An overview of the protection of Trade Secrets in the UAE
Written By
This is the 15th in a series of articles written by members of our International Trade Secrets Group, highlighting points of note regarding the protection of Trade Secrets in various jurisdictions. In this article, we move on to consider the position in the UAE.
As a signatory to the TRIPS Agreement, trade secrets are afforded protection within the UAE in a number of ways. Whilst there is no statutory definition for “trade secrets”, the concept nonetheless exists and trade secret protection is provided across various UAE Federal Laws with respect to confidential information – both in a general and employment context.
In an employment context, the Federal Law promulgating the Civil Transactions Law (Civil Code) obliges employees to “safeguard the industrial or commercial secrets of their work, even after the expiration of the contract, as required by the agreement or customarily practiced”. It also states that employee’s “Actions in relation to the disclosure of trade secrets” are not subject to limitation periods.
Trade Secrets within the DIFC
Various free zones operate within the UAE, and each may implement their own laws and regulations separate to the UAE Federal Law. One such free zone in Dubai is the Dubai International Financial Centre (DIFC), who have recently enacted the DIFC IP Law which deals with intellectual property and trade secrets. The DIFC has its own courts who can issue judgements, and these judgements can be enforced outside the free zone by the local UAE authorities (i.e. enforced ‘onshore’) if the subject of the enforcement is situated outside the DIFC.
(1) “the information involved constitutes a trade secret, or part thereof;
(3) the person lawfully in control of the information has taken reasonable measures to keep the information a secret.”
Protection of Trade Secrets
In an employment context, employers may impose obligations on their employees in their employment contracts and/or internal policies. It is not unusual for employers in the UAE to request that their employees sign a non-disclosure agreement at the start of their employment, which would include either several or mutual obligations, warranties and indemnities.
The Federal Law on the Regulation of Labour Relations gives employers the right to dismiss an employee without prior notice or the payment of end of service gratuity if the employee “divulges any of the secrets of the establishment where [that employee] works”. It should be noted that these provisions relate to individuals who may misuse confidential information but does not assist when a company (say an individual’s new employer) receives third parties’ confidential information.
In accordance with the Civil Code, the time limitation of one year for filing a claim relating to the violation of an employment contract does not apply to “actions in relation with the disclosure of trade secrets”.
Relief
Where damages are sought by the trade secret owner, it is necessary under the UAE Civil Code for the owner to file a separate civil case against the infringer and seek damages.
In addition, there remains the ability for the owner to make an official complaint with the UAE Ministry of Economy who will (if required) coordinate with police to carry out a raid to investigate the alleged infringement. Depending on the outcome, this may result in a criminal prosecution of the infringer. The infringer may be subject to a minimum period of imprisonment of one year and/or to a minimum fine of AED 20,000 under the Penal Code. It is important to note that courts in the UAE tend to take into consideration whether or not there was “criminal intent” behind the infringer’s actions.
