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T-2244-73
Consolidated Textiles Limited (Plaintiff) v.
Central Dynamics Limited, Bruck Mills Ltd., Sidney Bornstein and J. René Cornellier (Defendants)
Trial Division, Addy J.—Montreal, May 6-10, 13 and 14; Ottawa, December 18, 1974.
Constitutional law—Trade and commerce—Jurisdiction— Trade secrets—Confidential information—Company de veloping new type of loom—Making of vital parts by second company—Confidence violated by employee of second com- pany—Trade Marks Act, R.S.C. 1970, c. T-10, ss. 7, 55— Federal Court Act, ss. 26, 64(2)—B.N.A. Act, s. 92(13).
The plaintiff company, a textile manufacturer on a large scale, was alone in successfully developing a commercially viable conversion kit or system for converting fly-shuttle looms to water-jet looms. The company entrusted to the defendant, Central Dynamics Limited, the instructions and materials necessary for a contract with Central Dynamics for producing parts of the conversion assembly. Subse quently, the plaintiff sought an injunction restraining the use of trade secrets and confidential information gained by the defendants. Of the latter, Central Dynamics Limited and two competitors of the plaintiff (Bruck Mills Limited and Sidney Bornstein) consented to the issue of restraining orders against them. The trial proceeded against the defend ant Cornellier, the key man in charge of the operation at Central Dynamics.
Held, granting an injunction against the defendant, the action of the plaintiff was based on section 7(e) of the Trade Marks Act, proscribing acts "or other business practices contrary to honest industrial or commercial usage in Cana- da". This provision was validly enacted by Parliament and lay within the jurisdiction of the Federal Court. It was applicable to a man in the position of the defendant. Until he was approached by the plaintiff, this defendant had no knowledge of looms and had never been connected with the textile industry. He was repeatedly advised of the fact that the plaintiff considered the whole project confidential. A person who had received information in confidence pertain ing to a trade secret could not use it to the prejudice of the person who gave it to him. The evidence showed that the defendant was attempting to use the photographs, drawings and specific detailed knowledge, which he had acquired from the plaintiff, to the benefit of the plaintiff's competi tors. Apart from this, where confidential drawings were used for an unauthorized purpose, there was established a prima facie case of misuse of confidential information. The defendant had completely failed to rebut this prima facie case.
MacDonald v. Vapor Canada Ltd. [1972] F.C. 1156, followed. Suhner & Co. A.G. v. Transradio Ltd. [1967] R.P.C. 329; International Tools Ltd. v. Kollar [1968] 1 O.R. 669; Allen Manufacturing Co. v. Murphy (1911) 23 O.L.R. 467; Maguire v. Northland Drug Co. Ltd. [1935] S.C.R. 412, and Saltman Engineering Coy. Ld. v. Campbell Engineering Coy., Ld. (1948) 65 R.P.C. 203, referred to.
ACTION. COUNSEL:
M. G. Freiheit and P. R. O'Brien for plaintiff.
A. L. Stein, Q.C., and N. Stein for defend ant Cornellier.
SOLICITORS:
Stikeman, Elliott, Tamaki, Mercier & Robb, Montreal, for plaintiff.
Stein & Stein, Montreal, for defendant Cornellier.
The following are the reasons for judgment delivered in English by
ADDY J.: This is an action concerning an alleged violation of trade secrets and breach of confidential information imparted by the plain tiff to the defendants and for conspiracy relat ing thereto.
The plaintiff is claiming an injunction restraining the use of any such confidential information gained by the defendants and enjoining them to deliver up all documents, plans and other relevant written matter and also to divulge the names of all parties to which any such information has been communicated.
At the opening of trial, minutes of settlement were filed and motions were made for judgment pursuant thereto settling the claims against all of the defendants except the defendant J. René Cornellier (hereinafter referred to as "Cornel- lier"). The motions for judgment were granted and the trial proceeded against the last-men tioned defendant.
