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The Saudi Regulatory Bylaw for the Protection of Confidential Commercial Information
The Bylaw for the Protection of Confidential Commercial Information represents a crucial legislative framework for safeguarding trade secrets in the Kingdom of Saudi Arabia. It aims to foster trust in the commercial environment and ensure the protection of the moral and material rights of confidential information owners, in line with fair competition rules and transparency principles.
Definition of a Trade Secret and Conditions for Protection
Article 1 of the Bylaw outlines the conditions under which information qualifies as a protectable trade secret. These conditions include that the information must be:
- Not commonly known or readily accessible within its field.
- Possessing commercial value derived from its secrecy.
- Subject to reasonable measures taken by its owner to maintain its confidentiality.
Rights of the Trade Secret Owner
Under Article 2, any person holding the right to disclose, use, or retain a trade secret is recognized as having the right to prevent others from exploiting this secret without their permission. They may take necessary legal actions to protect against any infringement of this right.
Unfair Acts Constituting Trade Secret Infringement
Article 3 clarifies that obtaining, using, or disclosing a trade secret without the owner’s consent and in a manner contrary to honest commercial practices constitutes misappropriation. Prominent examples of such violations include:
- Breach of contracts related to secrets.
- Breach of trust or incitement to breach confidentiality.
- Obtaining information from a third party whom the violator knows obtained it unlawfully.
Conversely, legitimate practices such as reverse engineering or independent discovery of the information are not considered violations of this Bylaw.
Protection of Information Submitted to Official Bodies
Article 4 stipulates that competent authorities are obligated to protect trade secrets submitted to them and shall not disclose them unless necessary to protect the public interest.
Confidential Data Related to Official Approvals
Article 5 provides specific protection for confidential information related to the testing of pharmaceutical or agricultural chemical products. This information is to be protected from unauthorized commercial use for a period of no less than five years from the date of approval for marketing the product.
Exceptions to Protection
Article 6 permits the competent authority to use previously submitted confidential data if:
- The product has not been marketed within a reasonable timeframe.
- There is an urgent necessity to protect the public.
Legal Limitations on Protection
Article 7 clarifies that legal protection does not extend to trade secrets that violate the provisions of Islamic Sharia or public morals, ensuring the Bylaw’s consistency with the Kingdom’s public order.
Compensation for Damages
Article 8 affirms the right of any party harmed by a violation of the Bylaw’s provisions to file a lawsuit before the competent judicial authority to claim compensation for damages incurred.
Enforcement of the Bylaw
The Bylaw concludes with Article 9, which states that it shall be published in the Official Gazette and come into effect thirty days from the date of publication.
Conclusion
In today’s dynamic and highly competitive business landscape, safeguarding trade secrets is more than a legal obligation—it is a strategic asset that directly enhances a company’s competitive edge. The Saudi Regulatory Bylaw for the Protection of Confidential Commercial Information offers a robust legal framework, but true protection requires proactive measures, clear policies, and legal foresight. We strongly encourage companies and business owners to seek professional legal consultation to evaluate their internal controls, contractual arrangements, and compliance with the Bylaw. Investing in legal guidance is not just about compliance—it is about securing innovation, maintaining trust, and strengthening your position in the marketplace.
