CA018889 Vancouver Registry Court of Appeal for British Columbia BETWEEN: CADBURY SCHWEPPES INC. and CADBURY BEVERAGES CANADA INC./BREUVAGES CADBURY CANADA INC. PLAINTIFFS (APPELLANTS) AND: FBI FOODS LTD. - LES ALIMENTS FBI LTEE., FBI BRANDS LTD. - LES MARQUIS FBI LTEE., IRVING GLASSNER, and LAWRENCE KURLENDER DEFENDANTS (RESPONDENTS) AND: ARTHUR FISHER, MYRA FISHER, LAWRENCE KURLENDER, JOANNE FRANKEL, SHELLEY FISHER, LINDA SHAEFER, JEAN-PIERRE RENAUD, ANTHONY TONDINO, JOHN DOE No. 1, JOHN DOE No. 2, and JOHN DOE No. 3 DEFENDANTS AND: IRVING GLASSNER APPELLANT BY CROSS-APPEAL Before: The Honourable Mr. Justice Carrothers The Honourable Madam Justice Newbury The Honourable Madam Justice Proudfoot Jack Giles, Q.C., Counsel for the Plaintiffs (Appellants) and David Woodfield Michael P. Carroll, Q.C., Counsel for the Defendants (Respondents) Peter G. Voith and FBI Foods Ltd., FBI Brands Ltd., and Monika Gehlen Lawrence Kurlender Place and Date of Hearing Vancouver, British Columbia June 18 & 19, 1996 Place and Date of Judgment Vancouver, British Columbia August 15, 1996 Written Reasons by: The Honourable Madam Justice Newbury Concurred in by: The Honourable Mr. Justice Carrothers The Honourable Madam Justice Proudfoot Court of Appeal for British Columbia Cadbury Schweppes Inc. and Cadbury Beverages Canada Inc./Breuvages Cadbury Canada Inc. - v. - FBI Foods Ltd. - Les Aliments FBI Ltee., FBI Brands Ltd. - Les Marques FBI Ltee., Irving Glassner and Lawrence Kurlender - and - Arthur Fisher, Myra Fisher, Lawrence Kurlender, Joanne Frankel, Shelley Fisher, Linda Shaefer, Jean-Pierre Renaud, Anthony Tondino, John Doe No. 1, John Doe No. 2, and John Doe No. 3 - and - Irving Glassner Reasons for Judgment of the Honourable Madam Justice Newbury 1 Although the facts of this case, which required some six weeks of trial, are complex, the main issues raised on appeal can be stated fairly simply: what is the appropriate measure of damages in the particular circumstances of this case for the wrong, generally acknowledged to be sui generis, of breach of confidence; and should such a breach be permanently enjoined when it relates to so- called "springboard" information? 2 In this instance, the breach of confidence consisted of the copying and misuse of the recipe for "Clamato" juice, a beverage consisting of tomato juice, clam broth and other ingredients. This product occupies a dominant place in the tomato cocktail market, in Canada at least. The parties do not contest the trial judge's finding that the recipe was copied by a now- defunct company, Caesar Canning Ltd. ("Caesar Canning") and that it was then made available, in a chain of corporate steps described below, to the defendants FBI Foods Ltd. and its subsidiary, FBI Brands Ltd. The latter company continues to this day to manufacture and sell a product, "Caesar Cocktail," developed using the Clamato recipe, as the trial judge's order implicitly permits. That order fixed the damages payable by the defendants Kurlender, Glassner and FBI Foods Ltd. to the plaintiff Cadbury Schweppes Inc. as the amount "FBI Foods Ltd. and/or Caesar Canning Ltd. would have paid to develop a product to compete in the tomato cocktail market in Canada" ___ later assessed by the Registrar at some $29,700. The Court refused all other claims made by the plaintiffs, including their prayer for a permanent injunction. 3 In this Court, the plaintiffs again seek an injunction and damages measured on a different basis than that adopted by the Court below. Having expressly elected at the start of the trial not to claim an accounting of the profits made by the defendants from sales of Caesar Cocktail, they hope to recover an amount equal to the revenues and royalties they (the respective plaintiffs) would have realized had the defendants' "unauthorized sales" of their product been made by the plaintiff Cadbury Beverages Canada Inc. to the time of trial. They also contest the trial judge's finding that the defendants' conduct benefitted them only to the extent of a 12-month "headstart" in developing a tomato cocktail product similar to Clamato juice and bringing it to market in Canada. Indeed, they say no such finding was expressly made, and if made, that it should not affect the measure of damages to which they are entitled. 4 On cross-appeal, the defendants FBI Foods, FBI Brands and Mr. Kurlender contest the trial judge's finding that an actionable breach of confidence was proven. They say that the terms of the contracts between the parties prohibited them only from marketing a product that combined tomato juice and clams. Caesar Cocktail has no clam component. Therefore, they say, they breached no contractual obligation of confidence, and no other duty of confidence should be implied. These defendants also rely on authorities holding that in certain circumstances, confidential information given to a manufacturer will be regarded as "given for all time". On these bases, they say that the trial judge erred in imposing any liability and that the plaintiffs' claims should be dismissed in their entirety. THE TRIAL JUDGMENT 5 Since the trial judgment has not to my knowledge been published in the law reports, it is necessary to state the facts at some length. In late 1977, Duffy-Mott Company, Inc., which had evidently developed the original Clamato juice recipe, entered into an agreement (the "Licence Agreement") with Caesar Canning under which the latter was licensed and undertook to manufacture and market Clamato juice in parts of Canada. The evidence indicates that similar licensing agreements were regularly entered into by Duffy-Mott worldwide, some with subsidiaries or other non-arms' length companies, and some (as in this instance) with manufacturers who were at arms-length with the licensor. Where the latter occurred, the licences were exclusive for the territory involved, such that not even Duffy-Mott competed in an area in which the recipe and trademark had been licensed to another. 6 Consistent with this, the licence granted to Caesar Canning was an exclusive one in the geographical areas to which it applied. Duffy-Mott agreed to supply Caesar Canning with a "pre- mixed" portion of the dry ingredients required by the Clamato recipe, so that Duffy-Mott was never required to disclose the components and proportions of its unique "spice blend" to Caesar Canning. The Agreement was stated to be determinable by either party on twelve months' written notice, and contained the following restrictive covenant: 7. The LICENSEE agrees that during the term of this Agreement and for a period of 5 years thereafter a LICENSEE will not manufacture, produce, market, advertise, distribute or sell in the Territory any other product which includes among its ingredients clam juice and tomato juice. 7 With Duffy-Mott's consent, Caesar Canning entered into a second agreement in 1981 with FBI Foods under which the latter agreed to "co-pack" (i.e., manufacture for a fixed fee per can) Clamato juice for the eastern Canadian market. The terms of this "Tolling Agreement" were similar in many respects to those of the Licensing Agreement: most notably, the packer was prohibited for a period of five years after the expiration of the Agreement, from manufacturing, selling or marketing "any other product which includes among its ingredients a combination of clam juice and tomato juice, or which includes among its ingredients a combination of beef broth and tomato juice", without Duffy-Mott's prior written consent. The Tolling Agreement was to last for five years ending in June 1986, unless either party terminated it on giving 18 months' notice to the other. Again, the "spice blend" used in Clamato juice was supplied in pre-packaged form so that the exact components and their proportions remained a secret known only to Duffy-Mott. (American regulations requiring the disclosure of the ingredients on each container did not require that the spices be particularized.) 