Basics of Trade secrets in Saudi Arabia

In the context of a competitive economy and deepening globalization, protecting trade secrets in Saudi Arabia is not merely an option but also a decisive factor for the survival and development of businesses. Trade secrets, in addition to being valuable intangible assets, are the key to helping businesses differentiate, build their own brands, and dominate the market. The protection of trade secrets not only helps businesses maintain a sustainable competitive advantage but is also a motivation for businesses to constantly innovate, create, and create new products and services with high value. Moreover, a transparent business environment that respects intellectual property rights will attract domestic and foreign investors, contributing to promoting economic growth and diversifying industries in Saudi Arabia. The protection of trade secrets is also an important factor to build the trust of customers, partners and the community, contributing to improving the national image. However, many businesses do not know how to protect trade secrets, Viet An Law would like to guide customers on how to protect trade secrets in Saudi Arabia through the article below.

Introduction to the concept of trade secrets in Saudi Arabia

Trade secrets are information that is proprietary, unpublicized, commercially valuable, and protected by their owners. To be recognized as a trade secret, information must meet the following conditions:

• Restriction: Only a limited group of people, usually people directly involved in the business, are aware of this information.
• Commercial value: Information must bring a competitive advantage to the business, helping the business generate profits.
• Protections: The owner must take reasonable measures to keep the information confidential, such as entering into a confidentiality contract, restricting access, etc.

The illegal use, disclosure or appropriation of other people’s trade secrets is a violation of the law and is considered unfair competition.

How to protect trade secrets in Saudi Arabia?

Unlike other forms of intellectual property, trade secrets do not need to go through protection registration procedures. This means that, to protect their business information, businesses do not need to carry out any administrative procedures. A trade secret can be protected indefinitely, as long as it remains secure. However, if the trade secret is discovered or acquired legally and made public, the right of protection will terminate. Essentially, trade secrets are different from other forms of intellectual property as follows:

Independence of registration procedures

• No registration required: Trade secrets do not require businesses to carry out any registration procedures with the competent state agency for protection.
• Flexibility: This provides flexibility for businesses, saving them time and money compared to applying for other forms of protection such as patents.

Term of protection

• Indefinite (in theory): Trade secrets can be protected as long as the information remains private. There is no specific time limit to this conservatorship.
• Retention conditions: However, security is the deciding factor. Once the information is disclosed or becomes common knowledge, the right to protection will terminate.

Preliminary Acts of Infringement of Trade Secret Protection in Saudi Arabia

Disclosure of confidential information

• Disclosure to third parties: Sharing confidential information with competitors, vendors, or any unauthorized individuals.
• Use of information for personal purposes: Employees or partners use confidential information for personal gain.

Unauthorized copying

• Document copying: Unauthorized copying of documents containing confidential information.
• Product impersonation: Producing similar products or replicating competitors’ products based on stolen confidential information.

Cyber attacks

• Hacking: Unauthorized entry into computer systems to steal data.
• Malware: Uses malware to sabotage systems and steal information.

Unfair competition

• Collecting information by illegal means: Using fraudulent and fraudulent measures to collect information.
• Information brokerage: Buying, selling, or exchanging confidential information.

Breach of confidentiality contract

• Non-compliance with contractual terms: Individuals or organizations that do not comply with the signed confidentiality commitments.

Basics on How to Protect Trade Secrets in Saudi Arabia

Clearly identify confidential information:

• Information classification: Classify information into different levels of security to clearly identify what information needs to be strictly protected.
• Value Assessment: Evaluate the value of each piece of information to determine the level of investment in protections.

Take security measures:

• Confidentiality contract: Require all parties involved (employees, partners, suppliers) to sign a confidentiality contract to ensure that the information is not disclosed.
• Information Management System:
  • Decentralize access: Give access only to those who need it.
  • Strong passwords: Use complex passwords and change them frequently.
  • Data encryption: Encrypt sensitive data for added security.
• Safety net:
  • Firewall: Install a firewall to prevent external attacks.
  • Intrusion detection: Use intrusion detection systems to promptly detect and prevent unauthorized intrusion activities.
• Education and awareness-raising: Organize training courses on information security for employees to raise awareness and responsibility.
• Physical: Physically protect important documents, restricting access to areas that contain sensitive information.