Trade Secrets 2020

Last Updated April 28, 2020

Jordan

Law and Practice

Authors



Hammouri & Partners Attorneys-at-Law is a prominent multi-practice law firm established in 1994 in Amman, offering its diversified legal services through the firm's three departments, namely the Litigation Department, the Corporate Department and the International Department, with the support of 20 legal experts as well as a number of qualified professionals who support the firm’s operations. The firm’s client portfolio includes numerous major Jordanian entities as well as governmental institutions, in addition to international clients, including multinationals. Hammouri and Partners offers advice on legal matters related to an array of sectors and industries, including banking and finance, corporate and commercial, agency and franchising, international trade, intellectual property and trade marks, pharmaceuticals, manufacturing, construction and infrastructure, healthcare, information technology, telecoms, and insurance. Furthermore, the firm offers representation at all levels of Jordanian courts, as well as assistance with enforcement of foreign judgments and arbitral awards, and with arbitration. The firm would like to thank Rawan Alameddin, an associate; Ruba Madi, an associate; and Manar Nababteh, a trainee attorney.

Jordan is a jurisdiction where statutory law (codified statutes) is the primary body of law and the same applies to trade secret protection. However, court precedents have an important impact on the making of law in Jordan despite their non-binding nature, since precedents set by the Court of Cassation (the Supreme Court) are customarily followed by lower courts.

Jordan has enacted a relatively modern body of law to protect trade secrets in an attempt to keep up with the increasing worldwide trend on protection of trade secrets, both on a domestic level as well as by joining various international bodies.

More specifically, at present the main body of law in Jordan on trade secret protection is the Unfair Competition and Trade Secret Law (the “Law”) enacted on 1 May 2000. Whilst the Law remains the main reference on trade secret protection, at the same time a number of other statutes cover certain aspects of trade secret protection, those of rights protection, primarily the Jordanian Civil Code/1976, the Labour Law No 8/1996 and its amendments, the Protection of Author Rights Law No 22/1992 and its amendments, the Civil Procedures Law, the Jordanian Arbitration Law, the Penal Code, the Copyrights Law and the Trademarks Law.

More specific legal provision will be found to be applicable against the general provisions mandating the matter.

In terms of the most relevant international conventions that govern trade secrets, Jordan is a member of the Paris Convention for the Protection of Industrial Property of 1883, the Berne Convention of 1971 and the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”) due to Jordan’s membership in the World Trade Organization.

The current applicable framework on trade secrets is in harmony with the above-mentioned international conventions, which complement the domestic bodies of law, which in turn apply in a uniform manner both at national and local level.

The Jordanian legislator has not addressed specific types of information that may or may not be protected as a trade secret, therefore any type of information might be granted the legal protection of a trade secret as long as it grants its owner an advantage among its competitors and it meets the requirements and description of a trade secret under Article 4 of the Law, as detailed below. Under the light of the domestic bodies of law, the key element for the protection of a trade secret is its commercial/economic value, whereby if the trade secret does not produce any commercial/economic value, it cannot be granted the legal protection of a trade secret.

In relation to secrets that are not considered as trade secrets, there are specific laws in Jordan that regulate their protection, an example of which is the Protection of State Secrets Law/1971.

At the same time, the Jordanian legislator follows the approach of the TRIPS Agreement in terms of identifying three elements that, should they exist, would mean that the information would be considered as a trade secret, as follows:

  • confidentiality of the information;
  • economic value of the information; and
  • whether they have taken reasonable and serious measures to preserve the confidentiality of the information.

There is a lack of landmark court precedents in Jordan on trade secret claims, whereby courts have not yet rendered any award specifically granting a claimant the legal protection of a trade secret; however, the courts have found on the few cases that a trade secret claim had been raised where the information in dispute did not qualify as a trade secret as it did not meet the substantive requirements of a trade secret as previously explained.

Therefore, it is not possible to provide concrete examples on trade secret protection in the Jordanian jurisdiction, nor did the legislator provide such examples.

However, two case law examples on certain aspects of protectable information are a Supreme Court decision on the disclosure of bank secrets, which was a criminal case, and a civil case that included an allegation on disclosure of work secrets, post-termination of the employment contract.

In terms of theoretical examples of trade secrets, those can be know-how, designs, formulas, ingredients, software algorithms, methods, client lists, pricing lists, etc.

Article 4 of the Law defines the substantive conditions that should be met in order for information to acquire the legal protection of a trade secret.

Evidently, in order for information to be classified as a trade secret, it should not be known to the public nor to the specialists in the field in which the information has a commercial/economic value.

The Jordanian legislator has followed in the drafting of Article (4), the elements stipulated in Article 39.2a of the TRIPS Agreement, demanding that for information to qualify as a trade secret, there should be present confidentiality of information either in its entirety or as to the assembly of its components; ie, not being widely known or easily accessible to the public in a manner that jeopardises its secrecy.

However, this means that the degree of confidentiality is not required to be absolute, as it is possible for a limited number of persons to know this trade secret, provided there is an obligation not to disclose it.

In addition, precautionary measures to preserve the secrecy of the information must be taken by the person concerned with protecting this information as a trade secret, denoting a level of seriousness as to the information’s secrecy and the commercial advantages it possesses as a result of owning this information as a secret.

Moreover, the legislator has conditioned that the trade secret must not be against the public order or policy in order to be granted legal protection.

A trade secret owner is required to take reasonable measures to protect its trade secrets; however, the Jordanian legislator has left it to the courts to decide whether the measures taken by a trade secret owner were reasonable enough to maintain its secrecy and with regard to the importance the trade secret owner places on the secret itself and its interests in retaining its secrecy. This is a stance that can be easily understood, as it is not possible to include an exhaustive list of all measures that can be taken by a trade secret owner to protect a trade secret, nor a list of what constitutes a reasonable measure.

