Trade Secrets Law in Saudi Arabia
Trade Secrets Law in Saudi Arabia
Saudi Arabia offers protection for trade secrets under a combination of national legislation, Sharia (Islamic law) principles, and international commitments (notably the TRIPS Agreement under the WTO). While there is no standalone "Trade Secrets Law", trade secrets are specifically protected through anti-commercial fraud laws, intellectual property laws, and employment regulations.
✅ 1. Legal Framework
a. Trade Secrets Protection Under the Anti-Commercial Fraud Law
Law: Anti-Commercial Fraud Law (Royal Decree No. M/19 of 2008)
Prohibits the disclosure of confidential commercial information without authorization.
Penalties may include fines, imprisonment, and business license suspension.
b. Intellectual Property Law
Administered by the Saudi Authority for Intellectual Property (SAIP).
The Regulations for Protecting Confidential Commercial Information were issued in line with TRIPS (Article 39).
c. Labor Law (Royal Decree No. M/51)
Employees are prohibited from disclosing their employer's trade secrets both during and after employment.
Breach can lead to termination, damages, or legal action.
d. Sharia Principles
Islamic law prohibits betrayal of trust (amanah) and unjust enrichment, which indirectly supports protection of confidential information.
e. International Obligations
Saudi Arabia is a member of the World Trade Organization (WTO) and complies with the TRIPS Agreement, which requires members to protect trade secrets.
🔒 2. Definition of Trade Secret (as per SAIP)
To be protected as a trade secret in Saudi Arabia, information must:
Be confidential and not publicly known
Have commercial value due to its secrecy
Be subject to reasonable steps to keep it secret
Examples:
Client lists
Manufacturing processes
Marketing strategies
Formulas and source code
⚖️ 3. Enforcement and Remedies
Trade secret owners can pursue legal action for:
Injunctions to stop misuse or disclosure
Damages for losses caused by misappropriation
Criminal penalties under Anti-Fraud Law (including fines and jail)
Termination of employment contracts
🛡 4. How to Protect Trade Secrets in Saudi Arabia
Use Non-Disclosure Agreements (NDAs) and Confidentiality Clauses in contracts
Clearly label documents as “Confidential”
Limit internal access to trade secrets
Encrypt sensitive electronic information
Educate employees and partners about confidentiality obligations
Register and maintain IP where applicable
⚠️ 5. Risks and Considerations
Saudi courts will require proof that the business took steps to keep information secret.
Courts consider whether the accused party had a duty of confidentiality and knowingly breached it.
Legal proceedings may require Arabic translations and are governed under Sharia-influenced commercial law.
✅ Summary
| Aspect | Details |
|---|---|
| Dedicated Trade Secrets Law | ❌ No standalone law, but covered under multiple laws |
| Key Legal Instruments | Anti-Fraud Law, Labor Law, SAIP Regulations, TRIPS |
| Protection Criteria | Secrecy, commercial value, protective measures |
| Enforcement Mechanisms | Civil and criminal penalties, injunctions, damages |
| Best Protection Practices | NDAs, internal policies, limited access, training |
| Governing Body | Saudi Authority for Intellectual Property (SAIP) |
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