A developer of a diamond evaluation software entered into a marketing agreement with a seller of diamond measurement systems. The agreement stipulated that the marketer may not develop or sell competing software during the period of the agreement and 18 months thereafter. At some stage, the marketer informed the developer of termination of the agreement and immediately began marketing a competing product.
The Court held that in the event of a breach of a non-competition obligation, the injured party is entitled not only to compensation for the loss caused to it but also to compensation in the amount of the profit derived by the infringing party as a result of breach of the agreement. When the exact damage cannot be proven, the Court may make an estimate of the damage caused, and in this case the Court estimated the compensation at ILS 180,000.