The plaintiff company, originally established in the United States in 1905, has been in Canada since 1930 and operates a very large textile manufacturing business. In its business and in its various mills it operates some 800 looms. For many centuries and until a very few years ago, all looms operated on the principle of a shuttle which carried the weft yarn across the warp. The weft yarn consists of a continuous thread which the fly shuttle lays over and through the vertical threads forming the warp. In the mid-1960's, three firms in the world commenced experimenting with and manufac turing, at least experimentally, certain water-jet looms, the basic principle of which consisted of replacing the fly shuttle with a water jet which would propel or shoot individual threads through the warp.
In 1964, the plaintiff company became inter ested in the possibility of using water-jet looms which were being produced, experimentally at that time in Japan by Prince Motor Company. This company was later purchased by Nissan, also of Japan, and I shall hereinafter refer to Prince Motor Company and to Nissan as "Nis- san." The plaintiff company obtained from Nissan the latter's first water-jet loom imported into North America and, as a result, had the first water-jet loom in Canada and the first operating water-jet loom in North America. As a result of its operation of the Nissan water-jet loom, the plaintiff conceived of the possibility of converting standard fly-shuttle looms to water-jet looms by using some of the parts of the Nissan water-jet looms and also improvising other brackets, etc., required for the conversion.
The plaintiff company was in an uniquely favourable position in so far as its technical weaving staff and research personnel were con cerned, in that it had been using some water-jet looms for considerable time, both in Canada and in the United States, at the time when it began experimenting on conversion of fly-shuttle looms; it had been operating a school for train ing employees in the operation of water-jet looms; it had also engaged in furthering an operation in the United States to weave fabric for the manufacturing of sandbags and, finally,
it had obtained the exclusive service contract for all Nissan water-jet looms in North Ameri- ca. It enjoyed this latter right until May 1971.
The first Nissan loom arrived in 1965 when water-jet looms first made their appearance on the market. About that time also, water-jet looms were first being manufactured experi mentally in Europe by a Czechoslovakian company.
The total parts employed in the conversion kit of the plaintiff amounted to approximately one hundred parts including a total of approximately twenty Nissan water-jet loom parts.
Although conversion had probably been thought of as a possibility, all evidence points clearly to the fact that, until the plaintiff had commenced developing its own version of a converted water-jet loom in 1971 and also until it had reached the final stages of developing a production loom, which could operate commer cially, no other loom-manufacturing company and no other member of the textile industry had done anything or attempted to do anything to overcome the numerous technical difficulties involved in turning out an operational converted loom. The evidence also points clearly to the fact that the idea itself was not at that time believed to be practically feasible. Certainly, no other textile manufacturer in North America, and most probably none elsewhere, had taken effective steps to convert standard fly-shuttle looms to water-jet looms.
I was most impressed by the evidence of one Maurice Rabinovitch, who had been employed by the plaintiff until September 1972 as the head of its research and development branch.
It appears that even at the present time, no other company has successfully developed a commercially viable conversion kit or system for converting fly-shuttle to water-jet looms. The plaintiff first started its original develop ment lated in the year 1969. In nine weeks it had succeeded in developing a machine that
could weave but it took some eighteen months more of experimenting to develop a machine effective enough to weave on a commercial basis.
The defendant Cornellier, as the key man in charge of the Aero-space Division of the defendant Central Dynamics Limited, was in charge of its department which manufactured component parts for various types of ma chinery. He was in this capacity responsible for quoting on the manufacturing of certain vital parts and was required to produce other parts of the conversion assembly and, for such purpose, received from the plaintiff parts of the water-jet assembly of Nissan and other hand-built brack ets and parts, as well as pictures of same, and was provided with photographs of certain com ponents and parts and was advised of their intended purpose. He was also provided with brochures on water-jet looms and was shown looms in the plaintiff's mills, which looms were the subject of experiments and trials, in an attempt to attain a commercially viable convert ed loom.
Cornellier objected to the jurisdiction of this Court on the grounds that the matter was prop erly one of property and civil rights, and exclu sively within the jurisdiction of the provinces from a legislative standpoint and of the provin cial courts from a judicial standpoint.
