When Trade Secret Allegations Are Not Enough: Alberta Court Rejects Interlocutory Injunction Request

Allegations of trade secret misuse often prompt urgent applications for injunctive relief. Businesses facing competitive pressure may seek to restrain former employees or competitors before the alleged harm becomes irreversible. However, as the Alberta Court of King’s Bench recently confirmed, even serious allegations of misconduct will not justify extraordinary pre-trial relief unless the legal test is strictly met.

In AGI SureTrack, LLC v. OPISystems Inc., the Court refused to grant an interlocutory injunction restraining a competitor from selling an allegedly infringing product, despite finding that there was a serious issue to be tried. The decision underscores the central importance of clear, non-speculative evidence of irreparable harm, particularly where market impact and competitive disadvantage are alleged.

The Dispute Between Competing Grain Technology Companies

AGI SureTrack, LLC (“AGI”) and OPISystems Inc (“OPI”) are competitors in the agricultural technology sector, specifically in the market for grain management systems used to monitor moisture, temperature, and storage conditions in grain bins. AGI markets its system under the name BinManager, while OPI offers competing systems, including OPI Blue and the newer EPIQ platform.

Beginning in 2022, several former AGI employees, including a senior software engineer, left AGI and later joined OPI. AGI alleged that these individuals possessed highly confidential proprietary information, including source code underlying BinManager, and that this information was improperly used to accelerate OPI’s development of competing products.

AGI commenced parallel litigation in Missouri, Kansas, and Alberta. The Alberta action was stayed pending the outcome of the U.S. proceedings, with one exception: AGI was permitted to seek interlocutory injunctive relief in Alberta to restrain ongoing conduct alleged to be occurring in Canada. It was under this narrow carve-out that AGI brought its injunction application.

AGI Sought Injunctions Restraining Competitor From Accessing Confidential Trade Information

AGI sought sweeping interlocutory relief, including orders restraining OPI from:

• Copying, accessing, or disclosing AGI’s source code or any derivative code;
• Permitting any person to access or review the source code; and
• Selling or providing access to software products — including EPIQ — alleged to be based on AGI’s confidential information.

In addition, AGI sought a preservation and forensic production order requiring access to OPI’s digital systems and source code repositories.

Together, these orders would have had the practical effect of halting significant portions of OPI’s Canadian business pending trial.

Interlocutory Injunctions in Alberta

The Court confirmed that the governing test for interlocutory injunctions is the tripartite test set out by the Supreme Court of Canada in RJR-MacDonald Inc. v Canada (Attorney General). An applicant must establish:

1. A serious issue to be tried;
2. Irreparable harm if the injunction is not granted; and
3. The balance of convenience favours granting the injunction.

Although injunctions involving employment and confidentiality issues sometimes attract a higher “strong prima facie case” standard, the parties agreed that the lower “serious issue” threshold applied in this case.

Notably, the Court emphasized that interlocutory injunctions are extraordinary remedies and must be approached with caution, particularly where the Court is being asked to interfere with an ongoing commercial enterprise before trial.

Serious Issue to Be Tried: Low Threshold, Met on the Evidence

On the first branch of the test, the Court found that AGI had satisfied the requirement of demonstrating a serious issue to be tried.

AGI advanced claims for breach of confidence, conspiracy, and inducement of breach of contract, but the Court focused its analysis on the breach of confidence claim. Applying the Supreme Court of Canada’s framework from Lac Minerals Ltd. v. International Corona Resources Ltd., the Court considered whether:

• The information at issue was confidential;
• It was communicated in confidence; and
• It was misused.

The Court accepted that AGI’s source code and related technical know-how were confidential and commercially valuable. It also found that former AGI employees were subject to contractual confidentiality obligations and understood the confidential nature of the information.

While OPI denied using the source code and adduced affidavit evidence explaining how its products were developed, the Court identified gaps and unanswered questions in the evidence. At the interlocutory stage, resolving those factual disputes would have required credibility findings more appropriate for trial.

Accordingly, the Court concluded that AGI’s claim was arguable and not frivolous or vexatious. The first branch of the RJR-MacDonald test was satisfied.

Irreparable Harm: Where the Application Failed

The injunction application ultimately failed on the second branch of the test: irreparable harm.

The Court reaffirmed that irreparable harm refers to harm that cannot be adequately compensated in damages or cannot be fairly quantified after trial. The standard is high and requires clear and compelling evidence, not conjecture or assumption.

AGI argued that misuse of its source code gave OPI an unfair competitive advantage that could not be measured in monetary terms. It pointed to potential loss of market share, damage to goodwill, and the “stickiness” of grain management systems, where customers are unlikely to switch back once they adopt a competitor’s platform.

However, the Court found the evidentiary record insufficient. AGI did not provide concrete data showing:

• Its actual market share in Canada;
• How much revenue BinManager generated in the Canadian market;
• Whether customers had already switched to OPI products; or
• How the launch of EPIQ had affected subscription renewals or sales trends.

The Court was not prepared to infer irreparable harm simply because confidential information was alleged to be at risk. Alberta jurisprudence, the Court held, requires more than generalized assertions of competitive disadvantage.

In the absence of market evidence, financial data, or customer-specific impacts, AGI failed to meet the irreparable harm threshold.

Balance of Convenience Favoured the Defendant

Although unnecessary to decide given the failure on irreparable harm, the Court also addressed the balance of convenience. The evidence showed that OPI had an established presence in Canada and that its grain management products represented a substantial portion of its Canadian revenue. Granting the injunction would have effectively shut down core business lines before any findings of liability.

By contrast, AGI had not demonstrated with precision how its Canadian business would be harmed in the absence of the injunction. Given the asymmetry in proven impact, the Court found that the balance of convenience favoured allowing OPI to continue operating pending trial.

The Preservation Order: A Collateral Attack on the Stay

AGI also sought extensive forensic and preservation orders requiring access to OPI’s digital systems. The Court rejected this request outright.

The Alberta action had been stayed to avoid duplicative proceedings with the more advanced U.S. litigation. The only exception carved out by the earlier stay order was for an interlocutory injunction application, not discovery or preservation relief.

Granting the preservation order would have undermined the stay, increased the risk of inconsistent findings, and duplicated discovery already underway in the U.S. actions. The Court held that AGI’s proper avenue for preservation relief was in the jurisdictions where the substantive litigation was actively proceeding. As a result, the preservation application was dismissed as procedurally improper.

Why Alberta Courts Grant Interlocutory Injunctions Sparingly in Commercial Disputes

AGI SureTrack, LLC v. OPISystems Inc. serves as a cautionary reminder that interlocutory injunctions remain an exceptional remedy in Alberta. While courts will protect confidential information where warranted, applicants must meet a demanding evidentiary threshold, particularly when seeking to restrain a competitor’s business activities.

In complex commercial disputes involving technology and intellectual property, strategic decisions about where and how to seek interim relief can be outcome-determinative. Careful alignment between legal theory and admissible evidence remains essential.

DBB Law: Providing Modern Commercial Litigation Services in Calgary

Protecting confidential information requires more than urgency; it requires evidence. If your business is facing a dispute involving trade secrets, departing employees, or competitive misuse of proprietary information, the experienced commercial litigators at DBB Law can help you assess your options and build a strategy grounded in robust evidence. Conveniently located in downtown Calgary, we proudly serve businesses and institutions across Alberta. To schedule a consultation, please call 403-265-7777 or reach out online.