8 In 1982, the shares of Duffy-Mott were acquired by Cadbury Schweppes Inc., an American corporation. Shortly thereafter, Duffy-Mott notified Caesar Canning that it was terminating the Licence Agreement effective April 15, 1983. Having invested in plant and equipment, Caesar Canning and FBI Foods began to cast about for a replacement product for Clamato juice. The trial judge's findings as to how they brought the competing product, Caesar Cocktail, into being are crucial: Lorne Nicklason, the Manager of Quality Control and Quality Assurance for Caesar Canning, had developed Caesar Cocktail over a few months in late 1982 at the behest of Mr. Glassner [the "directing mind" of Caesar Canning]. Mr. Glassner had told him to make a new product to compete with Clamato in the tomato cocktail market, very similar but not identical, as good as or better than Clamato, but without clams or other seafood. Mr. Nicklason developed a spice blend that produced a taste very similar to that of Clamato, working from the list of ingredients, the processing specifications, and the Clamato product. In December he began to make every third batch of Clamato using the new spice blend. He was careful to keep his activity secret from other employees. To ensure secrecy for his new spice blend, in the tradition of Duffy-Mott, he labelled it No. 42. Mr. Nicklason does not remember if he told Mr. Glassner about how he went about developing the new product. In fact, he made the new product using the same equipment and process as that required for Clamato and using what he knew of the Clamato recipe as a base. He was careful to ensure that the new product was chemically different from Clamato, so that it would not be the same product. To that end he measured the salt level, pH, and soluble solids to ensure that the new product had different numbers from those of Clamato. It is beyond doubt that without the formula and process information about Clamato Mr. Nicklason could not have developed Caesar Cocktail personally. He did not have the necessary skills. The evidence is equally persuasive that Caesar Canning could have developed a product as much like Clamato as Caesar Cocktail without using the Clamato recipe by hiring the appropriate skills. It could have done so within the 12-month notice period at modest cost. By February, Caesar Canning was able to produce Caesar Cocktail in preparation for its market entry in April. On March 4, 1983, [FBI] Foods began to manufacture Caesar Cocktail at its Trenton plant. Anyone who saw the recipe for Caesar Cocktail would have known that it was derived so entirely from the Clamato formulation as to be a virtual copy without clams. The other variations were very minor. [at 8-10; emphasis added.] As I understand it, from 1983 on, Caesar Canning and FBI Foods embarked on a "joint venture" for the production and marketing of Caesar Cocktail. In eastern Canada at least, this venture took the form of a jointly-owned corporation to which Caesar Canning provided its know-how and technical information (presumably including access to the Clamato derivative), and FBI Brands supplied "management, administrative, accounting and technical services" as well as marketing, promotion, and financial support. 9 The Court found that within a week of its termination of the Licensing Agreement, Cadbury Schweppes "knew the exact process and recipe for Caesar Cocktail", having obtained that information surreptitiously. However, none of the parties realized at the time that any of Cadbury Schweppes' rights were being infringed: Thus, by April 20, 1983, Cadbury Schweppes and FBI Foods both knew that Caesar Cocktail used the same process as Clamato and, except for clam broth, had the same ingredient list. Although only Cadbury Schweppes knew the precise composition of the Clamato spice blend, both were of the same view: the product Lorne Nicklason had developed did not infringe the restrictive covenant in the Licence Agreement. Both would also have known that Caesar Cocktail was a virtual copy of Clamato, without clam broth. Cadbury Schweppes knew that a triangle taste test it had conducted concluded that a consumer could not distinguish between Clamato and Caesar Cocktail. The surprise was that the product tasted enough like Clamato, despite the absence of clam broth, that at least some consumers could not distinguish them. In effect, the restrictive covenant did not protect Clamato from competition. Mr. Kurlender considered that there was nothing confidential in the process, which was standard for tomato cocktail products. He knew nothing about the spice blend, so was content to market Caesar Cocktail as a cheaper alternative to Clamato without concern about infringing any "proprietary" rights. He did not turn his mind to any duty of confidence Caesar Canning might have been under to Duffy-Mott and its successor, Cadbury Schweppes. Nor did anyone at Cadbury Schweppes. Despite continuing access to legal advice, no one seems to have turned their mind to the possibility of a breach of a duty of confidence from which legal consequences might flow. Thus, despite their perfect knowledge about what Caesar Canning and FBI Foods were producing and marketing in direct competition with Clamato, Cadbury Schweppes did nothing to alert either of them to any concerns about Caesar Canning having misused the Clamato recipe. [at 11-12.] 10 On April 16, 1983, the day after the Licensing Agreement expired, Duffy-Mott granted to Cadbury Schweppes Powell Inc. the right to manufacture and market Clamato juice in Canada. I understand that this company, which later became "Cadbury Schweppes Canada Inc." and still later was renamed "Cadbury Beverages Canada Inc.", has always been a subsidiary of Cadbury Schweppes plc, a U.K. holding company. 11 In 1985, Duffy-Mott merged with various other corporations under the name Cadbury Schweppes Inc., which thereupon assumed the rights and obligations of Duffy-Mott as the owner of the recipe and the Clamato trademark. The amalgamation documents were not in evidence but it seems common ground that the plaintiff Cadbury Schweppes Inc. is the successor to all of Duffy-Mott's rights in the Clamato recipe and trademark. Counsel before us agreed that contrary to the trial judge's statement at p. 58 of her Reasons that this corporation is the parent company of Cadbury Beverages Canada Inc., it is in fact also a subsidiary of the U.K. holding company, Cadbury Schweppes plc. In any event, the net result of the restructuring was and remains that Clamato is manufactured and marketed in this country exclusively by the plaintiff Cadbury Beverages Canada Inc. and that the Canadian corporation pays a royalty to its American sibling for the use of the Clamato recipe and trademark. 12 In 1985, financial difficulties encountered by Caesar Canning culminated in the appointment of a receiver of its business. The defendant FBI Foods negotiated to purchase the company's assets for $950,000 and then assigned its rights to purchase, to a wholly-owned subsidiary (which may or may not have been incorporated for this purpose), the defendant FBI Brands. FBI Brands' acquisition of the assets, including the right to produce Caesar Cocktail, completed on January 10, 1986. The company has produced Caesar Cocktail at its plant in Richmond, British Columbia since that time. 13 It was not until June 1987 that Cadbury Schweppes (which term was used by the trial judge and counsel to refer generally to the Cadbury Schweppes group of companies) first "expressed concern" to the FBI companies about their competing product. Until that time, Cadbury Schweppes "considered they could protect their share of the tomato cocktail market only by enforcing covenants by Caesar Canning in the Licence Agreement" not to produce or market a product containing clams and not to use the "Clamato" trademark. Once the FBI defendants delivered a demand for particulars, another year passed before the plaintiffs filed their notice of intention to proceed. Thus, the trial judge said, the plaintiffs allowed some six years to elapse after the termination of the Tolling Agreement before they proceeded with the action. During that time, the FBI companies developed a market for Caesar Cocktail that formed a significant part of their production. Breach of Confidence 14 Despite their delay, the plaintiffs were found by the trial judge to have made out an actionable breach of confidence. The Court ruled ___ and this was not appealed from ___ that the three requirements set forth in Coco v. A.N. Clark (Engineers) Ltd. [1969] 2 R.P.C. 41 (Ch. D.)at 47-48 had been met ___ namely, that the information in question (even without the spice blend, presumably) was confidential, that it had been communicated in confidence, and that it had been misused by the party to whom it was communicated. (These three criteria were adopted by the Supreme Court of Canada in LAC Minerals Ltd. v. International Corona Resources Ltd. (1989) 61 D.L.R. (4th) 14 at 20 (La Forest, J.) and at 69-70 (Sopinka, J.).) The trial judge rejected the argument, now made on the cross-appeal before us, that on a proper construction of the Licence and Tolling Agreements, the only restriction on Caesar Canning and FBI Foods intended by the parties was the five-year restrictive covenant quoted at paragraph 6 above. Instead, she found that the parties had realized that the Clamato recipe was the "property" of Duffy- mott, and that "any reasonable person in [the] shoes [of Mr. Glassner and Mr. Nicklason] would have known that the Licence Agreement did not permit them to copy the recipe . . . The fact that all parties were ignorant of that law is immaterial to the question of use. That copying was a misuse of confidential information." 