Fluid Energy Group Ltd. v. Mud Master Drilling Fluid Services Ltd.

Fluid Energy Group Ltd. v. Mud Master Drilling Fluid Services Ltd.

The Prothonotary erred in law by treating the motion as a Rule 399 variation and by applying a prima facie standard inconsistent with the explicit challenge mechanism in the agreed Protective Order; the correct test requires the designating party to establish on a balance of probabilities that the information is confidential, has been treated as confidential, and that disclosure would reasonably harm proprietary/commercial/scientific interests, after which the challenger bears the burden of proving public domain. Applying that correct test, the Defendants met their burden for both formulation (trade secret) and commercial/financial materials, and the CEO designations were properly...

Citation
2020 FC 229
Parties
Plaintiff/defendant by Counterclaim: Fluid Energy Group Ltd.; Defendant/plaintiff by Counterclaim: Mud Master Drilling Fluid Services Ltd.; Defendant/plaintiff by Counterclaim: Heartland Energy Group Ltd. (Seychelles); Defendant/plaintiff by Counterclaim: Heartland Energy Group Ltd. (Nevada); Defendant/plaintiff by Counterclaim: Alchem Drilling Fluid Service Ltd.
Court
Federal Court
Jurisdiction
Canada
Judgment Date
12 February 2020
Procedural Posture
Patent Infringement; Protective Order Challenge / Appeal From Prothonotary Decision on Motion to Remove Counsel's Eyes Only Designations
Outcome
Appeal allowed in part; Prothonotary order set aside; motion to remove CEO designation dismissed; Defendants awarded a single set of costs.
Legal Topics
Protective Orders, Confidentiality Orders, Counsel's Eyes Only, Implied Undertaking, Federal Courts Rules
Source Language
English
Intellectual Property Civil Procedure Evidence Protective Orders Confidentiality Orders Counsel's Eyes Only Implied Undertaking Federal Courts Rules

Case Brief

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Parties

Fluid Energy Group Ltd.

Plaintiff/defendant by Counterclaim

Mud Master Drilling Fluid Services Ltd.

Defendant/plaintiff by Counterclaim

Heartland Energy Group Ltd. (Seychelles)

Defendant/plaintiff by Counterclaim

Heartland Energy Group Ltd. (Nevada)

Defendant/plaintiff by Counterclaim

Alchem Drilling Fluid Service Ltd.

Defendant/plaintiff by Counterclaim

Procedural Posture

Patent Infringement; Protective Order Challenge / Appeal From Prothonotary Decision on Motion to Remove Counsel's Eyes Only Designations

Legal Issues

  1. 1 Whether the Prothonotary erred in treating the motion as a Rule 399 motion to vary the Protective Order
  2. 2 Whether the Prothonotary applied the correct legal test under the Protective Order when adjudicating CEO designation challenges
  3. 3 Whether, applying the correct test, the CEO designations should be removed from any disputed documents

Ratio Decidendi

The Prothonotary erred in law by treating the motion as a Rule 399 variation and by applying a prima facie standard inconsistent with the explicit challenge mechanism in the agreed Protective Order; the correct test requires the designating party to establish on a balance of probabilities that the information is confidential, has been treated as confidential, and that disclosure would reasonably harm proprietary/commercial/scientific interests, after which the challenger bears the burden of proving public domain. Applying that correct test, the Defendants met their burden for both formulation (trade secret) and commercial/financial materials, and the CEO designations were properly...

Court Disposition

Appeal allowed in part; Prothonotary order set aside; motion to remove CEO designation dismissed; Defendants awarded a single set of costs.

Orders

  • Appeal allowed and the Order of the Prothonotary is set aside
  • The motion to remove the 'Confidential Information – Counsel's Eyes Only' designation placed on documents produced by the Defendants is dismissed