For years, the Federal Court of Canada (Court) has routinely granted protective orders providing for the handling and protection of documents and information disclosed between the parties during discovery. Recently, the Court has declined to grant such orders, both when sought on consent and when opposed, preferring for parties to rely on common law implied undertakings and contractual arrangements.
Two recent decisions suggest that this view is shifting, and that the Court will be more likely to grant protective orders in the future. dTechs EPM Ltd v British Columbia Hydro & Power Authority, 2019 FC 539 (dTechs) and Paid Search Engine Tools, LLC v Google Canada Corporation, 2019 FC 559 (Google), are patent infringement actions in which the respective defendants successfully moved to obtain protective orders prior to discovery. In granting the orders, the Court critically analysed the recent trend requiring a party seeking a protective order to satisfy the test for a confidentiality order established by the Supreme Court in Sierra Club of Canada v Canada (Minister of Finance), 2002 SCC 41, including Canadian National Railway Company v BNSF Railway Company, 2019 FC 281 (CN), as previously reported by E-TIPS® here.
Both Justice Lafreniere in dTechs and Justice Phelan in Google noted that the Supreme Court appreciated that a different test applied to protective orders, which address the exchange of documents privately between parties, and confidentiality orders, which apply to documents filed with the Court and which engage the public interest in open courts. All that needs to be considered in granting a proactive order is whether (1) there is a similar order in parallel litigation; (2) the requested order allows a party to object to the classification of information; and (3) the requesting party believes that its commercial, business or scientific interests may be seriously harmed by disclosure to the public. This test is typically met in most patent and trade secret cases. Justice Lafreniere went so far as to encourage parties seeking to meet the “low test” for a protective order on consent or unopposed to apply informally to the Court in accordance with the Notice to the Parties and Profession: Informal Requests for Interlocutory Relief.
Given these decisions, protective orders should be easier to obtain soon. However, any remaining uncertainty should be resolved when the Federal Court of Appeal weighs in on the appeal of CN.
Summary By: Matthew Frontini