15 Equally important was the Court's finding that Caesar Canning could have developed a product "as much like Clamato as Caesar Cocktail without using the Clamato recipe by hiring the appropriate skills. It could have done so in the 12-month notice period at modest cost." Thus by copying the recipe (minus the spice blend, which was never disclosed), Caesar Canning gained a 12-month "headstart" or "springboard" in coming to market with its product. Damages 16 In approaching the question of remedy, the trial judge took as her starting-point the fact that the action for breach of confidence "does not rest solely on one of the traditional jurisdictional bases for action of contract, equity or property." (per Sopinka, J., in LAC Minerals at 74.) Noting that the Supreme Court of Canada has supported a "flexible approach to equitable principles" and that the defences of laches and acquiescence, "subsumed under the principle of equitable estoppel, can defeat a claim for breach of confidence, whatever its jurisdictional base", she considered how such principles applied to Mr. Glassner and the "FBI defendants" respectively. Applying Mentmore Manufacturing Co. Ltd. v. National Merchandising Co. Inc. (1978) 89 D.L.R. (3d) 195 (Fed. C.A.), she concluded that it was fair Mr. Glassner should be required to pay damages and that Cadbury Schweppes' delay in complaining about his misuse of confidential information would not affect the remedy or amount of damages he should pay. (I note parenthetically that Mr. Glassner abandoned his appeal of the trial judge's order and therefore I need say nothing further about him.) 17 The defendant Mr. Kurlender, the chief operating officer of FBI Foods until the spring of 1986, was found to have known of the facts constituting the breach of confidence in 1983 and to have been indifferent to the risk he allowed his employer to take in "reformulating" Clamato into Caesar Cocktail. He was therefore held to be liable and his employer FBI Foods was vicariously liable. 18 As far as FBI Brands was concerned, the trial judge found that Cadbury Schweppes' failure to complain about the breach of confidence between 1983 and 1987 had "lulled FBI Brands into paying for the Caesar Cocktail recipe and then continuing to produce it." In these circumstances, she held, it would be unfair to require this defendant to pay damages. In her words, "The lack of vigilance of Cadbury Schweppes in protecting its recipe during those four years deprives it of the right to a remedy now against those not established to have known about the breach of confidence in 1983." 19 Having dealt thus with plaintiffs' delay, and having decided that they were entitled to a remedy against the defendants Glassner, Kurlender and FBI Foods, the Court then ruled that that remedy would be limited to "an award of damages in favour of Cadbury Schweppes Inc. for the headstart Caesar Canning and therefore, FBI Foods, gained from their use of the Clamato recipe to develop Caesar Cocktail." No remedy whatsoever was granted to the plaintiff Cadbury Beverages Canada Inc., although the trial judge left open the possibility this plaintiff might be entitled to compensation notwithstanding the absence of a direct relationship with any of the defendants. She saw the issue as largely academic "when the third party is a wholly-owned subsidiary of the 'confidor'." (p. 58.) On this technical point, the trial judge was mistaken, since as earlier noted, both plaintiffs are in fact subsidiaries of the same parent company. I will return, however, to the question of which plaintiff(s) are entitled to a remedy against which defendant(s) later in these Reasons. Injunction 20 As for the plaintiffs' prayer for a permanent injunction, the trial judge stated that "this is not a case for an injunction and has not been since mid-1983, if it ever was." Again, Cadbury Schweppes' failure to take action within a reasonable time from when it knew its recipe had been copied (late April 1983) disentitled it to this remedy ___ in the Court's analysis, "It is no answer to say that Cadbury Schweppes did not know the legal consequences which flowed from the breach of confidence any more than such ignorance of the law is a defence for Mr. Glassner and the FBI defendants." 21 The trial judge referred to several authorities dealing with whether and when injunctive relief may be granted to enjoin the misappropriation of information that is "partly private and partly public." In particular, she noted the often-quoted judgment of Lord Denning in a "springboard" case, Seager v. Copydex, Ltd. [1967] 2 All E.R. 415 (C.A.): When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it: or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. [at 417; emphasis added.] The trial judge noted a passage along similar lines in the judgment of La Forest, J. in LAC Minerals, supra, at 25, the decision of the Ontario High Court in Schauenburg Industries Ltd. v. Borowski (1979) 101 D.L.R. (3d) 701, and two Quebec cases, Sant‚ Naturelle Lt‚e. v. Les Produits de Nutrition Vitaform Inc. (1985) 5 C.P.R. (3d) 548 (Que. S.C.) and Montour Lt‚e. v. Jolicoeur (1988) 19 C.I.P.R. 25 (Que. S.C.). In the latter case, it was found that recipes stolen by the defendant had been "confidential know-how and trade secrets and that the defendant had used them as a springboard for his own products." Still, the Court in Montour refused to make an interlocutory injunction permanent because the defendant could have developed a similar product within about a year "even without having used the plaintiff's recipes as a springboard to get an unfair headstart with plaintiff's customers, i.e., even without defendants having resorted to unfair competition." Thus the plaintiff's damages were limited to one year's lost profits. 22 The trial judge in the instant case concluded that this approach was appropriate in the circumstances before her. She made the following critical ruling, which is important enough to quote in its entirety: Caesar Canning or the FBI defendants could have developed a new product to compete in the tomato cocktail market within the 12 month notice period, without using the Clamato recipe. Indeed, it is almost certain that one or both of them would have entered the market with a competing product within that period. FBI Foods had begun the process of developing a new product when Mr. Glassner told them he had developed Caesar Cocktail. That new product could have been as close to Clamato as is Caesar Cocktail. What both FBI Foods and Caesar Canning saved was the cost of hiring a competent person to assist in the in-house development of a new product. Although no loss flows directly from the copying, I think it fair that Mr. Glassner, Mr. Kurlender, and FBI Foods should be required to pay damages in the amount of that cost saved. Because the plaintiffs did not face any competition during the headstart period or subsequently, that it would not have faced if there had been no misuse of the recipe, neither plaintiff is entitled to damages for lost profits or lost royalties. [at 57; emphasis added.] 