Although not specifically pleaded in the state ment of claim the plaintiff insists that the action was instituted pursuant to section 7(e) of the Trade Marks Act' which reads as follows:
7. No person shall
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada.
' R.S.C. 1970, c. T-10.
Altogether apart from the question that it is not, generally speaking, necessary to plead law, counsel for the defendant Cornellier was, at all relevant times, aware that the action was instituted on the basis of that subsection, exten sive argument was addressed to the Court con cerning its validity and its application to the present case and no specific objection was taken to the fact that it was not pleaded. Had any such objection been taken, I would forth with have ordered the claim amended had I deemed it necessary.
The question of the right of Parliament to legislate in this area and also the question of whether jurisdiction over the matter has actual ly been granted to the Federal Court of Canada, were both decided by the Appeal Division of this Court in the recent case of MacDonald v. Vapor Canada 2 .
Jackett C.J. in delivering the unanimous deci sion of that Court, after an extensive review of the authorities, dealt with the first question, that is, the right of Parliament to enact the section at page 1171 of the above report as follows:
Against the background of these authorities, my conclu sion is that a law laying down a set of general rules as to the conduct of business men in their competitive activities in Canada is a law enacting "regulations of trade as a whole or regulations of general trade and commerce within the sense of the judgment in Parsons case". From this point of view, I can see no difference between the regulation of commodity standards and a law regulating standards of business con duct; and, in my view, if there is anything that can be general regulation of trade as a whole it must include a law of general application that regulates either commodity stand ards or standards of business conduct.
It appears to me that section 7(e) merely prohibits in a very general manner any improper business conduct and that neither there nor in any other part of the Act is any attempt made to define any standard of business conduct or to "[lay] down a set of general rules as to the conduct of business men" or to regulate any specifically defined conduct, except of course conduct and acts which are specifically prohib-
2 [1972] F.C. 1156.
ited by other provisions of the Act and which are specifically defined therein. In other words, the subsection would appear to me to be merely prohibitory in a very general way, without being supported either in the subsection itself or in any other part of the Act, by any regulatory provisions. However, there is no doubt that the Court of Appeal has found that it does regulate trade and commerce and is constitutional on those grounds. I am, of course, bound thereby.
As to the second question, that is, whether actual jurisdiction to determine the question has been granted to the Federal Court of Canada, the learned Chief Justice has this to say at page 1160 of the above report:
The Trial Division has jurisdiction to entertain an action for breach of section 7 by virtue of section 55 of the Trade Marks Act as amended by section 64(2) of the Federal Court Act, read with section 26(1) of the latter Act. Those provi sions read as follows:
55. The Federal Court of Canada has jurisdiction to entertain any action or proceeding for the enforcement of any of the provisions of this Act or of any right or remedy conferred or defined thereby.
26. (1) The Trial Division has original jurisdiction in respect of any matter, not allocated specifically to the Court of Appeal, in respect of which jurisdiction has been conferred by any Act of the Parliament of Canada on the Federal Court, whether referred to by its new name or its former name.
This decision was arrived at notwithstanding the fact that the case clearly and unequivocally dealt with a wrong which altogether apart from any statutory enactment has been recognized for many years as actionable at law, both civil and common, with legal and equitable remedies which could and apparently still can be enforced by action taken before provincial courts. This is all the more evident because in the case itself the fact that a course of conduct was also actionable at common law was used as a test to determine whether that course of conduct con stituted a breach of "honest industrial or com mercial usage in Canada" as mentioned in sec tion 7(e) of the Trade Marks Act. On this subject, the learned Chief Justice stated at page 1161 of the report as follows:
It has been common ground on this appeal that a business man, in Quebec as well as in the common law provinces, is, quite apart from statute, liable to damages and an injuction if he embarks on a course of using in his business informa tion that has been obtained for him from a competitor by an employee of that competitor in contravention of the employee's contract of employment with that competitor. (See authorities cited in Chapter XIII of Fox, The Canadian Law of Trade Marks and Unfair Competition, 3rd edition, at pages 652 et seq.) That being so, in my view it must be "contrary to honest industrial or commercial usage in Cana- da", in the absence of evidence to the contrary, to use information so obtained in that way and it is, therefore, contrary to section 7(e) of the Trade Marks Act to do so.
The above statements of the law constitute essential and integral parts of the ratio decidendi of the Court of Appeal in the Vapor Canada case (supra) and are therefore clearly binding upon me. The case is presently under appeal before the Supreme Court of Canada and, because of this fact and by reason also of the extent to which the decision recognizes a feder al jurisdiction over matters formerly dealt with exclusively by provincial courts and which, until the federal enactment, were apparently con sidered to be within the exclusive jurisdiction of the provinces under section 92(13), I was inclined to defer my decision until the matter had been conclusively settled by that Court. However, since it will apparently be several months before the appeal is heard and, in view of the fact that the plaintiff is seeking an injunc tion and was unsuccessful in an attempt to obtain an interlocutory injunction, I concluded that the parties to this action should not be delayed further before receiving a decision in the case at bar.
The only possible factual distinctions between the Vapor Canada case (supra) and the case before me are the following:
1. The person whose actions led to the litiga tion in the former case had obtained his infor mation as an actual employee of the plaintiff while, in the present case, it is alleged that he obtained it as an independent contractor doing confidential work. I can see no grounds for distinguishing the two cases and of hold ing that, although section 7(e) applied to the
former situation, it would not apply to the present case;
2. In the Vapor Canada case, the company set up by the person who obtained the infor mation was a direct competitor of the plaintiff on the market while, in the case before me, the defendant Cornellier is not a direct com petitor but intends to use the information to favour direct competitors of the plaintiff, some of whom were also originally sued as parties to the action but who, by reason of the settlement of the claim against them, as above stated, are no longer parties to the action. The plaintiff alleges conspiracy between the defendant Cornellier and two of the other defendants who are actual competitors. They, in the settlement, consented to restraining orders being issued against them.
This would appear to link the defendant Cor- nellier irrevocably with those defendants should I find that he did contravene section 7(e). How ever, in any event, I cannot subscribe to the argument that section 7(e) is to be limited to cases where the defendant is an actual business competitor of the plaintiff. There is nothing in the wording of that subsection which might imply that the existence of a competitor is required, nor can the ejusdem generis rule be applied to the words "do any other act or adopt any other business practice ... " in paragraph 7(e), since the paragraphs preceding it are not confined to cases where competitors are involved. (For the full text of section 7 refer note infra*.)
*7. No person shall
(a) make a false or misleading statement tending to dis credit the business, wares or services of a competitor;
(b) direct public attention to his wares, services or busi ness in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another;
The only paragraphs of section 7 which specifically provide for or necessarily imply the existence of a competitor are paragraphs (a) and (b). In paragraphs (c) and (d) the existence of a competitor cannot, by any stretch of the imagi nation, be considered as a necessary subject or object of the acts or omissions mentioned therein.
I am cognizant of the fact that in a footnote to the Vapor Canada case (supra) the learned Chief Justice at note 7 on page 1175 of the report stated as follows:
If, therefore, an employee divulged confidential information to a competitor of his employer but took no part in the competitor's business operations, section 7(e) could not, as I see it, be invoked by the employer against such employee. Section 7(e), like the rest of section 7, is restricted to acts of unfair competition and does not govern employer-employee relations.
This statement was, of course, not part of the ratio decidendi of the case and, as above stated, section 7 cannot be held to be limited to cases where a competitor is involved. Furthermore, in the present case, the defendant Cornellier was never an employee of the plaintiff but on the contrary was always an independent contractor, although not a competitor.
Since there can be no logical distinction on the facts between the Vapor Canada case and the case before me, which would have a bearing on the question of jurisdiction, I must conclude
(c) pass off other wares or services as and for those ordered or requested;
(d) make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to
(i) the character, quality, quantity or composition,
(ii) the geographical origin, or
(iii) the mode of the manufacture, production or performance
of such wares or services; or
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada.
that I am bound by that case and I, therefore, hold that I do indeed have jurisdiction.
