We begin the first in a series of case studies of the Trade Secrets Laws of the Middle East and North Africa (“MENA”) with a review of the trade secrets law of the United Arab Emirates (“UAE”).
The UAE affords broad protection of trade secrets through multiple avenues, including its civil, labor and patent laws. However, the lack of a specific and comprehensive trade secrets law means that scope and enforceability of these rights is somewhat uncertain. Thus, while the UAE does afford trade secret protection and remedies, the best form of trade secret protection for companies doing business in the UAE is through contracts with employees and third parties, which are generally enforceable.
The following is a brief overview of the central UAE laws addressing trade secrets:
- Federal Law No. 5 of 1985 on the Civil Transactions Law of the UAE, Article 905(5) requires employees to “Safeguard the industrial or commercial secrets of the work, even after the expiration of the contract, as required by the agreement or customarily practiced.” Notably, Article 922(2) provides that actions in relation to the “disclosure of trade secrets” are not subject to a time limit, unlike other actions arising out of employment contracts, which expire after one year following termination of the contract.
- Federal Law No. 8 of 1980 on the Regulation of Labor Relations, Article 120 affords an employer the right to dismiss an employee without notice “If he divulges any secrets of the establishment where he is employed.”
- Federal Law No. 2 of 2015 on Commercial Companies, Article 369 provides penalties in the form of imprisonment and/or a fine that would apply against “Any person who utilizes statements or information” obtained at “any stage of incorporation of the company” from a comprehensive array of parties involved in the incorporation process, including legal consultants, financial consultants, the subscription manager, the subscription coverage sponsor, or the parties participating in the incorporation procedures or their representatives. Such penalties also apply to the chairman, board members, or any other employee who “utilizes or discloses a secret of the company or deliberately attempts to cause damage to the activity of the company.”
- Federal Law No. 31 of 2006 on the Industrial Regulation and Protection of Patents, Industrial Drawings, and Designs, Articles 39 to 42 also introduce trade secret protection for companies seeking to protect their knowledge or “know how.” Article 39 provides for protection of “know how” from “any illegal usage or disclosure or announcement from third parties, as long as it hadn’t been published or put at the public disposal, and having the benefit of protection stipulates that the owner of the know how had adopted the necessary measures for maintaining the secrecy of its elements by the manner the bylaws indicates for such act.” Article 41 specifically requires that the “know how” be confirmed in writing and defined, and Article 42 provides that improper disclosure of the “know how” is illegal. Notably, Article 40 provides a limitation on trade secret protection, noting that if a party acquires the “know how” by legal means, they are entitled to use such knowledge or convey it to others.