23 The comment that no loss had been incurred by the plaintiffs as a result of the copying of the Clamato recipe was repeated in the Court's second judgment dated December 9, 1994. That judgment disposed of the plaintiffs' application for leave to enter judgment on the verdict and to waive damages for the breach of confidence. As Mr. Giles acknowledged before us, the plaintiffs at that time sought to reverse their previous election (made by previous counsel) not to seek the "disgorgement" of the profits earned by the defendants through their use of the Clamato recipe. Not surprisingly, this motion was refused. In the course of her ruling, the trial judge again said the plaintiffs had not proved any loss: Like the plaintiffs in LAC Minerals, the plaintiffs here did not seek the remedy of an accounting for profits, or any remedy based on the defendants' ill gotten gains. They sought compensatory damages. When they did not prove any loss caused by the misuse of the Clamato recipe, I awarded what have become to be known as "headstart damages" for reasons of fairness. Neither fairness nor justice requires the consideration of another remedy after trial and judgment. Just the reverse. Unjust benefit underpins the waiver of tort principle. Had the claim focused on the benefit to the defendants, the trial might have proceeded differently. . . . Moreover, disgorgement takes away only the gain realized through the wrong. It would require a trial to determine what, if any, of FBI Foods' profits since 1987, flowed from the misuse of the Clamato recipe by Caesar's [sic] Canning with the knowledge of Mr. Kurlender, imputed to FBI Foods, in 1982 and 1983. This is not a case where the defendants had agreed not to compete with the plaintiffs. . . [D]isgorgement will rarely be an appropriate remedy in cases where a confidee's only misuse of confidential information is as a springboard. In reaching this conclusion I have considered the unfairness or injustice that Mr. Giles says results from a finding of a breach of confidence without detriment to the confidor. The inability to prove loss caused by the misuse of confidential information is one of the possibilities that counsel must take into account when they advise a client how to prosecute a claim for breach of confidence and what remedies to seek. [at 5-6; emphasis added.] 24 The Court's final order was that the defendants Glassner, Kurlender and FBI Foods pay to Cadbury Schweppes Inc. the sum of $29,761.20, "being the cost of what FBI Foods Ltd. and/or Caesar Canning Ltd. would have paid to develop a product to compete in the tomato cocktail market in Canada." $29,761.20 was the amount determined by the Registrar based on evidence that Dr. Hugunin, an expert in food technology consulted by the defendants in connection with this litigation, had produced a tomato cocktail product very similar to Clamato, for this amount in a period of 16 weeks. By using the Clamato recipe instead, then, the defendants had been saved this expense. ANALYSIS The Effect of the Agreements 25 Since the defendants' cross-appeal raises two threshold issues concerning their liability, I will deal first with those. The defendants contend that the trial judge failed to place any or sufficient weight on the devices normally used by courts to assist in the interpretation of contracts ___ including reference to the "factual matrix" and to the subsequent conduct of the parties, and the doctrines of expressio unius and contra proferentem, for example. Had she done so in connection with the Licence and Tolling Agreements, they argue, it would have been apparent the parties intended that Caesar Canning and FBI Foods would be free to use the Clamato recipe upon termination of the respective Agreements, subject only to the restriction regarding the use of clams in any competing product, and the use of the Clamato trademark. 26 I agree with Mr. Giles that the doctrine of contra proferentem and reference to extrinsic evidence surrounding a contract are normally resorted to only when the document contains an ambiguity in the sense that "after considering the agreement itself, including the particular words used in their immediate context and in the context of the agreement as a whole, there remain two reasonable alternative interpretations": per Lambert, J.A. in Re C.N.R. and C.P. Ltd. (1978) 95 D.L.R. (3d) 242 (B.C.C.A.) at 262. There is no such ambiguity in the Agreements before us. The defendants' argument misses the point that the trial judge did not reach her conclusions as a matter of contractual interpretation. She found that an obligation of confidentiality arose as a result of the circumstances of the parties' relationship, and outside the four corners of the Agreements. She correctly considered the authorities dealing with the interaction of contract and obligations of confidence, including BG Checo Ltd. International v. British Columbia Hydro and Power Authority (1993) 99 D.L.R. (4th) 577 (S.C.C.), Coco's case, supra, and Tournier v. National Provincial [1924] 1 K.B. 461 (C.A.), and concluded as follows: In my view, it is settled law that the obligation of confidence exists independently of a contractual relationship, which it may supplement. Confidences are protected independently of contract because 'In the modern world the exchange of confidential information is both necessary and expected.' (per La Forest in LAC Minerals, supra, at 47). It is sensible that this general duty of confidence should yield to private ordering when the parties have provided expressly, or by necessary or reasonable implication, for its contradiction or limitation. In such circumstances, the private arrangements will provide an answer to the question: 'what is the confidee entitled to do with the information?' [at 33-34.] This reasoning is clearly consistent with the judgment of La Forest, J. in LAC Minerals, supra. He ruled that the law imposes on the confidee of confidential information, the onus of showing its use was permitted, rather than placing on the confidor the onus of showing that its use was prohibited. In this regard, his Lordship reasoned: In establishing a breach of a duty of confidence, the relevant question to be asked is what is the confidee entitled to do with the information, and not to what use he is prohibited from putting it. Any use other than a permitted use is prohibited and amounts to a breach of a duty. When information is provided in confidence, the obligation is on the confidee to show that the use to which he put the information is not a prohibited use. [supra, at 24.] (See also Sopinka, J. at 73, quoting again from Coco's case, supra, at 48.) 27 Consistent with these remarks, the trial judge found at pp. 39-40 of her Reasons that the Agreements did not permit the copying of the recipe and that indeed Mr. Glassner and Mr. Nicklason "knew or should have known" that fact. Again, it was not contended before us that the trial judge erred in reaching this conclusion on the evidence or in her application of the law. Nor is any appeal taken from her finding that there was a general understanding in the food industry that "product-specific formula and process information" is confidential and proprietary. Again in the trial judge's words: Such information will not be disclosed to others or otherwise used, whether by employees, licensees, consultants or others, without the prior knowledge and consent of the owner. This industry custom operates whether or not an express confidentiality agreement is in place, and applies even to entirely generic products. This custom was well known and recognized at all material times by Caesar Canning and the defendants, and was a fundamental policy of their own operations. [at 17-18.] Regina Glass 28 The defendants' second threshold argument arises from the principle they say was established in Regina Glass Fibre Ltd. v. Werner Schuller [1972] R.P.C. 229 (C.A.) and Chicago Blower Corp. v. 141209 Canada Ltd. (1990) 30 C.P.R. (3d) 18 (Man. Q.B.) ___ that when confidential information is given so as to enable a business to be established, it is "given for all time". The trial judge referred to Chicago Blower and Regina Glass at p. 34 of her Reasons, but did not deal with this argument specifically. 29 I have two difficulties with this ground of appeal. First, I do not read the judgment of Lord Denning in Regina Glass as turning on a rule or point of principle ___ rather, his Lordship was engaged in the close construction of a particular contract and found that the parties to that contract could not have intended that at the end of their agreement (which extended from 1953 to 1968), the confidee of the plaintiff's patent information and know- how would be required to stop using that information completely and "close down its business altogether". 