Implications Of The Certicom Decision For Confidentiality Agreements

In a ruling released on January 19, 2009, the Ontario Superior Court of Justice effectively ruled that Research in Motion Limited ("RIM") could not proceed with its hostile take-over bid for Certicom Corp. ("Certicom") because the bid contravened confidentiality agreements between the companies.

The decision is notable because in the two effective confidentiality agreements between the companies (i) the "standstill" provision (generally speaking, a provision that prevents the party receiving confidential information from making a hostile bid or similar unsolicited initiative for the ownership or control of the disclosing party) in the earlier confidentiality agreement had lapsed, and (ii) the more recent confidentiality agreement did not have a "standstill" provision at all. The central issue in the case, therefore, was whether, notwithstanding the expiry of the standstill provision, RIM was still precluded from using confidential information it had obtained from