I will now deal with the merits of the case on the basis of the findings of fact already made and of those to which I will hereinafter refer.
The law is settled that where no patent rights have been acquired, although a plaintiff might have no title to protect as against the world, he may have a good title to protect against a par ticular defendant on the principle of unjust enrichment. See Ackermans v. General Motors Corporation 3 ; Fox, Canadian Law of. Trade Marks 4 ; and Morison v. Moats.
However, the general rule is that it is in the public interest to allow freedom of trade and to protect the individual's right to practice his profession or trade in a free and unhindered fashion. See Trego v. Hunt'. Unless there is an overriding reason justifying it, such as the pro tection of an interest in specific trade secrets, even where there is a contract any covenant express or implied in restraint of trade will be considered null and void and unenforceable as being against public policy. Any such covenant if wider than required for the protection of the former employer or client will be unenforceable. A duty to refrain from using or divulging trade secrets does not prevent a person from using general skill and knowledge acquired whilst in the employ of another. Both he and the general public are entitled to the benefit of this acquired general skill and knowledge. Objective knowl edge such as trade secrets and the names of customers are to be distinguished from subjec tive or general knowledge, such as the method of organizing a business, or of doing business of managing a plant, or of carrying out a process or procedure generally known to persons in the trade or occupation or readily ascertainable by
(1952) 95 USPQ 214.
4 2nd Ed. (1956) Vol. II, 944.
s (1851) 9 Hare 241 at 258; 20 L.J. Ch. 513, affirmed 21
L.J. Ch. 248.
a [1896] A.C. 7 at 24.
them. See Herbert Morris Limited v. Saxelby'; R. L. Crain Ltd. v. Ashton$; Attwood v. Lamont 9 ; United Indigo Chemical Company Limited v. Robinson 10 ; Bowler v. Lovegrove"; Lange Canadian Inc. v. Platt 12 ; and Sir W. C. Leng & Co., Limited v. Andrews 13
Finally, where a person has, by fair means and without being in breach of any duty to the owner, become acquainted with an unpatented trade secret, he may use the knowledge for himself and also manufacture and sell the results of same. See Morison v. Moat 14 ; Progress Laundry Co. v. Hamilton 1 s; and Her- bert Morris Limited v. Saxelby (supra).
Notwithstanding the defendant Cornellier's evidence to the contrary, I find that he was repeatedly advised of the fact that the plaintiff considered the whole project, including the very concept of replacing a fly shuttle by a water-jet attachment, as being confidential, he was also advised of the fact that one of the main reasons was to gain and maintain as long as possible a competitive production advantage over the other textile manufacturers. The defendant Cor- nellier himself in fact advised the witness Rabinovitch that he was aware of the confiden tiality of the information which was being and had been imparted to him.
A person who has received information in confidence pertaining to a trade secret shall not
' [1916] 1 A.C. 688 at 699,702 to 705 and 714.
s (1949) 9 C.P.R. 143, affirmed (1950) 11 C.P.R. 53.
9 [1920] 3 K.B. 571.
10 (1932) 49 R.P.C. 178 at 187.
11 [1921] 1 Ch. 642 at 650.
12 (1972) 9 C.P.R. (2d) 231, reversed [1973] C.A. 1068.
1 3 [1909] 1 Ch. 763 at 773.
14 20 L.J. Ch. 513; affirmed in 21 L.J. Ch. 248.
15 (1925) 270 S.W. 834.
take advantage of it and use it to the prejudice of the person who gave it to him in confidence.