30 Second, if one were to imply, as the courts did in these cases, a right to continue using the information for all time, one would be contradicting the trial judge's conclusion here that it was implicit in the parties' relationship that the defendants would not copy, and were prohibited from copying, the Clamato recipe. Further, the instant case is not one in which, if the defendants were required to cease using the Clamato recipe, they would have to close down their business. As Mr. Giles notes in his factum, the Licensing Agreement indicated a common intention that at the end of its term, Caesar Canning would be free to produce and market a competing tomato cocktail, and that about twelve months (the notice period for termination) would be needed for it to develop such a product. Contractually, the only restriction was that Caesar Canning refrain from marketing a beverage containing clam juice and tomato juice, and from using the Clamato trademark. 31 For all these reasons, it seems to me that Regina Glass and Chicago Blower have no application here and that the defendants' cross-appeal must therefore be dismissed. Measure of Damages 32 I turn then to the two main issues raised on the plaintiffs' appeal ___ the remedy or remedies appropriate to the breach of confidence in this case. There can be no argument with the trial judge's starting-point that the action for breach of confidence is sui generis and combines aspects of contract law, equity and property. In LAC Minerals, both major judgments emphasized that this multi-faceted jurisdictional basis provides the Court with considerable flexibility in "fashioning a remedy", including an accounting of profits (although as La Forest, J. noted, that is not usually a restitutionary remedy), compensatory damages and injunctive relief. (See LAC Minerals, supra, at 46.) 33 Having noted this, however, the trial judge appears to have assumed that since the plaintiffs had elected not to seek an accounting of the defendants' profits, they were precluded from recovering substantive damages measured on any other basis. This assumption may be the source of her statements, quoted earlier, that the plaintiffs had not proven any "loss" ___ even though at p. 40 of her Reasons, it was also said that ". . . the misuse [of the recipe] has been to the detriment of the plaintiffs. No one argued to the contrary." The plaintiffs say they did suffer loss ___ which presumably would fall to be assessed once liability had been tried ___ and that they should receive damages aimed at restoring them as nearly as possible to the position they would have been in had no wrong occurred. Instead the trial judge gave only a nominal award ___ witness her statement that "when [the plaintiffs] did not prove any loss caused by the misuse of the Clamato recipe, I awarded what has come to be known as 'headstart damages' for reasons of fairness." 34 I believe the trial judge erred in this crucial part of her reasoning. First, it is my understanding that at the start of the trial, counsel had agreed that damages would be assessed by the Registrar and that the first trial, or first part of the trial, would be limited to the issue of liability alone. I for one would not be prepared to assume that if the plaintiffs were allowed to lead evidence on the point, they would be unable to show that they had suffered loss or that the defendants had 'gained at their expense.' I take this phrase from the judgment of La Forest, J., speaking for the majority in this regard in LAC Minerals, supra, where his Lordship said: In Air Canada v. British Columbia . . . I said that the function of the law of restitution "is to ensure that where a plaintiff has been deprived of wealth that is either in his possession or would have accrued for his benefit, it is restored to him. The measure of restitutionary recovery is the gain the [defendant] made at the [plaintiff's] expense." . . . . . . Restitution is a distinct body of law governed by its own developing system of rules. Breaches of fiduciary duties and breaches of confidence are both wrongs for which restitutionary relief is often appropriate. It is not every case that such a breach of duty, however, that will attract recovery based on the gain of the defendant at the plaintiff's expense. . . In breach of confidence cases as well, there is considerable flexibility in remedy. Injunctions preventing the continued use of the confidential information are commonly awarded. . . . An account of profits is also often available. Indeed in both courts below an account of profits to the date of transfer of the mine was awarded. Usually an accounting is not a restitutionary measure of damages. Thus, while it is measured according to the defendant's gain, it is not measured by the defendant's gain at the plaintiff's expense. Occasionally, as in this case, the measures coincide. . . More recently, a compensatory remedy has been introduced into the law of confidential relationships. . . . [at 45-46; emphasis added.] La Forest, J. then examined the reasons why in LAC Minerals a remedy measured by the defendant's gain at the plaintiff's expense might be more appropriate than a remedy compensating the plaintiff for the loss it had suffered, and ultimately concluded that in the circumstances, none of these reasons was persuasive. Further, there were policy considerations in favour of a restitutionary remedy: in his words, "The imposition of a remedy which restores an asset to the party who would have acquired it but for a breach of fiduciary duties or duties of confidence acts as a deterrent to the breach of duty and strengthens the social fabric those duties are imposed to protect." (at 48.) 35 It seems to me that when the trial judge awarded damages in the fashion and amount she did in the instant case, she failed to give any weight to the desirability of deterring breaches of confidence in future cases or strengthening the "social fabric" that underlies confidential business dealings, particularly in an era in which information and know-how are of such economic importance. The giving of a nominal award seems likely instead to encourage breaches of confidence, in that it allows the defendants ___ and here I paraphrase Mr. Giles' oral argument ___ unrestricted use of a recipe that Cadbury Schweppes as a world-wide licensor would never have sold, that it would never have sold to a competitor, and that it would never have sold for $30,000. 36 What measure of damages, then, was appropriate in this case? Mr. Giles argues in favour of a "restorative" measure, relying in part on the judgment of La Forest, J. in LAC Minerals from which I have quoted. Specifically, his clients seek damages in the amount of the royalties and profits they would have realized if the "unauthorized sales" by the defendants of their product based on the Clamato juice recipe had been made by the plaintiff Cadbury Beverages Canada, calculated up to the date of trial. Mr. Carroll on the other hand relies on the finding (which despite Mr. Giles' valiant attempts to persuade us to the contrary, was quite clearly made by the trial judge) that the recipe was springboard information ___ i.e., that the defendants could, without copying or using the Clamato recipe, have developed a product as much like Clamato juice as Caesar Cocktail is, within about 12 months. Thus, he says, any damages must be restricted to that "headstart" period. 37 The two seminal English cases on the topic are the judgments of the English Court of Appeal in Seager v. Copydex, Ltd. (No. 2) [1969] 2 All E.R. 718, and Dowson & Mason Ltd. v. Potter [1986] 2 All E.R. 418, both of which were referred to in LAC Minerals. In Copydex, the plaintiff was the inventor of a carpet grip. He disclosed his unpatented device to a company with which he was negotiating to sell the marketing rights of another grip, which was patented. After negotiations broke down, the company applied for a patent in respect of the first grip. The Court of Appeal allowed the inventor's action notwithstanding the defendant's honest belief that the idea for the grip was its own. On the subject of the measure of damages, the Court quoted from the judgment of Roxburgh, J. in Terrapin Ltd. v. Builders' Supply Co. (Hayes) Ltd., who first applied the term "springboard" to information that is private but discoverable: As I understand it, the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication, and a springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public. (See [1960] R.P.C. 128 (C.A.) at 130.) Continuing on from that proposition, Lord Denning in Copydex said: The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As for instance in this case. . . . When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it: or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. [at 417; emphasis added.] 