Saudi Arabia Proposes New Trade Secrets Law to Strengthen Protection of Confidential Business Information
The Saudi Authority for Intellectual Property (SAIP) has introduced a draft Trade Secrets Law (نظام الأسرار التجارية) for public consultation, marking a proposed development in the Kingdom’s intellectual property and commercial protection framework.
The draft legislation seeks to establish a dedicated statutory framework governing the protection, ownership, use and enforcement of rights relating to trade secrets and confidential commercial information. It also proposes to strengthen the existing regulatory framework, currently governed by the Regulations for the Protection of Confidential Commercial Information issued under Minister of Commerce Resolution No. 3218 dated 25/3/1432H.
Framework for Trade Secrets Protection
Under the proposed law, trade secrets would benefit from legal protection without requiring registration, provided that the information meets the prescribed conditions of confidentiality, commercial value and reasonable measures to maintain its secrecy.
The draft further addresses the commercial exploitation of trade secrets, expressly recognizing the possibility of licensing and transferring such rights. At the same time, it preserves certain lawful activities, including independent discovery and reverse engineering.
Enhanced Enforcement and Legal Remedies
One of the most significant aspects of the proposed legislation is its introduction of more comprehensive enforcement mechanisms. These include civil remedies, interim injunctions and compensation for damages resulting from unlawful acquisition, disclosure or use of trade secrets. The assessment of compensation may also take into consideration profits obtained through the infringement.
The draft additionally introduces criminal sanctions for specified intentional violations, potentially including imprisonment for up to three years, fines of up to SAR 1 million, or both, with enhanced penalties contemplated for repeat violations.
Furthermore, the proposed framework addresses the protection of confidential information during judicial proceedings, allowing courts to adopt appropriate safeguards where trade secrets are disclosed or examined in the course of litigation.
The draft also contemplates the establishment or authorization of an optional trade secrets documentation service by SAIP. Such documentation would not, in itself, constitute conclusive evidence of ownership.
Implications for Businesses and IP Rights Holders
The proposed legislation reflects a move towards a more structured approach to protecting commercially sensitive information in Saudi Arabia. If enacted, it could have practical implications for businesses, technology companies, investors and other entities that rely on confidential business information, proprietary processes, technical know-how and commercial strategies.
Businesses may therefore wish to review their existing confidentiality arrangements, internal information-management policies, employment agreements and contractual safeguards to assess their readiness for the proposed framework.
Public Consultation and Next Steps
The draft law was made available for public consultation through the Istitlaa platform, with the consultation period running from 26 October to 25 November 2026.
Under proposed Article 19, the legislation would enter into force 180 days following its publication in the Official Gazette, subject to its enactment.
The draft remains subject to public consultation and has not yet entered into force. Its final wording and implementation timeline will depend on the outcome of the legislative process.
For further information or assistance, please feel free to reach out to us at: ksa@alyafi-ip.com
