CIVIL PROCEDURE - Security for costs - Where action frivolous or vexatious

Law360 Canada ( December 21, 2023, 6:51 AM EST) -- Motion by Plaintiff for an Interlocutory Injunction and motion by Defendants for security for costs. The Plaintiff was incorporated to develop and commercialize one-time-pad (“OTP”) encryption technology, solutions and applications to protect digital assets (“Vaultose Solution”). The Vaultose Solution was being developed for use in cryptocurrency products. The Consultant Defendants worked on the initial phase of the Vaultose Solution. They had almost (80-90 per cent) completed the initial prototypes for a cryptocurrency wallet and smart order router. However, the initial “minimal viable product” had not reached the point of integration with OTP encryption technologies on the platform when the work on the Vaultose Solution project was stopped. The Consultant Defendants led a new project for the QDS Defendants to build a QDS Platform to be “quantum secured” using OTP encryption technologies. The Consultant Defendants stated that they built the QDS Platform without the use of any of the technology that they had access to while they worked with the Plaintiff. However, the Plaintiff contended that the Consultant Defendants continued to have control over and access to confidential and proprietary Vaultose Confidential Information. The Plaintiff pointed to the similarities in the description of the Vaultose Solution and the QDS Platform. The Defendants denied that they had used any Confidential Information that they acquired from the Plaintiff in their development of the QDS Platform. In contrast, the Consultant Defendants moved for their security for costs and argued that they had prima facie entitlement to it....
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