Protecting Your Trade Secrets In The UAE

• Published date: 14 March 2024
• Subject Matter: Intellectual Property, Patent, Trade Secrets
• Law Firm: Gowling WLG
• Author: Ms Tamara El-Shibib

Most businesses will generate valuable data in the course of executing their business plan. This data can be 'non-technical' such as pricing data, forecasts, customer or vendor lists, or 'technical' such as product optimisation or performance data, secret product formulas or recipes, or know-how. Some of this data can deliver significant value to a business and a competitive edge, provided it is controlled and kept confidential from competitors. In this article, we look at what trade secrets are, why they are important, and the legal framework for trade secret protection in the United Arab Emirates (UAE).

Any data that has commercial value and is managed as confidential information can be considered a trade secret. Trade secrets play an important role in the knowledge-based ecosystem. With fast-moving technology and innovative business models, relying on patent protection to protect proprietary products or methods may not be appropriate or cost-effective. In some cases, those assets may not be protectable by patents. In other cases, for example, where the innovation is a manufacturing method, patent infringement will be difficult to detect and prove, and so the technology may lend itself better to trade secret protection.

With trade secret litigation on the rise in the US and Europe, robust policies and procedures around the management and use of trade secrets have become more important than ever in maintaining that competitive edge and being prepared for enforcement.

The Gulf Cooperation Council (GCC) region is fast becoming an area of commercial importance because of its strong economic outlook, geographic location and investment-friendly environment. For companies looking to expand into the GCC, an understanding of the legal framework around the protection of their valuable know-how and data is crucial.

What is a trade secret?

The World Intellectual Property Organisation (WIPO) defines trade secrets as secrets that add value to a business. Any commercially valuable and sensitive information can qualify as a trade secret. This includes your business strategy, a list of suppliers or customers, product testing and optimisation data, algorithms, manufacturing methods, and so on.

The WIPO provides the following elements for information to qualify as a trade secret. The information must be:

• commercially valuable because it is secret;
• known only to a limited group of persons; and
• subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.

The definition above is consistent with the requirements set out in international legislation for trade secret protection. Emphasis is given to the last point, which requires 'reasonable steps' to be taken by the rights holder to keep the information secret. In other words, active management is required for information to qualify as a trade secret.

Why are trade secrets important?

Patents provide the best protection for new and...