38 Copydex was cited to the Court of Appeal in Dowson & Mason, supra, a case that involved the misappropriation of confidential information by a former employee of the plaintiff, and the use of that information by the second defendant. A reference was made seeking the Court's determination of the proper basis for assessing the resulting damages. The Registrar ordered that the proper basis for assessment was the plaintiff's loss of profits resulting from the wrongful disclosure and use of the information. The second defendant appealed from this order, contending that as in Copydex, the proper measure was the market value of the advantage gained by the second defendant. It sought to persuade the Court that where the information in question is such that "the plaintiff has no power to stop the defendant from discovering it of his own accord elsewhere", then there is nothing special about the information and damages should simply be its "value" as between a willing seller and willing purchaser. 39 The Court clearly rejected this approach in Dowson & Mason. Sir Edward Eveleigh said this: . . . counsel for the plaintiffs has referred the court to General Tire and Rubber Co Ltd v. Firestone Tyre and Rubber Co Ltd. [1975] 2 All E.R. 173, . . . As in the case of any other tort (leaving aside cases where exemplary damages can be given) the object of damages is to compensate for loss or injury. The general rule at any rate in relation to "economic" torts is that the measure of damages is to be, so far as possible, that sum of money which will put the injured party in the same position as he would have been if he had not sustained the wrong . . . That principle, enunciated by Lord Wilberforce, is one which has been stated time and time again by judges in assessing damages; we apply it right across the board. In an ordinary accident case, in which the plaintiff claims for loss of wages, the court seeks to compensate him by putting him in the position in which he would have been if he had been able to continue at work uninjured; but in every case the court looks at the particular position of the plaintiff in order to discover what would have been the position if the wrong had not been done to him. . . . Similarly, in a case such as the present, it seems to me that the particular position of the plaintiff has to be considered. Where we are dealing with someone who would have licensed the use of his confidential information, then almost invariably the measure of damages will be the price that he could have commanded for that information, and no question of loss of profits will arise, for the simple reasons that he was always ready to allow someone else to manufacture at a price. If the plaintiff was a manufacturer who would have licensed another to use his secret then again he would, probably in all cases, be in the same position as the inventor who had sold it, because he would have exposed himself to competition and loss of profits for a price, the price of the secret. If on the other hand he was the manufacturer who would not have licensed its use, then he would not have been exposed to competition at the time when he was so exposed because of the defendant's wrongdoing. This is the kind of analysis of the facts one has to make in every case in which the court has to assess damages. [at 421-2; emphasis added.] His Lordship interpreted Lord Denning, M.R.'s judgment in Copydex as applying Lord Wilberforce's "general rule" to the facts of the particular case rather than as establishing a proposition of law that "there are two different cases of breach of confidentiality, depending on the nature of the information which is obtained." (at 422). Stocker, L.J. agreed with Sir Edward Eveleigh in Dowson & Mason, adding at 423 that Copydex could not "be applied to a case such as this, where the plaintiffs obtained the rewards for their labours through the profits made by the sale of their products", as opposed to the sale of their ideas, like the inventor in Copydex. The same distinction was noted by Slade, L.J. at 424. 40 Mr. Carroll sought to persuade us that the focus apparent in these English cases on a plaintiff's status either as a licensor providing information in confidence to others or as a direct user of the information in manufacturing, amounted to an invalid "compartmentalization". At least at the trial level, Canadian courts appear to have taken a different approach, focussing on the nature of the information in question ___ and specifically whether it is "springboard" or not ___ that is more consistent with the "remedial flexibility" approved by the Supreme Court of Canada in LAC Minerals. He referred us in particular to three Canadian cases. The first was Schauenburg v. Borowski, supra, where an employee of the plaintiff had signed a confidentiality agreement with respect to all knowledge acquired by him in the course of his employment. While employed, he took certain drawings to which the plaintiff had copyright entitlement. After leaving his job, he used drawings to construct machines used in the manufacture of virtually identical products to those manufactured and sold by his former employer. The Court found that it would have taken the defendant two years to construct the necessary machines it needed to begin manufacturing the products. Thus if it were to enjoin the defendant permanently from making such products, it would be giving the plaintiff protection beyond that required in the circumstances. Since the two-year period was about to expire shortly after trial, an injunction was refused; but damages "based on loss of profits for the two years, together with punitive damages in the circumstances" were ordered. (The action was framed not as a breach of confidence but as a breach of fiduciary duty or alternatively, infringement of copyright.) 41 The other cases relied upon by Mr. Carroll were the two Quebec decisions referred to earlier, Sant‚ Naturelle and Montour, supra. In both the information misappropriated by the defendants was held to be springboard information, and in both the plaintiff's damages were therefore limited to compensation for profits lost during the headstart period. 42 Notwithstanding counsel's arguments, I do not regard these approaches to the assessment of damages as necessarily inconsistent. I endorse Mr. Giles' contention that in a breach of confidence case, there should be a restorative aspect to the assessment of damages and that in light of the equitable basis of this cause of action, a court should focus on the particular plaintiff before it rather than on the particular information misappropriated by the defendant. But even if one accepts that the damages should "put the injured party in the same position as he would have been if he had not sustained the wrong", one should not lose sight of the fact that by definition, the confidor of "springboard" information could never assume that he would have remained "in the same position" as he was in at the beginning of the headstart period. In other words, the plaintiff cannot ask the Court to restore him to a market monopoly position if in fact that position was vulnerable to attack in the form of legitimate competition from the defendant. That is the case here: in 1983, the plaintiffs' position was that it had a headstart (together with an established market share and recognized trademark) over Caesar Canning and the defendants. The Court found as a fact that any competitor who was so minded could, within 12 months, have come up with a product very much like Clamato, without copying the recipe. Thus an award of damages extending beyond the headstart period would go beyond what is necessary to restore the plaintiffs to their previous position and would effectively give them a right (the right to be free of competition from the defendants over several years) to which they were never entitled. 43 But while the defendants rely on the Canadian "springboard" cases to support the trial judge's order, in fact she did not follow them in ordering the damages she did. With the exception only of Lake Mechanical Systems Corp. v. Crandell Mechanical Systems Inc. (1985) 7 C.P.R. (3d) 279 (B.C.S.C.), which involved very different facts from those before us, no case was cited to us that limited a plaintiff's recovery in a case of breach of confidence, to the cost a defendant would have incurred in developing a competing product on its own. I see no logical connection between that amount and the injury suffered by the plaintiffs on any view of this case. Whether, as Mr. Carroll contends, the purpose of damages in this context is to effect some abstract form of justice between the parties, or whether as Mr. Giles contends it is to try to place the plaintiff in the same position it would have been had the wrong not occurred, the measure used here was inappropriate and ultimately did not do justice between these parties. 