“Solicitor’s Eyes Only” Orders in Trademark Litigation: Protecting Sensitive Competitive Information

In an action for trademark infringement an Associate Judge of the Federal Court allowed  the defendant’s request to protect certain confidential information by means of a “solicitor’s eyes only” (“SEO”) designation. The designation would prevent the plaintiff from accessing specified confidential information produced in the litigation. Northern Reflections Ltd. v Artizia Inc. 2026 CanLII 71256

The Facts

The plaintiff alleged that the defendant infringed its registered trademark for EFFORTLESS, used in association with pants and shorts, by selling pants and shorts branded as “EFFORTLESS” or “THE EFFORTLESS PANT”. The parties agreed that a protective order should be issued but disagreed about whether an SEO designation was required for product-level sales and cost data, manufacturing costs, and gross profit margins for 33 of the defendant’s products forming part of its EFFORTLESS product line. The evidence established that this information was highly sensitive, a point confirmed by affiants for both parties on cross-examination.

The plaintiff operates in the same industry and claims to be a competitor of the defendant. The Judge held that, given the sensitivity and granularity of the information sought, this factor, although not determinative, militated in favour of granting the requested SEO order.

The defendant characterized the information at issue as its “special sauce”. It argued that there was a real and substantial threat that an entity claiming to be its competitor could use access to the information to replicate the defendant’s costing and sales structures, causing serious harm to the defendant’s market share and financial position.

The information could also have been useful to members of the plaintiff’s management team seeking access, who might unwittingly or unintentionally misuse it in future business matters. The evidence showed that several relevant members of the plaintiff’s management team held positions with, or provided support to, other women’s fashion brands or companies under the same ownership. This further increased the competitive risk to which the defendant would be exposed if its product-level cost and profit data were disclosed to the plaintiff’s executive team.

To obtain a protective order, the moving party must establish that: (i) the information at issue has been treated as confidential at all relevant times; and (ii) on a balance of probabilities, the requesting party’s proprietary, commercial, or scientific interests could reasonably be harmed by disclosure of the information.

SEO orders are a more restrictive form of protective order and should be granted only in “unusual circumstances”. The party seeking such an order must show that disclosure of the information poses “a serious threat to the interest in question” that is “real, substantial, and grounded in evidence”.

The asserted harm cannot be “merely speculative “and “concrete evidence” is required. The test does not require certainty that the apprehended injury will occur, but the evidence must indicate some likelihood that the harmful event will occur. Bald assertions or a good-faith belief that harm will not occur are sufficiently persuasive to satisfy the test.

The Judge was satisfied that the defendant had protected the confidentiality of the sensitive information at all relevant times through various mechanisms. More importantly, the Judge accepted that, on the evidence, the case involved “unusual circumstances” that justified an SEO order.

The plaintiff argued that an SEO order would limit its ability to provide instructions to counsel, consider settlement options, and consult with counsel in a fully informed manner. Courts have consistently found that this argument has limited merit. Any concern about such an impact is mitigated by mechanisms built into the order, including the ability of counsel to challenge a designation if they consider it necessary to disclose specific documents to their clients.

Comment

This decision appears to correctly apply the existing case law requiring “unusual circumstances” and evidence that disclosure would present a serious threat that is real, substantial, and grounded in the evidence.

A previous decision had ordered that counsel for the moving party could communicate or advise their client of general or high-level conclusions based on a review of the “confidential information” but this was not discussed. This may be something to keep in mind when attempting to negotiate the form of this type of order.

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ.