Commercial Torts Law: the sections this site discusses

Today false description and misappropriation of trade secrets happen mainly online, so legal support for a digital business also involves this Law.

What the law provides

The Commercial Torts Law defines several torts whose purpose is to protect fair business competition. Section 2 (“False description”) prohibits a dealer from publishing information that it knows, or should have known, is untrue about a business, profession, property or service, its own or another dealer’s. Section 5, titled “Definitions”, defines, among other things, a “trade secret”: business information of any kind that is not public knowledge and cannot easily be discovered lawfully by others, whose secrecy gives its owner a business advantage over its competitors, provided that the owner takes reasonable measures to keep it secret. Section 6 sets out what misappropriation of a trade secret is: taking the secret without its owner’s consent by improper means, using it in breach of a contractual obligation or a duty of trust, or receiving or using it when it is known, or obvious on its face, that it was passed on unlawfully.

Section 13 of the Law, titled “Compensation without proof of damage”, allows the court to award the injured party, for each tort, compensation of up to NIS 100,000 (the amount stated in the Law; the Minister of Justice may change it by order, section 13(c) of the Commercial Torts Law) without the injured party having to prove actual financial loss. This mechanism is similar to the one in defamation law and copyright law, and is meant for cases in which the exact financial loss is hard to prove. Under section 12, this remedy does not apply to false description (section 2) or to unfair interference (section 3). In addition to compensation, the injured party can apply for an injunction prohibiting the dealer from continuing to use the information or to present the false description.

A numerical example

A former employee of a technology plant took to a competing company a customer list and detailed pricing that were marked “confidential” and kept in a password-protected system. The competing company began approaching the customers on the same pricing terms. The former employer can sue for misappropriation of a trade secret and ask both for an injunction prohibiting the use of the list and for compensation without proof of damage, without having to prove how many customers actually moved and how much financial loss the move actually caused.

For a practical guide to protecting trade secrets and to non-disclosure agreements, see Trade secrets: protection and enforcement in Israel and Non-disclosure agreements (NDA): a comprehensive guide, and the page Commercial contracts. For trademarks and copyright: Trademarks and copyright: the full guide.

What you need to prove in a claim for misappropriation of a trade secret

1. That the information is a “trade secret”: every element of the definition in section 5: business information that is not public knowledge, that cannot easily be discovered lawfully, whose secrecy gives a business advantage, and whose owner takes reasonable measures to keep it secret.
2. The act of misappropriation: one of the three alternatives in section 6(b). Discovering the secret by reverse engineering is not, in itself, an improper means (section 6(c)).
3. Use: no direct evidence is needed. The defendant is presumed to have used the secret if the secret came to their knowledge or they had access to it, and the information they use is substantially similar to it (section 10). Using a secret in which changes were made also counts as use, as long as a substantial similarity remains (section 9).
4. Answering the defenses: knowledge that has become part of an employee’s general professional skills, use justified by public policy (section 7), and acquisition in good faith and for consideration (section 8).
5. The court: a claim between an employee and an employer for misappropriation of a trade secret that arises from the employment relationship falls within the exclusive jurisdiction of the Regional Labor Court (section 22).

The sections the site discusses

This page brings together 3 sections of the Commercial Torts Law that are discussed in 4 guides on this site. The title of each section is the marginal note of the consolidated version of the Law (unofficial translation), not a heading we wrote. The last column links to the guides on this site that discuss that section.

The original text of the law

• Commercial Torts Law, 5759-1999: text of the Law
• Commercial Torts Law: consolidated version on Nevo (Israeli legal database)

FAQ

What counts as a trade secret under the Commercial Torts Law?
Under section 5 of the Law: business information of any kind that is not public knowledge and cannot easily be discovered lawfully by others, whose secrecy gives its owner a business advantage over its competitors, provided that the owner takes reasonable measures to keep it secret.

What do you do when a former employee takes confidential business information to a competing employer?
You can sue for misappropriation of a trade secret, ask for an injunction prohibiting the use of the information, and claim compensation, including compensation without proof of damage under section 13 of the Law, without proving an exact financial loss.

What is the difference between false description and misappropriation of a trade secret?
False description (section 2) is publishing information that the dealer knows, or should have known, is untrue about a business, property or service, its own or another dealer’s. Misappropriation of a trade secret (section 6) is taking another person’s trade secret without their consent by improper means, using it in breach of a contractual obligation or a duty of trust, or receiving or using it when it is known, or obvious on its face, that it was passed on unlawfully.

This page collects the references to legislation on the site. The section headings are the marginal notes as worded in the consolidated text of the law, and are not our interpretation. The binding text is the one published in Sefer HaHukim (the official gazette of statutes). The content here is general information and is not legal advice. Translated: 12 November 2026 · Hebrew version updated: 13 October 2026.