How do I protect trade secrets in Canada?

For many software and AI startups, the most valuable assets aren’t registrable at all: model weights, training data pipelines, prompts, pricing logic, customer lists and know-how. Those are protected as trade secrets, if you treat them like secrets.

What counts as a trade secret?

Section 391 of the Criminal Code defines a trade secret as information that isn’t generally known in the trade or business that uses it, has economic value from not being generally known, and is the subject of efforts that are reasonable in the circumstances to keep it secret. Civil courts use similar ideas when deciding whether information is confidential.

Which laws protect it?

Protection	What it covers
Contract	NDAs, employment and contractor agreements, and customer terms that restrict use and disclosure
Breach of confidence	A common law claim where confidential information was shared in confidence and misused; the Supreme Court of Canada set out the test in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574
Criminal Code, s. 391	Offences for knowingly obtaining or communicating a trade secret by deceit, falsehood or other fraudulent means, and for knowingly receiving one obtained that way; independent development and reverse engineering are expressly not offences
Copyright	Protects code and documents as expression, alongside secrecy

What are reasonable efforts at a startup?

• Access controls: least-privilege access to repositories, model weights, data and admin tools; remove access promptly when people leave.
• Contracts: confidentiality and IP assignment terms for every employee and contractor, and NDAs before sharing secrets with partners. See is an NDA enforceable.
• Labelling: mark key documents confidential, and keep a short list of what the company treats as its trade secrets.
• Customer terms: prohibit reverse engineering, scraping and model extraction in your SaaS agreement and AI product terms.
• AI tools: control what staff paste into third-party tools. See does my startup need an AI use policy.
• Exit process: remind departing staff of their obligations and confirm return of company information.

Can I stop an employee from joining a competitor?

Generally not with a non-compete. Ontario’s Employment Standards Act has prohibited most employee non-compete agreements since October 25, 2021, with narrow exceptions. Confidentiality obligations and non-solicitation clauses are still available. See Ontario’s non-compete ban and the glossary entry on non-solicits.

Trade secret or patent?

A patent gives exclusive rights for a limited time but requires public disclosure. A trade secret can last indefinitely, but gives no protection against independent development or reverse engineering. Many software companies rely mainly on trade secrets and copyright. If an invention might be patentable, get advice from a registered patent agent before disclosing it publicly: under section 28.2 of the Patent Act, your own public disclosure more than a year before you file counts against the application.

What to do next

We prepare NDAs, employment agreements and contractor agreements with confidentiality and IP terms, at fixed fees on our fees page. See also does my company own what its employees create.

This guide is general information about Ontario and Canadian law, not legal advice for your situation. If you think confidential information has been taken, book a free 15-minute consult.