Abstract
The transition of an employee from one company to another is common. But what happens if the employee brings with them key skills, internal procedures, or even confidential files and documents? When does it constitute unfair competition? And how far does the protection of the former employer extend? The Court of Milan, in a December 2024 ruling, answered these questions in a case that deserves attention.
Employee migration and “confidential” information
The Court of Milan, in a December 2024 ruling, dealt with an interesting case. The context: a public tender issued by ARERA (the Regulatory Authority for Energy, Networks and Environment) for the management of its IT systems—a contract worth over 22 million euros. The outgoing company, after years of managing and developing complex systems, algorithms, and portals, lost the contract to a new operator.
During the transition, five strategic employees moved from the old to the new company. Although the move was formally lawful, the former provider accused the competitor of poaching them to acquire internally developed know-how. Supporting this claim, the company reported that corporate files had been copied shortly before resignations—documents, configurations, and technical notes. Hence the request for urgent judicial intervention.
Proving the theft of confidential information
In cases of suspected unfair competition, a company can request a powerful urgent measure from the court: judicial description. Provided by the Italian Industrial Property Code, this allows—upon judge’s authorization—access to the competitor’s computers, servers, or documents to perform a forensic copy and technical analysis of data.
This is not a seizure but a non-invasive, highly effective measure to quickly document the unlawful appropriation of information. However, to be granted, strict conditions must be met: most importantly, actual ownership of an industrial right. Simply stating that data is “confidential” is not enough.
The requesting party must provide the judge with serious, even preliminary, indications that legally protected information is involved, such as trade secrets or commercial know-how. Only in the presence of such elements will the court authorize access and evidence collection. But what exactly qualifies as “protected know-how”? And who is the true owner of the information?
Who owns the information?
In the Milan case, the claimant alleged that former employees had taken confidential information related to ARERA projects. But a contractual detail dramatically changed the outcome.
The agreement between ARERA and the contractor clearly stated that all materials produced—software, technical documentation, and know-how—were the property of the public authority. In other words, the claimant did not own the information it claimed was stolen. Since ownership is essential to request judicial description, the court ruled that the former provider had no rights violated.
Furthermore, the omission of this contractual clause in the application was deemed serious. The company’s conduct appeared evasive and non-transparent, undermining the credibility of its claim and negatively impacting the ruling. A costly mistake that serves as an important lesson for companies seeking to pursue legal protection of trade secrets.
Abuse of process and unfair competition
The Court of Milan reached a clear conclusion: there was no unfair competition or theft of trade secrets. The transfer of five workers—although highly skilled—did not amount to a structured attack or significant harm to the former employer. The judge emphasized that worker mobility is a fundamental right, protected even at the EU level, and that employee transitions among competitors are part of normal market dynamics.
As for the files found on the former employees’ devices, none qualified as “trade secrets”. The ARERA-related documents were owned by ARERA, per contract, while other materials (internal presentations, configuration files, manuals) were generic, often outdated, and lacked the secrecy and economic value required by law to justify legal protection.
What was particularly problematic was the way the claimant handled the case. It failed to mention—either in the application or the initial filings—the existence of the contractual clause assigning ownership of the software and documents to ARERA. This omission led the judge to suspect an abuse of the legal process. The application had been filed without properly presenting the contractual framework.
For this reason, the court did more than reject the request. It found abuse of the precautionary procedure, applying Article 96, paragraph 3 of the Italian Civil Procedure Code—a rule that allows the judge to order the losing party to pay an equitable sum to the opposing parties, even in the absence of proven damage. In this case, the company was ordered to pay €12,000 to each opposing party, plus €5,000 to the Penalty Fund. A significant penalty meant to reinforce the principle that judicial tools must be used fairly—not as an improper pressure tactic.
How to seriously protect confidential business information
In the tech sector, where skills are highly specialized and developed through direct experience, workers are free to change companies. The law does not allow a company to retain an employee simply because they were involved in strategic projects or received specialized training. If a company truly wants to limit the use of acquired knowledge post-termination, it must act preventively: through valid non-compete agreements, clear confidentiality policies, and effective IT security protocols.
Protection of corporate information is not automatic. While employment lasts, the employee is bound by a duty of loyalty. But after termination, without a specific agreement, the company has very limited tools to restrict their activities. Labeling a file as “confidential” or treating an internal procedure as sensitive is not enough. To qualify for protection as a trade secret, concrete security measures must be adopted.
This legal case illustrates how critical it is to prepare suitable contracts and protective measures—avoiding the confusion between a legitimate desire for protection and the emotional urge to retaliate against a competitor. Precautionary legal actions are powerful but delicate tools, to be used only when supported by solid evidence. A poorly prepared filing can backfire, exposing the company to reputational damage and court-imposed penalties.
© Canella Camaiora S.t.A. S.r.l. - All rights reserved.
Publication date: 23 July 2025
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Margherita Manca
Avvocato presso lo Studio Legale Canella Camaiora, iscritta all’Ordine degli Avvocati di Milano, si occupa di diritto industriale.