Legal Updates

Exploiting a customer list which entails an added-value conferring a competitive advantage will be deemed misappropriation of a trade secret

February 4, 2022

A water dispensers’ businessowner used Strauss' customer list, which included the price Strauss offered to its customers, in order to offer them more attractive offers than those offered by Strauss.

The Court held that the costumer list is deemed a trade secret, and that the business owner's actions amount to misappropriation of a trade secret. The law defines a trade secret as business information, of any kind, which is not in the public domain and cannot be legally found by others, which confidentiality gives its owner a business advantage over its competitors, provided its owner takes reasonable measures to maintain its confidentiality. However, the definition may vary from case to case. A customer list may be considered a trade secret insofar as it has an "added value" other than the mere names therein, and that a special effort is required to formulate it, so that there is an advantage in its exploitation. The right to confidentiality in relation to trade secrets may be breached by fuor alternative levels: Unauthorized taking of the information; Improper transfer of information to a third party; Use of a trade secret - exploitation of information; Unauthorized receipt of the information. Here, the customer list entailed information beyond customers’ names and phone numbers, such as the price they undertook to pay Strauss, in a way that gives the list the status of a "trade secret", and because the businessowner exploited the information to offer potential customers more attractive quotes, his actions amount to misappropriation of a trade secret.