All confidential business information that provides a company with a competitive edge may be considered as a trade secret. Trade secrets may include, among others, sales methods, distribution methods, consumer profiles, marketing strategies, lists of suppliers and clients and manufacturing processes. The unauthorised use of such information by persons other than the authorised holder is considered to be industrial espionage.

Industrial espionage is any act done by an employee to the detriment of his employer by means of which act his employer's competitors gain any undue financial advantage. The most classical of examples occurs when, for instance, an employee forwards to his employer's competitors details in connection with his employer's tender application. Another unfortunately regularly occurring incident is the unauthorised use of the employer's computer system by an employee, whereby access is gained to company confidential information and this information is passed on to a competitor.

One business may also pay an employee of another business to provide it with secrets of the employee's business. Trade secrets may also find their way into the open market through disloyal employees or through various other means.

Many see industrial espionage as a clean and faceless crime because no individual is harmed. Confidential information is also freely available to just about every employee. Even if you work at a low level there is always a chance of accessing information and selling them to the highest bidder.

Industrial espionage has serious financial consequences that can easily jeopardise the financial wellbeing of the employer which, in turn, can have serious negative effects on all other employees. All businesses are set up with a view to making a profit. Should, as a result of industrial espionage, an employer suffer severe financial profits, laying off of employees is not an option but a reality.

There have been a number of high-profile publicised cases abroad, but it would be naïve to think that industrial espionage does not happen in Malta as well.

Take the following case. A former employee resigned from his position as human resources manager of a company. Prior to this employee's actual departure from the organisation in question, it came to the attention of the general managers that the employee in question had been offered and accepted employment with a competitor organisation. The employee was confronted with this information and, in the end, admitted that he was leaving to join this competitor.

In order to reduce any risks of information leaking, he was asked to clear his desk and leave immediately and at this point management realised that he had confidential documents in his brief case. It transpired that the employee had accessed without authority confidential company information on the company's IT network, which did not fall under his competence.

Following advice from the group's law firm, the incident was reported to the police who carried out a house search on the basis of a search warrant duly issued by the Court of Magistrates during which it was discovered that he had confidential company information in his possession.

The organisation in question initiated legal proceedings to ensure that the employee pays the penalties that could be levied against him according to law on the basis of a breach of contract. The employee complied and within two days paid the sum of €7,788 to the company: €5,459 as stipulated by Maltese law for termination of employment during the course of a definite contract and €2,329 for breaching confidentiality as per his contractual obligations.

The group's law firm wrote to the competitor company that was about to take on the employee in question, bringing to their attention that criminal charges that had been filed against the per son in question and informing it that the organisation in question would not hesitate to take any necessary legal steps to safeguard their business interests should it transpire that sensitive information had been leaked to third parties.

The police filed charges against the ex-employee and the case was heard in court in June 2009. The company representatives confirmed that the ex-employee had settled his monetary dues. The ex-employee admitted to the charges brought against him and said that he had resigned from his post with the competitor organisation.

The court found the ex-employee guilty on charges of misappropriation and computer misuse and, after considering his admission, the fact that he resigned from the competitor of the organisation and the payment of the relative dues in relation to a breach of contract, the court applied the provisions of the Probation Act for a term of three years.

It has to be pointed out that the charges brought against the ex-employee carry with them a term of imprisonment for a maximum period of seven years. Had the particular circumstances of the case been different, he could have been given an effective prison term.

Industrial espionage is not something that we only read about in fiction books or that happens in large corporations abroad; it is present everywhere and can result in huge economic losses.

It is very important to report to one's head of department if one suspects that anyone is accessing information they do not need, making copies or taking any company documents away from the office.