44 This is not to suggest that any one particular measure of damages should always be used in cases of this kind. As so many of the authorities suggest, the best measure in each case will depend upon the facts before the Court. As noted by La Forest, J. in LAC Minerals, in many cases the disgorgement of profits made during the headstart period will be appropriate; in others, the loss in value of the plaintiff's goodwill may be suitable; while in others, particularly where the plaintiff is in the business of selling its ideas, the "conversion" measure ___ the value of the misappropriated information itself ___ would seem adequate to effect full restitution. In the case at bar, an accounting of the defendant's profits was expressly eschewed and the plaintiffs were not in the business of selling their information. They chose to seek an amount that approximates what they would have earned had they made the "unauthorized sales" of Caesar Cocktail in Canada. This measure, or something like it, is the measure said by Fox, Canadian Law of Copyright and Industrial Design (2nd ed., 1967) at 686, to be the one usually appropriate for breach of copyright: see Dutalier Inc. v. Maribro Inc. (1988) 20 F.T.R. 224 (F.C.C.) at 230, and see also General Tire and Rubber Co. v. Firestone Tyre and Rubber Co. Ltd. [1975] 2 All E.R. 173 (H.L.) at 177, regarding breach of patent rights. Of all the available alternatives, it seems the most appropriate both in terms of the particular plaintiffs and in terms of the particular confidence that was breached in this case. It recognizes in a significant way what the defendants gained ___ not only what they saved ___ at the plaintiffs' expense, and it does not impose a forced sale on the wronged parties or import a fictional "market value" that is valid only between a willing buyer and willing seller. I would, however, restrict damages so measured to the 12-month headstart period. The Equities 45 Should the equities between the parties, however, deprive the plaintiffs of their remedy? The trial judge appears to have felt that the equities against recovery by the plaintiffs came close to balancing the equities in favour of recovery. Notwithstanding that this "balancing" was largely discretionary, I believe she erred in doing so. The evidence is that Mr. Nicklason of Caesar Canning developed Caesar Cocktail using the Clamato recipe in circumstances of secrecy; that Mr. Glassner (whose company was then in a joint enterprise with FBI Foods) in fact told customers (that is, persons to whom he had previously sold Clamato juice after 1983) that he was going to be selling the "same product" but without having to pay a royalty on it; and that Mr. Kurlender of FBI Foods did not consider any duty of confidence his company might have owed to Duffy-Mott. The trial judge's findings, moreover, that Mr. Glassner was "alive to the peril of what his company was doing under his direction" and that having learned of the breach of confidence in 1983, FBI Brands, a corporation controlled by FBI Foods, chose "to defend the action rather than change", do not sit comfortably with the suggestions elsewhere in the Reasons that the corporate defendants were unaware of their obligation not to appropriate the Clamato recipe to their own use. When these factors are considered, the equities between the parties do not come close to a balance. 46 Nor do I think the plaintiffs can be said to have been guilty of laches or other acquiesence sufficiently serious to deprive them of a remedy. The delay was by all accounts due to the plaintiffs' ignorance that they had a right to complain, not to any conscious delaying on their part. It is trite law that before one can be said to acquiesce in the breach of one's rights, one must be aware that one has such rights: see Halsbury (4th ed., 1992), v. 16 at para. 927. Moreover, the "flexibility" applied to equitable principles in cases such as LAC Minerals and Canson Enterprises Ltd. v. Boughton & Co. [1991] 3 S.C.R. 534, should not have the effect of diluting to the point of disappearance the principles themselves. One of those principles, approved by the trial judge at p. 42 of her Reasons, is that acquiesence on the part of a plaintiff will deprive it of its legal right only if it is of such a nature that it would be "dishonest or unconscionable of the plaintiff to set up that right after what has occurred": per Buckley, L.J. in Shaw v. Applegate [1977] 1 W.L.R. 970 (C.A.) at 978; see also Litwin Construction (1973) Ltd. v. Kiss (1988) 29 B.C.L.R. 88 (B.C.C.A.).) Parties 47 The amount of damages determined in accordance with the discussion above should, in my tentative view, be payable to Cadbury Beverages Canada Inc. as well as to its American sibling, the defendant Cadbury Schweppes Inc., jointly. I say this because the licence agreement that existed between those parties permits the Canadian corporation to manufacture and to sell Clamato juice in Canada, but does not contain an express grant of the right to enforce any confidentiality rights of the licensor in this country. Thus on first blush, it is not clear to me whether the Canadian corporation was entitled to enforce all the rights of its licensor in respect of the Clamato recipe. We have not, however, had the benefit of extensive argument on the point. If counsel wish to address it, they may do so by written submissions. Failing that, the fact that Cadbury Schweppes Inc. is the successor of the "confidor" would seem to entitle it at least in theory to participate in the award. Any royalties that would have been paid to the American corporation would have to be deducted from the profits of Cadbury Beverages Canada Inc. in any event, and the award I propose will avoid double compensation and complex accounting adjustments. Another issue raised by the plaintiffs was whether judgment should be entered against FBI Brands as well as FBI Foods on the ground that FBI Brands knowingly continued to use the recipe after learning it was confidential information belonging to the plaintiffs. It was FBI Foods that sold Caesar Cocktail during the 12-month period in which we are concerned, however, and the plaintiffs' damages are to be limited to that 12-month period. Since FBI Brands had no involvement with Caesar Cocktail until long after the end of the headstart period, it seems illogical for it to be liable for the damages I propose. Accordingly, I would order damages only against FBI Foods and Mr. Kurlender. Injunction 49 This brings me at last to the question of whether the corporate defendants and Mr. Kurlender should also be permanently enjoined from their continued use of the recipe. There is authority for the granting of an injunction in addition to damages in a springboard context: see Talbot v. General Television Corp. Pty. Ltd. [1980] V.R. 224 (S.C.). There the trial judge noted that: What [counsel for the plaintiff] submitted was that my inquiry should be as to what compensation by way of damages is required to put the plaintiff in the position he would have been but for the unauthorized use of the intellectual property which was his. If by his submission Mr. Archibald means that I should inquire into what money compensation would represent the restitution to the plaintiff of the value by which his right, which equity recognized, has been depreciated by the defendant's breach of confidence, then I think it is consistent with principle and correct. To me there is nothing repugnant to equity's concept of restitution or restoration in granting an injunction and adding money compensation for detriment in respect of which the injunction is not nor purports to be effective. [at 243.] The judge's reasoning was upheld on appeal by the full Court at [1980] V.R. 250. I also note the comments of Lord Evershed, M.R. in Terrapin, supra, at 135, where he doubted that the misappropriation of confidential information by a competitor should be regarded "merely as a matter of compensation in pounds, shillings and pence." His Lordship quoted the statement of Smith, L.J. in Shelfer v. City of London Electric Lighting Co. [1895] 1 Ch. 287 at 322, that "A person by committing a wrongful act (whether it be a public company for public purposes or a private individual) is not thereby entitled to ask the Court to sanction his doing so by purchasing his neighbour's rights, by assessing damages in that behalf. . ." 