Order covers confidential commercial data that senior VP calls clothing company’s ‘special sauce’
In a proceeding alleging trademark infringement against Aritzia Inc. and Aritzia LP, the Federal Court issued a “solicitor’s eyes only” (SEO) order over product-level confidential information dubbed Aritzia’s “special sauce” by the company’s senior vice president and corporate controller.
Northern Reflections Ltd. v. Aritzia Inc., 2026 CanLII 71256 (FC), arose from Northern Reflections Ltd.’s claim that Aritzia infringed its registered trademark for EFFORTLESS, in association with pants and shorts, by selling pants and shorts branded as “EFFORTLESS” or “THE EFFORTLESS PANT”.
Aritzia moved for a protective order over some documents and information that the parties would exchange during the discovery phase. The parties agreed to the issuance of such an order.
However, a dispute arose regarding Aritzia’s request for an SEO designation, which would prevent Northern Reflections from accessing certain confidential information produced by Aritzia if Aritzia believed in good faith that the information:
- contained “sales, marketing, financial or other commercially sensitive information or proprietary information not otherwise known or available to the public…”
- had commercial value to Northern Reflections
- could harm Aritzia if available to Northern Reflections
SEO order granted
The Federal Court ruled that Aritzia met the test for the grant of a protective order with an SEO designation.
Regarding the first part of the test in AB Hassle v. Canada (Minister of National Health and Welfare), 1998 CanLII 8942 (FCTTD), the court found that Aritzia protected the sensitive information’s confidentiality at all relevant times and by various mechanisms.
Regarding the second component of the AB Hassle test, the court determined that this case involved “unusual circumstances” warranting an SEO order.
The court added that the SEO order’s built-in mechanisms would mitigate any concerns about the order’s impact on solicitor-client relations. The court explained that counsel could challenge the designation of information if they deemed it necessary to disclose certain documents to their clients.
Whether parties were competitors
The Federal Court left it to the trial judge in the underlying trademark infringement action to determine on a final basis the factual issue of whether the parties were competitors.
However, the court said the following findings, based on the limited record, favoured issuing an SEO order:
- The parties operated in the same industry
- Northern Reflections claimed to be Aritzia’s competitor in this litigation
- Northern Reflections was at least an aspiring or would-be competitor
Sensitivity and value of information
The Federal Court’s decision recognized the highly sensitive nature of the information that would be subject to the SEO order – specifically, product-level data on sales and product costs, manufacturing costs, and gross profit margins for 33 products in Aritzia’s EFFORTLESS product line.
The court acknowledged that the product-level confidential information would have substantial value to Northern Reflections and other would-be competitors within the highly competitive women’s fashion industry.
On the balance of probabilities, the court saw a real and substantial threat that giving access to the valuable commercial information could enable a potential competitor like Northern Reflections to copy Aritzia’s costing and sales structures, thus seriously harming Aritzia’s market share and financial position.
The court added that granting access to the commercial data could enable Northern Reflections’ management team members, some of whom supported or served in roles at other women’s fashion brands or companies under the same ownership, to unwittingly and unintentionally misuse the information in future business matters.
Costs order
Pursuant to the parties’ request, the Federal Court awarded Aritzia, as the successful party on the motion, $5,500 in lump sum costs, plus reasonable disbursements.
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