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Trade Secret Protection under Qatari Law

Submitted By Firm: Clyde & Co

Contact(s): David Salt, Emma Higham, Rebecca Ford, Sara Khoja

Author(s):

David Salt and Feras Alkasab

Date Published: 8/13/2012

Article Type: Legal Article

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Trade secrets in Qatar are protected under Law No. (5) of 2005 on the Protection of Secrets of Trade ("Qatar Trade Secrets Law").  It is important to note, that no by-laws have been issued to give effect to the provisions of this law.

Definition

The Trade Secrets Law defines trade secret information in terms of three key requirements:

(a)  the information in its totality, form or combined components is usually unknown, or cannot be easily obtained by others who normally deal in such information;

(b)  the information derives its value from being secret; and

(c)  the information is confidential due to the measures taken by the legal holder of the information to maintain its confidentiality (Article 1).

Protection under this law also covers trade secrets resulting from confidential experimentation or previously unknown data (Article 5).

Ownership of trade secrets

The Trade Secrets Law provides that legal title to a trade secret belongs to the individual or legal entity having the right to disclose, use or preserve the confidential information underlying the trade secret (Article 1).

Foreigners have the same rights as Qatari nationals under Qatar Trade Secrets Law, provided that they are nationals or residents of a state that grants Qatari nationals or residents reciprocal treatment (Article 2).

Owner's rights

The owner of a trade secret has a number of rights under the Qatar Trade Secrets Law.  These rights include the right to:

(a)  prevent others from misusing the trade secrets (Article 3);

(b)  dispose of the trade secrets (e.g. via assignment) in whole or in part, with or without consideration for such disposal (Article 4); and

(c)  prevent others from disclosing, obtaining or using the trade secret without the owner's previous consent or in a manner contrary to honest commercial practices (Article 4).

In view of these rights the Qatar Trade Secrets Law (Article 7) specifically prohibits the following actions by third parties:

(a)  breaching an agreement between the owner of a trade secret and an investor or user of the secret;

(b)  breaching or inducing another to breach the confidentiality of trade secret information;

(c)  acquiring trade secrets through fraudulent means; and

(d)  acquiring trade secrets from third parties if the acquiring person knows or should have known that the third party obtained the trade secrets through means that are contrary to honest commercial practices (acquisition through independent development / scientific research is not contrary to honest commercial practices).

The owner of a trade secret may seek compensation for damages resulting from the breach or misuse of the trade secret.  After posting the required bond under the provisions of the Qatar Trade Secrets Law (Article 8), a competent court has discretion to take any of the following injunctive actions:

(a)  halt the trade secret infringement;

(b)  order a provisional attachment of any materials or products embodying the infringed or misused trade secrets wherever found; and

(c)  retain any evidence related to the trade secret infringement.

Owner's obligations

In addition to these rights, the owner of a trade secret has a number of obligations under the Qatar Trade Secrets Law.  These obligations include:

(a)  implementing the measures necessary to safeguard the trade secret information to prevent use by others; and

(b)  regulating access to the trade secret information within the business and restricting such access to those legally obligated to maintain confidentiality and prevent disclosure to others.

It is important to note that the Qatar Trade Secrets Law imposes a duty on the legal owner of a trade secret to exercise reasonable efforts to safeguard the trade secret.  As discussed under Penalties below, an owner's breach of this duty may subject the owner to financial penalties and/or imprisonment.

Government disclosure of trade secrets

The rights of trade secret owners to prevent the disclosure of their trade secrets is subject to an exception whereby Government agencies can require the submission of certain trade secret information in the course of approving the marketing of certain pharmaceutical or agricultural products.  In such a case, the Government agencies are required to prevent the unauthorised commercial use of such trade secret information.  Additionally, the Government agencies may publicly disclose the trade secret information if such disclosure is necessary to protect the public (Article 5).

Penalties

The penalties under Qatar Trade Secrets Law for trade secret infringement include imprisonment for up to one year and/or a fine of 50,000 Qatari Riyals; penalties may be doubled for repeat offenders.  It is important to note that, in addition to infringers, such penalties can also be imposed on trade secret owners who fail to meet their above-mentioned duty to exercise reasonable efforts to safeguard the trade secret.  To this effect, the Qatar Trade Secrets Law (Article 11) states that the penalties described above are "applicable to anyone who is found in breach of any provision of Articles (6) [obligations of trade secret owners] or (7) [prohibited acts by third parties] of this law."

As discussed above, the exercise of reasonable measures to safeguard business information is required to maintain trade secret status and protection under trade secret law generally.  Confidential business information that is not protected by such measures may lose its trade secret status and protection under the Qatar Trade Secret Law.  In addition, the Qatar Trade Secrets Law imposes an affirmative duty on the legal owner of the trade secret to exercise such measures or risk being held responsible and subject to the above-mentioned penalties in the case of trade secret infringement by a third party.  The Qatar Trade Secrets Law also makes it clear that to avoid responsibility in the case of trade secret infringement by others, the owner has the burden of proving compliance with this duty.

Note: Qatari Laws (save for those issued the Qatar Financial Centre to regulate internal business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this advice we have used our own translations and interpreted the same in the context of Qatari regulation and current market practice.   

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