50 Mr. Carroll argues, however, that the very nature of a springboard case usually makes injunctive relief inappropriate ___ in his words, "since the remedy is based on the headstart the defendants gained by saving the time and trouble necessary to reverse engineer the product, it would over-protect the plaintiff to permanently eliminate a competitor from a commercial market." I would agree with this analysis if the effect of the injunction were in fact to "permanently eliminate" a competitor of the plaintiffs from the tomato cocktail market. In fact, the injunction proposed would not do so. Rather, it would preclude the defendants from marketing a product that was developed by breaching the plaintiffs' confidence. The evidence indicates that before it copied the Clamato recipe, Caesar Canning and/or FBI Foods were well on their way to developing a competing product in the proper way. The trial judge found, of course, that they would have succeeded in doing so within twelve months. Thus the "over- protection" referred to by Mr. Carroll seems more apparent than real. An injunction would prohibit the defendants only from continuing to use the plaintiffs' confidential information in order to compete ___ it would not stop them from competing legitimately. Nor would an injunction at this point be meaningless, since the Clamato recipe is to this day still not public. No-one, including the defendants, has been able to reproduce Clamato juice exactly; and no-one except the defendants has in fact come up with a product that is close to Clamato. 51 On a conceptual level, an injunction would avoid the appearance (and reality) of the Court's ordering a forced sale of the recipe for what even the trial judge regarded as a nominal amount, and would serve the policy ends of restitution referred to by La Forest, J. in LAC Minerals, supra, at 48. I take comfort as well from a decision of the New Zealand Court of Appeal, AB Consolidated Ltd. v. Europe Strength Food Co. Pty. Ltd. [1978] 2 N.Z.L.R. 515, which involved the misappropriation by "ABC" of certain information that could be characterized as "springboard" (although when precisely it would have been discovered by others was "speculative".) The trial judge awarded a permanent injunction as well as an accounting of ABC's profits from its misuse of the information, and the Court of Appeal upheld that result. It noted that as a "general rule", the court will restrain the improper or unfair use of confidential information that was provided for a limited purpose. In its analysis: . . . it is not sufficient for a defendant to answer a request for an injunction on the basis, by itself, that the information could be discovered independently or that it was likely to become a matter of public knowledge. The real answer (and not merely as a matter of commercial morality) is to avoid a situation of confidence that could result in subsequent embarrassment. It may be that in certain cases where such a situation has developed almost fortuitously, the Court will prefer the remedy of damages to that of injunction. However, those who seek and accept information which they know has been given in confidence for a limited purpose ought not be able to misuse it feeling that a money payment will sufficiently balance the present and future injury thereby caused to their informant. [at 525; emphasis added] 52 Mr. Carroll brought to our attention several cases in which injunctive relief was refused for various reasons. In Schauenburg, supra, the offending machines were already in operation and the two-year "springboard" period had almost expired. In Sant‚ Naturelle, supra, the Court noted that "the real prejudice has not existed for some time, especially if one considers the financial situation of the defendant and the third parties". The secret in question would in any event have become known within three months by other persons in the industry. In Saltman Engineering Co. Ltd. v. Campbell Engineering Co. Ltd. (1948) 65 R.P.C. 203 (C.A.), the Court was reluctant to order an injunction because such an order would involve "the destruction or sterilization of tools which might serve a useful purpose" and damages, covering both past and future acts, would be an adequate remedy. The Court also made it clear that it regarded its decision as turning on questions of fact "involving . . . matters of no real importance and depending entirely on the particular facts of this case." (at 219.) 53 All of these cases turned on their particular facts and the particular equities between the parties. I have already indicated that I differ from the trial judge in my assessment of the equities in the case at bar. There were as well other equities weighing in the plaintiffs' favour that might be mentioned ___ the fact that the Clamato recipe is used in the manufacture of products world-wide and is either licensed by Cadbury Schweppes to non- competitors or used directly by Cadbury Schweppes subsidiaries in their own manufacturing operations; and the fact, already noted, that prior to copying the Clamato recipe, FBI Foods had gone a long way towards developing its own tomato cocktail in the normal way. If indeed it could have done so through the expenditure of only $30,000 and twelve months of time, the imposition of an injunction can hardly be punitive vis-…-vis the defendants. Enforceability 54 On a practical level, Mr. Carroll points out quite rightly that a court will not make an injunction that is unenforceable or impracticable. Courts will rarely grant injunctions where the obligation of the defendant involves "performance of an ongoing and complex nature, thus requiring further judicial direction or intervention": McKenzie Barge & Marine Ways Ltd. v. District of North Vancouver (1964) 44 D.L.R. (2d) 382 (B.C.C.A.), appeal allowed on other grounds (1965) 51 W.W.R. 193 (S.C.C.). The defendants say in their factum that: . . . in the present case, it is difficult to see how an injunction could be enforced at this time, all of the ingredients are, and always have been, in the public domain. [FBI] Brands never knew the percentages of the spice blend or the composition of the special powder, and it has made substantial changes to the Clamato recipe. . . . In these circumstances, the appellants would undoubtedly question any attempts to reverse engineer a new formula, and this would involve continuous supervision by the court of highly technical matters. The FBI respondents therefore submit that a permanent injunction would be entirely inappropriate in the present case. The obvious response is that the plaintiffs were able in this case to prove that Caesar Cocktail was an "obvious derivative" of Clamato and that Mr. Nicklason had used the Clamato recipe as his base in making the new product. Presumably, the plaintiffs could prove misuse again if it became necessary. As difficult and complex as it might be, I am persuaded that the interests of justice require this Court to enjoin the continued breach of confidence by the defendants ___ that is, that it enjoin the defendants from making use in the manufacture of a tomato cocktail, the specifications, technical information, advice, and derivatives thereof, that were disclosed to Caesar Canning Ltd. and/or the defendants or any of them in confidence pursuant to the Licensing and Tolling Agreements, and that are not otherwise generally known. 55 If counsel wish to speak to this order further, they may of course do so. My hope is that the defendants will conduct themselves so as to obviate the need for any further judicial supervision or intervention. 56 I would allow the appeal, grant judgment in favour of the plaintiffs jointly against the defendants Kurlender and FBI Foods in an amount to be assessed by the Supreme Court of British Columbia in accordance with these Reasons, and grant a permanent injunction against all the defendants on the terms described above. "The Honourable Madam Justice Newbury" I AGREE: "The Honourable Mr. Justice Carrothers" I AGREE: "The Honourable Madam Justice Proudfoot"