of originality or uniqueness, and must not be in the nature of know-how.”¹ Importantly, to “have the necessary quality of confidence, the information must not be of a general nature but must be specific.”²

Know-how, on the other hand, derives from “a professional’s experience, knowledge, practice or skill; or is commonly known within an industry.”³ While the assessment of whether certain information qualifies as professional know-how is context specific, it generally includes “information taken away in the [professional’s] head, particularly where such information relates to the skills used by the [professional] in his or her day-to-day activities.”⁴ Examples of know-how may include general business methods (as opposed to information related to a particular negotiation or transaction) ⁵ and standard architectural or engineering practices.

In Dymon Storage Corporation v. Nicholas Caragianis (Dymon Storage), Dentons represents two architecture firms and several of their employees (the Architects) in an ongoing breach of confidence action commenced by Dymon Storage Corporation (Dymon). For many years before the litigation, the Architects performed architectural design services for Dymon in relation to its self-storage buildings across Ontario. Dymon terminated that engagement, however, upon learning that the Architects and one of Dymon’s employees had gone to work for a Dymon competitor. Soon after commencing the action, Dymon brought a motion for an interim injunction seeking an order prohibiting the Architects from performing architectural services for any Dymon competitor.

On the injunction motion, Dymon alleged that the Architects misused its confidential information when working for its competitor, SmartStop Storage. Dymon argued that its “design” and specifically the “why” behind its design (i.e., the reason for certain design features) was confidential and proprietary to Dymon. The Court found this argument unpersuasive, ultimately concluding that in the circumstances, the “why” behind Dymon’s design was indistinguishable from the general know-how the Architects obtained by virtue of the relationship.⁶ Justice Koehnen further reasoned that if knowledge about the “why” behind a design could justify an injunction, it would be too easy for employers to restrain former employees or service providers on the basis that they knew why things were done a certain way.⁷

In dismissing the motion,⁸ the Court further emphasized that Dymon failed “to identify with the required level of precision what information is confidential and why it is confidential.”⁹ Indeed, confidential information must be identified with “reasonable specificity”—general categories or types of information will not suffice.¹⁰

Importantly, Justice Koehnen provided a helpful summary of the distinction between confidential information and professional know-how, as follows:

A competing principle to confidentiality is that of general know-how. Where information derives from a professional’s experience, knowledge, practice, or skill; or is commonly known within an industry, it is not confidential to another party. Put differently, information is not confidential when it derives from a professional’s techniques that are known in the field and could easily be duplicated by one with rudimentary skills in the trade.¹¹

The Court followed this reasoning in Skycope Technologies Inc. v Jia (Skycope) in dismissing Skycope’s claim for misuse of general information about wireless anti-drone technology. Skycope alleged that its former employees had no knowledge in this subject area prior to their employment, and thus, that this information was confidential. The Court disagreed, concluding that this information was, in fact, professional know-how, and further, that  “[k]now-how about “wireless anti-drone technology” in general is too broad a subject to fall within the definition of know-how for the purposes of breach of a confidentiality claim.”¹² The Court did, however, leave open the possibility of finding that specific, development-related know-how could qualify as confidential information if the evidence identified calculations, simulations or experimentation used to developed Skycope technology.¹³

Despite the Court’s findings in Dymon and Skycope, the distinction between confidential information and know-how remains a context driven assessment. In dB Noise Reduction Inc. v. Letkemann et al.,,for example, the Court of Queen’s Bench of Manitoba (as it then was) concluded that “solutions and quoting are relatively standard among the [acoustics] industry and between clients” and therefore could not amount to confidential information.¹⁴ The Court further found that the former employee did not breach any confidentiality obligations when he left the business with “knowledge of many of the customers who did business with [his former employer]”—this information formed part of his know-how in the circumstances.¹⁵

Given recent case law in this area, companies seeking to assess whether information is confidential, or rather, professional know-how, should consider whether the information is:

• Unique and identifiable with reasonable specificity?
• Publicly available or commonly known within the relevant industry?
• Derived from a professional’s experience, knowledge, practice or skill?

Generally speaking, where the answers to questions “2” and “3” above are “yes,” the information is more likely to fall within the category of professional know-how as opposed to confidential information. That said, the circumstances in any given case can make this determination challenging. The solution for most companies therefore boils down to taking reasonable efforts to identify and protect confidential information by way of a written confidentiality agreement.

The distinction between confidential information, which is protected, and know-how, which is not, is relevant in situations beyond those canvassed above. It regularly arises, for example, when companies provide information to the government (e.g., in a procurement process), and that information later becomes subject to access to information requests.

Dentons stands at the ready to deliver specialized advice for companies seeking certainty on what information amounts to professional know-how in their industry, as well as approaches they can deploy in protecting information that is, in fact, confidential.

For more information on this topic, please contact the authors, David Elliott, Emily McMurtry and Rachel Kuchma.

1. Skycope Technologies Inc. v Jia, 2023 BCSC 1288 at para 118 (Skycope).↩
2. Dymon Storage Corporation v Nicholas Caragianis, 2022 ONSC 5883 at para 49 (Dymon Storage).↩
3. Dymon Storage at para 54.↩
4. Julie A. Thorburn & Keith G. Fairbairn, Law of Confidential Business Information (Toronto: Thomson Reuters Canada Limited, 1998) (loose-leaf updated 2022), § 4:10. ↩
5. dB Noise Reduction Inc. v Letkemann et al., 2022 MBKB 208 at para 76 (dB Noise). ↩
6. Dymon Storage at para 60. ↩
7. Dymon Storage at para 59. ↩
8. While the Court dismissed Dymon’s motion for an order preventing the Architects from competing with Dymon, it ordered the Architects to return certain documents to Dymon. ↩
9. Dymon Storage at para 5. ↩
10. Dymon Storage at para 55. ↩
11. Dymon Storage at para 54.↩
12. Skycope at para 133. ↩
13. The Court found, however, that Skycope source code and specific market research qualified as confidential information. ↩
14. dB Noise at para 76. ↩
15. dB Noise  at para 79. ↩