DIFC Trade Secrecy Law

Jane Lambert

 

In November 2019 the Dubai International Financial Centre ("DIFC") enacted a new intellectual property law (see DIFC Intellectual Property Law (Law No 4 of 2019)). I described its structure in my Introduction to, and Overview of, the New DIFC Intellectual Property Law on 11 Dec 2019 and discussed its provisions relating to patents and utility certificates, industrial drawings and designs, copyrights and neighbouring rights and trade marks and trade names in subsequent articles. In this article, I discuss the provisions relating to trade secrets (arts 52 to 55). There was already an action for breach of confidence under the Law of Obligations which I discussed in DIFC Law of Confidence on 27 Jan 2011.

According to the table to para 3 of Sched. 1 of the Intellectual Property Law, the term "Trade Secret" includes the following:

"all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, programs, devices, formulas, designs, prototypes, methods, techniques, processes, procedures, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialised physically, electronically, graphically, photographically, or in writing

Art 52 of the Law provides that a Trade Secret can be protected when it meets each of the following criteria:

"(a) the information involved constitutes a Trade Secret, or part thereof; 

(b) the information derives actual or potential economic value from not being generally known to other persons who may obtain economic value from its disclosure or use; and 

(c) the person lawfully in control of the information has taken reasonable measures to keep the information a secret."

 This is not dissimilar to art 2 (1) of  Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ 15.6.2016 L 157/1) ("the Trade Secrets Directive"):

"(1) ‘trade secret’ means information which meets all of the following requirements: 

(a) it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; 

(b) it has commercial value because it is secret; 

(c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret."

As in the Trade Secrets Directive, the owner is deemed to be the person lawfully in control of the Trade Secret and he or she is defined as "a  person lawfully in control of the Trade Secret is every person having the right of its disclosure, use and storage" (see art 53 (1) (a) and art 53 (2)).  Such person has "the right to licence (sic), transfer, s4 hare, or assign lawful control of the Trade Secret to any person in return for a consideration or otherwise" under art 53 (1) (b) and also "to prevent any person from misappropriation of the Trade Secret, and shall have the right to claim compensation for any damage caused due to misappropriation thereof by any person" under art 53 (3).

Art 54 provides that the following acts shall constitute misappropriation of a Trade Secret and prohibited under the Law: 

"(a) the acquisition of a Trade Secret by Improper Means; 

(b) the disclosure or use of a Trade Secret by a person who used Improper Means to acquire knowledge of the Trade Secret; 

(c) the acquisition, disclosure or use of a Trade Secret by a person who at the relevant time knows, or ought to have known, that the knowledge of the Trade Secret was: 

(i) derived from or through a person who had utilised Improper Means to acquire it; 

(ii) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or 

(iii) derived from or through a person who owed a duty, towards the person lawfully in control of the Trade Secret, to maintain its secrecy or limit its use. 

(d) the disclosure or use of a Trade Secret by a person who knows, or ought to have known, that it was a Trade Secret and that knowledge of it had been acquired by accident or by mistake."

"Improper Means" is defined in the above-mentioned table to include "fraud, forgery, theft, bribery, misrepresentation, breach or inducement of a breach of a legal or contractual duty to maintain secrecy, or espionage through electronic or other means."   

The following acts, however, are permitted by art 55:

"(a) the discovery, acquisition or use of information from public sources, or known and available information; 

(b) the discovery, acquisition or use of information as a result of scientific research, innovation, invention, development, modification and improvement exerted by persons independent of the person lawfully in control of the Trade Secret; 

(c) the discovery of information pursuant to a licence, transfer, sharing, or assignment of the information; or 

(d) the discovery of information through reverse engineering."

This is an important branch of the law because every invention starts life as a trade secret and there are some technologies that can only be protected by trade secrecy law.  In the next few days, I shall write a short article with some practical tips on how inventors, entrepreneurs and others can safeguard secret technical or commercial information.  It will be angled for a British audience but it should apply equally to the DIFC.

In the meantime, anyone who wishes to discuss this article or trade secrecy and confidentiality generally may call me during UK office hours on +44 (0)20 7404 5252 or send me a message through my contact form.