The protection afforded by this principle does not depend on any contract, express or implied, but on a broad principle of equity which pre vents a person from making improper use with impunity of such information so acquired by him. See Fox, Canadian Law of Trade Marks (supra); Seager v. Copydex Limited 16 ; Saltman Engineering Coy. Ld. v. Campbell Engineering Coy., Ld. 17 ; Printers & Finishers Ltd. v. Holloway 18 ; and Breeze Corporations v. Hamil- ton Clamp & Stampings Ltd. 19 . The duty to respect that confidence persists after the rela tionship which created it has terminated. See Terrapin Limited v. Builders' Supply Company (Hayes) Limited 20 ; Peter Pan Manufacturing Corporation v. Corsets Silhouette Limited 21 ; Seager v. Copydex Limited (supra); Reid and Sigrist Ltd. v. Moss & Mechanism Ld. 22 ; and Brian D. Collins (Engineers) Limited v. Charles Roberts & Company Limited 23 .
The onus rests on plaintiff to establish the confidential nature of the information and the fact that the products sold (or intended to be sold) are the same. See Gibbons v. Drew Chemi cal Ltd. 24 and Robin-Nodwell Mfg. Ltd. v. Fore most Developments Limited 25 . This onus includes that of establishing that devices or improvements were not known to the trade gen erally. See R.L. Crain Ltd. v. Ashton 26 .
Where there is some doubt as to whether information is in fact confidential the plaintiff is
16 [1967] R.P.C. 349 at 368.
17 (1948) 65 R.P.C. 203 at 213.
18 [1965] R.P.C. 239 at 255-6.
19 [1962] O.R. 29; 30 D.L.R. (2d) 685.
20 [1967] R.P.C. 375.
21 [1963] R.P.C. 45 at 55.
22 (1932) 49 R.P.C. 461.
23 [1965] R.P.C. 429.
24 (1972) 8 C.P.R. (2d) 105.
25 (1968) 52 C.P.R. 244.
26 (1950) 11 C.P.R. 53 at 62.
obviously in a better position when the defend ant had been advised that it was confidential. See United Indigo Chemical Company Limited v. Robinson 27 and International Tools Ltd. v. Kollar 28 .
In the present case, one must therefore determine:
(a) Whether the subject-matter of the alleged secret is objective or specific enough, as dis tinguished from purely subjective or general knowledge, to be capable of being afforded protection at law as a trade secret;
(b) Whether the information sought to be pro tected is in fact secret now, or was so at the time Cornellier acquired it, in the sense that it was not generally known to people knowl edgeable in the art at the time;
(c) Whether the keeping of the secret would be of sufficient benefit to the plaintiff to warrant protection being given it, in view of the general principle that every individual should enjoy the freedom of practising his trade or profession in a free and unhindered fashion; and finally,
(d) Whether the person whom the plaintiff is seeking to restrain from using the knowledge, acquired it by fair means or whether, on the contrary, he acquired it confidentially and would be under a duty not to divulge it by reason of the relationship which existed at the time between himself and the plaintiff.
The evidence adduced in this case was voluminous and, to a considerable extent, repetitious. In addition to the testimony at the trial, the lengthy examinations for discovery
27 (1932) 49 R.P.C. 178.
28 [1968] 1 O.R. 669; 67 D.L.R. (2d) 386.
were, at the request of counsel for both parties, made part of the record.
The plaintiff has firmly established the fact that it wished to conceal from its competitors in the textile industry for as long as possible not only the method of converting a fly-shuttle loom to a water-jet loom by means of a kit but also, at the outset, the fact that it was experimenting in this area and, later on, the fact that it had succeeded and had some converted looms in actual operation in a mill.
It is clear that the longer these matters could be concealed from its competitors the longer the plaintiff might expect to enjoy the competitive advantage afforded by the increased efficiency of the converted loom over the standard shuttle loom, without having to disburse the very large amount of capital required to re-equip its mills with regular water-jet looms such as those pro duced by Nissan.
