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Commercial Torts Law, 5759-1999

חוק עוולות מסחריות, תשנ"ט-1999

Published: 1999-04-29Consolidated Hebrew text as of 2026-04-02 · Last amended 2026-03-31✓ Amendment status checked against the Knesset legislation record on 2026-09-17
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Chapter I: Unfair Trade Practices

Passing Off§

1.
(a)A trader shall not cause an asset that the trader sells or a service that the trader provides to be mistakenly regarded as the asset or service of another trader or as an asset or service that has a connection to another trader.
(b)A trader's use of the trader's own name in good faith for the purpose of selling an asset or providing a service shall not, in itself, be regarded as passing off.

False Description§

2.
(a)A trader shall not publish, and shall not cause the publication of, information that the trader knows or ought to have known to be incorrect, concerning a business, profession, asset or service, whether the trader's own or that of another trader (hereinafter – false description).
(b)A person who distributes the publication of another trader or on that trader's behalf, where the publication contains a false description, or a person who actually decided on the publication of a false description as aforesaid, shall not be liable under this Section unless that person knew that the description was false, or unless the description is false on its face.

Unfair Interference§

3.

A trader shall not, in an unfair manner, prevent or impede access by customers, employees or agents to the business, asset or service of another trader.

The Tortfeasor and the Aggrieved Party§

4.

The duties in this Chapter shall apply to a trader who performed the act prohibited under this Chapter in the course of, or in connection with, that trader's business, vis-à-vis another trader who was harmed or sustained damage from the breach of the duty in the course of, or in connection with, that other trader's business.

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Chapter II: Misappropriation of a Trade Secret

Definitions§

5.

In this Chapter –

"owner" – includes a person who lawfully controls a trade secret;

"trade secret", "secret" – business information of any kind that is not in the public domain and cannot be lawfully discovered by others with ease, whose confidentiality confers on its owner a business advantage over competitors, provided that the owner takes reasonable measures to maintain its confidentiality;

"use" – includes transfer to another.

Misappropriation of a Trade Secret§

6.
(a)A person shall not misappropriate a trade secret of another.
(b)Misappropriation of a trade secret is any one of the following:
(1)taking a trade secret without the consent of its owner by wrongful means, or use of the secret by the person who took it; for this purpose it is immaterial whether the secret was taken from its owner or from another person in whose knowledge the trade secret is held;
(2)use of a trade secret without the consent of its owner where the use is in breach of a contractual obligation or a duty of trust imposed on the user towards the owner of the secret;
(3)receiving a trade secret or using it without the consent of its owner, where the recipient or user knows, or it is apparent on the face of the matter, at the time of receipt or use, that the secret was transferred to that person in a manner prohibited under paragraphs (1) or (2), or that the secret was transferred to any other person in a prohibited manner as aforesaid before it reached that person.
(c)Disclosure of a trade secret by means of reverse engineering shall not, in itself, be regarded as wrongful means as referred to in subsection (b)(1); for the purpose of this subsection, "reverse engineering" – the disassembly or analysis of a product or process with the aim of deciphering a trade secret, in reverse sequence.

Limitations on Liability§

7.
(a)A person shall not be liable for misappropriation of a trade secret if any one of the following conditions is met:
(1)the knowledge embodied in the trade secret came to that person in the course of employment with the owner of the trade secret and that knowledge has become part of that person's general professional skills;
(2)the use of the trade secret is justified on grounds of public policy.
(b)Where a person made use of a trade secret as referred to in subsection (a)(2) and thereby obtained a benefit, the court may, if it sees fit in the circumstances of the matter, order that person to make restitution of the benefit, in whole or in part, to the owner of the secret.

Acquisition in Good Faith and for Consideration§

8.
(a)A person is not liable under section 6(b)(3) in respect of use made of a trade secret if that person acquired and received the trade secret in good faith and for consideration, unless the court is of the view that, in order to do justice between the parties, liability for misappropriation of the trade secret should be imposed on that person.
(b)Where the court has imposed liability as referred to in subsection (a), it may exempt the person liable for the misappropriation of the trade secret from the remedies to which the owner of the secret is entitled, in whole or in part.

Substantial Similarity§

9.

Use of a trade secret in which modifications have been made shall also be regarded as use of a trade secret, provided that there is substantial similarity between the trade secret and the information in which the use is made.

Presumption of Use§

10.

The defendant is presumed to have used the trade secret owned by the plaintiff if both of the following conditions are met:

(1)the trade secret came to the knowledge of the defendant or the defendant had access to it;
(2)the information used by the defendant is substantially similar to the information that is the subject of the trade secret.

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Chapter III: Torts and Remedies

Tort§

11.

