Protection of Know-How and Misappropriation of Information by Former Employees: a Recent Decision of the Venice Court
With the recent (non-final) judgment of 3 January 2026 (no. 73/2026), the Venice Court once again addressed the issue of the protectability of know-how and the misappropriation of information by former employees.
The case originated from interim proceedings brought by a company active since 1995 in the production and marketing of chemical products for the furniture and packaging sectors against a competing company and several former employees, now employed by the latter. According to the claimant’s allegations, these parties had engaged in conduct involving the misappropriation of confidential commercial information and acts of unfair competition to its detriment.
In its application, the claimant stated that between 2019 and 2020, within a short period of time, four employees resigned and were subsequently hired by the respondent company, which at the time was exclusively engaged in the wholesale distribution of packaging materials and which, at the end of 2019, opened a branch very close to the claimant’s historic headquarters.
The claimant obtained evidence (both investigative and tecnichal) showing that the employees had allegedly engaged in various unlawful activities, including the misappropriation of confidential information (such as customer and supplier lists) securely stored in the company’s management system, and subsequently used such information in the course of their new employment for the benefit of the respondent.
Following an ex parte order issued by the Court, a search order was executed at the respondent’s premises, during which a large amount of material was acquired. In light of the findings, the Venice Court confirmed the search order and issued an injunction against all respondents except for one former employee (the injunction was later extended to that individual on appeal).
The claimant then initiated proceedings on the merits seeking a definitive finding of violations of know-how protection rules, as well as unfair competition and employee poaching, and compensation for damages, alleging that the search proceedings had revealed that:
the employees’ resignations within a short period of time and their subsequent employment with the defendant had been planned and coordinated;
some employees, while still employed by the claimant, had begun performing work activities in the interest and on behalf of the defendant, also through employees who had already transferred, obtaining confidential data stored in the claimant’s management system or taken from company mobile phones in use (customer and supplier contact details, pricing conditions applied to customers, types and quantities of products purchased by certain customers, product codes, chemical compositions of products, etc.);
the former employees had misappropriated paper printouts containing month-by-month lists of customer purchases and the conditions applied to each of them. The defendants used such documents (as well as copies of orders) to extract data of interest in order to formulate offers to customers diverted from the claimant and to place orders with suppliers;
the former employees had carried out systematic contact activity with the claimant’s customers and suppliers, in some cases even persuading customers to postpone their orders.
The claimant pointed out that this activity had resulted in a significant diversion of customers and the establishment of new relationships with long-standing suppliers who previously had no dealings with the defendant. The latter had allegedly expanded both its territorial scope of operations and its customer base, as well as the range of products marketed (previously limited to the packaging sector), essentially including all product categories handled by the claimant (over 15,000 products).
The former employees appeared in court contesting the plainiff’s claims and denying that their move to the defendant company had been planned or coordinated. They claimed to have approached the defendant spontaneously due to alleged personal dissatisfaction with their working environment. They further argued that, in any event, this circumstance was irrelevant given the marginal nature of the tasks they performed for the claimant. On the merits, they denied both the misappropriation of confidential information and the commission of acts of unfair competition.
The defendant company raised defenses largely similar to those of the former employees, reiterating that the employees lacked any particular specialization and that there was no employee poaching, not least because the contested conduct involved only four employees out of a much larger workforce.
With regard to damages, the defendant observed that the claimant’s turnover had been declining for at least three years and that no causal link had been demonstrated between the employees’ resignations—who had in any case been replaced—and the reduction in revenues. It also emphasized that the marketed products were widely distributed by various operators and that, in the absence of exclusivity agreements, customer acquisition depended on the lowest price offered at the time of the request. Furthermore, it argued that customer names were easily obtainable from publicly accessible databases by those already operating in the market. By way of counterclaim, the defendant sought damages for loss of profits due to the allegedly unjustified injunction and for actual damages consisting of personnel costs incurred in preparing the documentation for the defense in the proceedings.
In the non-final judgment under discussion, the Venice Court upheld the claimant’s claims concerning the use of trade secrets by the defendants, while with respect to employee poaching it declared the dispute partially moot and, in any event, dismissed the claim as unfounded. The Court reserved for further evidentiary proceedings the claims relating to customer diversion and damages.
Trade Secrets
With specific reference to trade secrets, the Court found that the requirements set out in Article 98 of the Italian Industrial Property Code were met. The claimant had proven that it possessed a structured and organized database with individual customer profiling, containing confidential and difficult-to-access information, such as customer identification data, regularly supplied products, agreed contractual conditions, quantities sold for each product, applied discounts, orders placed, dates of modification of contractual terms, supplier data, and accounting movements of customers and suppliers.
As to secrecy, the Court stated that it need not be absolute, as individual items of information may be obtainable separately. What matters for the existence of this requirement is the protection afforded to the organized set of information resulting from the collection and aggregation activities carried out by the holder.
The Court also acknowledged the economic value of the confidential information, noting that the immediate availability of data contained in the management system and related printouts—not only customer names and identification details, but also orders, product types with corresponding codes, prices, customer data, and contact persons—gave the defendant company a clear competitive advantage.
Finally, with regard to protection measures, the Court held that it is sufficient for such measures to be reasonably designed, in accordance with a proportionality criterion, to maintain the secrecy of the information or to prevent its “leakage,” and to be unequivocally incompatible with any intention of the entrepreneur to make the information publicly accessible. Such measures must be assessed in light of differing needs, depending on whether the aim is to prevent third-party intrusion or to ensure secrecy vis-à-vis employees who, due to their roles, may need access to the information. In the present case, the following measures were deemed adequate: (i) the management software was (and remains) password-protected, and access was (and remains) limited to employees whose duties require knowledge of customer and supplier names, products sold or purchased, and the applicable commercial conditions.
The Court further stated that the misappropriation of confidential information formed part of a broader framework of anti-competitive conduct aimed at acquiring the claimant’s customers and suppliers and constituted one of its main, though not sole, components.
In light of the above, the Venice Court confirmed the search order issued ex parte and enjoined all defendants from using the confidential information, including commercial conditions applied to customers, all information resulting from the management system screenshots filed in the proceedings, as well as information relating to the products used, corresponding product codes, and the composition and characteristics of branded products, imposing a penalty of €1,000 for each violation.
Employee Poaching
The Court did not, however, find the existence of employee poaching, as the proceedings revealed no evidence supporting the non-fungibility of roles or the exclusivity of the duties performed by the employees who joined the defendant, nor any initiative by the latter aimed at inducing them to change employment.
According to the Court, the animus nocendi—namely, that the defendant hired the employees with the specific intent of unlawfully acquiring the claimant’s confidential information—was not proven. Rather, the unlawful acquisition was considered to have been merely “occasioned” by the employees’ transition from one company to the other.
It therefore remains to await the final outcome of the dispute.