I also find as a fact that at the outset, while in the early stages of experimentation, the project was carried out in strict secrecy in a special part of one of the plaintiff's mills where only key personnel engaged in the actual experimentation were allowed. During this stage, personnel on the project, except for senior key personnel, were not told how what they were doing related to the proposed finished project. These first experiments were carried out at the Alexandria mill of the plaintiff in a special room with "No admittance" signs. Visitors had to sign in and staff working on the project were warned that they were not to discuss it with anybody. Later on, when it became necessary to test the ma chinery under normal mill operating conditions, the converted looms were installed in one corner of the plaintiff's Joliette mill. To avoid attaching too_ much importance to the machine by attempting to conceal the machine from the many employees working in the mill, the mill employees were not barred from the area. How ever, the plaintiff changed from an open mill policy where the public, including competitors, were generally admitted, to a closed mill policy
where, except for employees, only persons approved by senior officers and managers of the owner were allowed access.
In the case of limited purchase orders for experimental parts I find that the suppliers and designers were all advised orally of the need for secrecy. Subsequently, when production orders were placed for component parts, the purchase orders were all marked as being confidential.
The plaintiff's invention constituted, and on a balance of probabilities, still constitutes a unique piece of machinery in the industry.
In my view, the fact that the conversion kit contained certain patented parts produced by Nissan and used in their regular water-jet looms is irrelevant. The evidence in any event estab lishes as a fact that the plaintiff had permission from Nissan to use these parts providing the kits were employed solely by the plaintiff in its own mills and not sold or distributed to the public or to other members of the textile indus try. The patented parts formed a very important and essential element of the conversion kit and indeed constituted the very core of the contrap tion, but the method of adapting them to a standard loom to create an efficiently operating production water-jet loom was not known except to the plaintiff.
The line between subjective knowledge, which cannot be the subject-matter of an action and objective knowledge which may, is often difficult to draw. See International Tools Ltd. v. Kollar (supra). However, the specific knowl edge, skill and invention of the plaintiff to which I have referred above is the type of objective knowledge which may constitute a trade secret and is not knowledge of a general or subjective type which cannot be afforded any protection.
The plaintiff was better equipped than any other organization in North America, to carry out the experiments and to succeed in develop ing the water-jet conversion. Cornellier on the other hand, until he was approached by the plaintiff, had no knowledge of looms of any kind and had never been associated with the textile industry. The only knowledge or experi ence he had was obtained as a result of the work which was commissioned of him by the plaintiff .
There is an abundance of evidence to estab lish, and I so find as a fact, that the defendant Cornellier was attempting to use the photo graphs, drawings and specific detailed knowl edge, which he had acquired confidentially from the plaintiff, to the benefit of the plaintiff's competitors and to the consequent detriment of the plaintiff. Altogether apart from this, where confidential drawings are used for a purpose other than that for which they were handed over to the defendant, that is, where they are used by the defendant for manufacturing other drawings or pieces of machinery, which were not author ized, this establishes a prima facie case of misuse of confidential information. See Suhner & Company A. G. v. Transradio Ltd. 29 . The defendant Cornellier has completely failed to rebut this prima facie case.
Where the Court cannot distinguish on the evidence, between what is confidential, and what is not, an injunction will not be granted. See Suhner & Company A. G. v. Transradio Ltd. (supra). In the present case, however, the plaintiff has established positively that all of the information imparted to the defendant Cornel- lier was imparted in strict confidence. I find that Cornellier was clearly advised from the very beginning by one Blueth on behalf of the plain tiff that the project, as well as the details of the conversion kit, had to be kept confidential and must not be divulged. I do not accept the defendant Cornellier's testimony to the contrary nor do I accept his testimony where it conflicts that that of the witnesses Blueth or Rabinovitch.
29 [1967] R.P.C. 329.
The present case is, in my view, one where an injunction can properly be granted pursuant to the principle enunciated in: International Tools Ltd. v. Kollar (supra); Allen Manufacturing Co. v. Murphy 30 ; Maguire v. Northland Drug Com pany Limited 31 ; and Saltman Engineering v. Campbell (supra).
The plaintiff is therefore entitled to a restrain ing order plus costs of the action throughout payable forthwith after taxation.
Judgment will issue accordingly.
J0 (1911) 23 O.L.R. 467 at 473.
3' [1935] 3 D.L.R. 521 at 524; [1935] S.C.R. 412 to 416.
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