A breach of any of the provisions of Chapters I and II is a tort, and the Civil Wrongs Ordinance [New Version] (hereinafter – the Civil Wrongs Ordinance) shall apply thereto, subject to the provisions of this Law.

Application of Remedies§

12.

The remedies set out in sections 13 to 21 shall not apply to torts under sections 2 and 3.

Compensation without Proof of Damage§

13.
(a)The court may, upon the application of the plaintiff, award the plaintiff, for each tort, compensation without proof of damage, in an amount not exceeding NIS 100,000.
(b)For the purpose of this Section, torts committed as part of a single course of acts shall be regarded as a single tort.
(c)The Minister of Justice may, with the approval of the Constitution, Law and Justice Committee of the Knesset, vary by Order the amount referred to in subsection (a).

Review of an Injunction§

14.

Where an injunction has been granted in favour of the owner of a trade secret, the opposing party is entitled to apply, at any time, for a review of the injunction on the ground that the trade secret has been published; if the court finds that the applicant derived an unfair advantage from holding the secret prior to its publication, the court may, for so long as that advantage persists, keep the injunction in force.

Rendering of Accounts§

15.

The court may order the defendant, in the manner prescribed by Regulations, to render an account to the plaintiff concerning the particulars of the tort.

Receiver§

16.
(a)Where the court is satisfied, by affidavit or other evidence, that there is a real apprehension that a tort will be committed, the court may, by order, appoint a receiver and empower the receiver to enter premises held by the defendant or by a person other than the defendant (hereinafter – third party), for the purpose of searching for and seizing assets that were produced in the course of committing the tort or that were used in its commission, or for the purpose of seizing evidence that there is a reasonable apprehension may be concealed; in a search and seizure under this Chapter of a computer, computer material or output, as defined in the Computers Law, 5755-1995, the provisions of sections 23a and 32(b) of the Criminal Procedure Ordinance (Arrest and Search) [New Version], 5729-1969, shall apply with the necessary modifications.
(b)A receiver is empowered to use reasonable force for the purpose of executing the order, provided that a police officer accompanies the receiver; the court may direct the Israel Police to assist the receiver in performing the receiver's functions under the order.
(c)The entry, search and seizure shall be carried out by the receiver in the presence of two witnesses; the receiver shall submit to the court, within seven days from the date of execution, a report on the search and seizure.

Ex Parte Order§

17.
(a)Where an application has been made for an order appointing a receiver and the court is satisfied, by affidavit or other evidence, that there is a reasonable apprehension that a delay until a hearing in the presence of both parties may cause serious damage to the applicant or may result in the concealment of assets, the court may grant the order even ex parte.
(b)Where an order has been granted ex parte, a hearing in the presence of both parties shall be held as soon as possible and no later than 7 days from the date of the grant of the order, unless the court has set a later date for special reasons that shall be recorded.
(c)An order under this Section may be granted even before the filing of the action; if the action has not been filed within 7 days from the date of its grant, the order shall lapse, unless the court has set a later date for special reasons that shall be recorded.

Undertakings§

18.

The court shall not grant a temporary order under this Chapter except subject to the furnishing of sufficient security to its satisfaction, in favour of the person against whom the order is granted under sections 16 or 17, for the purpose of compensation for any damage caused to that person as a result of the granting of the order, should the action be dismissed or should the order lapse for another reason, and also subject to the furnishing of a bond as referred to in section 19.

Bond§

19.
(a)A bond as referred to in section 18 shall consist of the deposit of an amount of not less than NIS 1,000 and not more than NIS 25,000, as the court shall determine; the bond amount shall be deposited in cash or by bank guarantee; the court may, if satisfied that special reasons exist for doing so, make the grant of the order conditional upon the furnishing of a different bond.
(b)On the application of the defendant, the court may, if satisfied in the course of the legal proceedings that it is justified, increase the bond amount beyond the amount referred to in subsection (a).
(c)Where the action is dismissed or the temporary order lapses, the court hearing the action may order the forfeiture of the bond, in whole or in part, in favour of the person against whom an order was granted under sections 16 or 17, if satisfied that the application for the order was not reasonable in the circumstances of the matter; forfeiture of the bond is not conditional upon the actual causing of damage to the person against whom the order was granted.
(d)Forfeiture of the bond does not derogate from the right of the person in whose favour the bond is forfeited to recover in respect of that person's damages, by means of the security prescribed under section 18 or in accordance with any law, by way of filing an action.

Rights of a Third Party§

20.
(a)In granting an order under sections 16 or 17 authorising entry into premises held by a third party, the court shall take into account, inter alia, the possibility –
(1)that rights of the third party exist in the assets or evidence in respect of which the order is sought, and the nature of such rights;
(2)that the third party is a party to the tort.
(b)Where the assets or evidence in respect of which an order is sought under sections 16 or 17 are in the possession of a third party, the court shall notify the third party of the right to join the proceedings within the time that the court shall set.
(c)A third party who asserts rights in assets or evidence seized under this Chapter may join the proceedings within 14 days from the day on which the third party became aware of their seizure.
(d)Where it becomes apparent to the court in the course of a hearing that a third party may have rights in assets or evidence seized under this Chapter, the court shall notify the third party of the right to join as a party to the proceedings within the time that the court shall set; joinder may take place at any stage of the proceedings.
(e)Where a third party has joined the proceedings, the court shall hold a hearing in the presence of the third party as soon as possible and no later than 14 days from the date of receipt of the third party's application to join.

Destruction of Assets§

21.

The court may order, upon conclusion of the hearing of an action, one of the following:

(1)the destruction of assets that were produced in the course of committing a tort or that were used for its commission (in this Section – the assets);
(2)if the plaintiff so requests – the transfer of ownership of the assets to the plaintiff, in consideration of payment of the value of the assets as that value would have been but for the commission of the tort;
(3)the taking of any other action in respect of the assets.

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Chapter IV: Miscellaneous

Jurisdiction of the Labour Court§

22.
(a)A regional Labour Court shall have exclusive jurisdiction to hear –
(1)an action between an employee and an employer or the employer's successor, the cause of action of which is a breach of a provision of Chapter II and which arises from an employer-employee relationship;
(2)an action the cause of action of which is a breach of a provision of Chapter II, arising from a contract for the creation of an employer-employee relationship, before such a relationship was created or after such a relationship has ended.
(b)In actions that a Labour Court hears under this Section, a judge sitting alone shall have the power to grant a temporary injunction as well as remedies under sections 15 to 20.

Non-Disclosure of Trade Secret§

23.
(a)The court may, on its own initiative or on application, make an order to ensure that a trade secret of a party or of another person that was disclosed in legal proceedings shall not be published.
(b)The court may, on the application of a person, make an order in legal proceedings regarding the manner of adducing evidence that contains a trade secret.
(c)In legal proceedings in a civil matter, the court may, on the application of a person, make an order regarding the non-disclosure of evidence that contains a trade secret, provided that it is satisfied that the interest in the non-disclosure of the evidence outweighs the need to disclose the evidence for the purpose of doing justice, and that the making of an order under subsections (a) and (b) is insufficient to protect the trade secret.
(d)In this Section, "court" includes a tribunal, authority, body or person having judicial or quasi-judicial powers under any law.

Savings Provisions§

24.

Nothing in the provisions of this Law shall derogate from the provisions of the Economic Competition Law, 5748-1988, or from the provisions of any other law.

Implementation and Regulations§

25.

The Minister of Justice is charged with the implementation of this Law and may, with the approval of the Constitution, Law and Justice Committee of the Knesset, make Regulations for its implementation, and in particular regarding the regulation of the actions of a receiver under this Law, including –

(1)provisions regarding the submission of a report under section 15;
(2)the manner of filing an application for a receivership order;
(3)provisions regarding the joinder of a third party;
(4)rules for conducting a search and seizure of assets;
(5)the manner of registration of seized assets;
(6)the manner of handling seized assets and the place of their keeping;
(7)rules for the execution of a court order regarding the destruction of assets;
(8)rules for the maintenance of confidentiality with respect to the findings of a search.

Amendment of Courts Law – No. 26§

26.

In the Courts Law [Consolidated Version], 5744-1984, in section 68(b), after paragraph (7) the following shall be inserted:

"(8) for the purpose of protecting a trade secret."

Amendment of Consumer Protection Law – No. 8§

27.

In the Consumer Protection Law, 5741-1981 –

(1)in section 2(a), after paragraph (19) the following shall be inserted:

"(20) the fact that the origin of the asset being sold is in bankruptcy, in receivership or in the winding up of a company.";

(2)in section 31, after subsection (a) the following shall be inserted:

"(a1) The right to remedies for a tort as aforesaid is vested in a consumer who was harmed by the tort, and also in a trader who was harmed, in the course of the trader's business, by misrepresentation as referred to in section 2.

(a2)Chapter VI-A shall not apply to a trader who was harmed by a tort as aforesaid in the course of the trader's business."

Amendment of Civil Wrongs Ordinance – No. 8§

28.

In the Civil Wrongs Ordinance [New Version], section 59 – is repealed.

Commencement§

29.

This Law shall commence six months from the date of its publication.

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