Along with this, since the burden of proof that the information in a trade secret claim satisfies the requirements of a trade secret falls on the claimant, the claimant is required to prove that it has taken reasonable measures to assure the secrecy of the information for which legal protection is claimed.

Despite not having precedents guiding us to the reasonableness standard presented in Article 4 of the Law, the standard is objective in its nature and is to be determined on what a hypothetical claimant in the possession of the trade secret could have done to safeguard the information’s secrecy, taking into consideration the nature of the information that needed to be protected by the reasonable measures.

Such measures include keeping the secret information in places where others cannot access it (such as steel cupboards), encrypting the information, password-protected access to the information, using alarms and surveillance cameras, labelling, and signing of non-disclosure and confidentiality agreements.

Pursuant to Article 19 of the Jordanian Labour Law, an employee has a duty to safeguard the employer’s work or commercial secrets and is liable for any disclosure of those secrets, whether it was during or after the employment contract’s legal duration.

Disclosure by an employee of any of the employer’s work or commercial secrets during the employment period forms grounds for suspension without notice in line with Article 28.6 of the Jordanian Labour law.

However, it is key to note that the legal provisions governing trade secrets should be read in conjunction with each other; if disclosing the trade secret itself to the employee was not necessary for the performance of its obligations under the employment contract, the employer may be considered as negligent in taking reasonable measures to maintain the secrecy of the trade secret, and as a result will not be awarded legal protection for its trade secret; in addition to the cases whereby the employer has failed to prove that the alleged trade secret meets the requirements of a trade secret under Article 4 of the Law.

Adding penalty provisions in an employment contract is one of the ways for protection; however, the wording of said provisions should be carefully drafted to avoid being considered by the courts as invalid.

Under the current Jordanian framework, trade secrets are legally protected against the analogous principle of misappropriation; however, said legal protection cannot be extended to the cases where a trade secret is obtained and/or used and/or disclosed through lawful means.

According to Article 6.3 of the Law, obtaining a trade secret by means of reverse engineering or through independent research is both legal and in line with honourable business practices; on the contrary, if such possession of a trade secret falls under legal commercial competition, this results by default in losing the right to claim compensation for the usage of a trade secret that has been discovered independently or through reverse engineering.

However, the impact of this independent research or reverse engineering might not always result in the trade secret losing in its entirety the legal protection, since that might lead to multiple trade secret right-holders, based on the circumstances of each case and the new status of the information’s publicity.

With regard to the protection of computer software and technology secrets, the Law does not specify a specific protection mechanism; however, if any of the conditions detailed in the “Elements of protection” were applicable, then the software and/or technology shall be protected under the Law.

Also, and since the protection under the provisions of one body of law does not exclude the application of another law, consequently, computer software is also protected under the Author Rights Law 22/1992.

This protection is different than trade secret protection, as the protection for a trade secret is for the trade secret itself, unlike the author right, in which protection is for the author.

Furthermore, Jordanian law does not prevent the owner of the software from registering it as a patent (as permitted by the law), provided it involves an innovative activity to solve a technical issue.

There is no specified duration in Jordan for the protection of trade secrets; however, the Law specified a five years protection for secret tests on data, drugs and agricultural chemical products in certain occasions.

In the event of disclosure, compensation can be claimed, noting that compensation cannot be claimed for all types of disclosure, and the same applies to accidental disclosure, although the law requires that in order to file a claim to prove that the act is contrary to honourable business practices, the committing of such act requires intention. However, the law did not specify whether the intention can be assessed as a good or a bad intention, although in the authors' opinion the interpretation of the law may consider the intention as a bad intention. All in all, this shall be pursuant to the evaluation of the court.

Regarding controlled disclosure, the law does not specifically address this point. However, for secret tests on data, drugs or agricultural chemical products, the law has specified when exactly the disclosure is permitted: if the disclosure is necessary for the public and if a competent public entity takes the necessary measures to ensure that no unfair commercial use of said data is made, meaning that the disclosure shall be within the limit.

Furthermore, parties can agree in a contract or through separate non-disclosure agreements (NDAs) not to make public announcements noting that the legislator requires that the owner of the trade secret shall take reasonable procedures to maintain confidentiality.

Jordanian law addresses licensing under Article 9 of the Law by setting out the conditions that can be considered invalid in a licensing contract; any condition that has a negative effect on trade and that may obstruct the transfer of technology and its publication is void. More specifically, the licensee is not permitted to transfer the improvements made to technology covered by the licensing contract to any other party except for the licensee him or herself. Furthermore, the licensee is not permitted to contest, administratively or judicially, the right of the intellectual property that has been licensed and the licensee must accept the licence with a set of rights instead of a sole right. Furthermore, and since Jordan is a party to the TRIPS Agreement, the Agreement states that nothing shall prevent any members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. Such practices may include exclusive grant back conditions, conditions preventing challenges to validity and coercive package licensing, in light of the relevant laws and regulations of that member.

With regard to maintaining the trade secret whilst there is a grant of licence to use it, in addition to what is mentioned above regarding the invalid conditions, it is to be included in the contracts of licensing conditions regarding the trade secret.

The main element that differentiates a trade secret from other IP rights (trade marks, patents, author rights, etc) is the duration of protection, which is not applicable to the first but is applicable to the latter.

Furthermore, a trade secret is one of the few rights that are protected even if it was not accessible to the public.

Under Jordanian law, a plaintiff may be able to assert trade secret rights in combination with other rights; however, this will differ depending on what the claim is based on. For example, if a formula was written on a piece of paper as a secret, and then someone obtained said piece of paper and disclosed the secret, in such case one can claim disclosure of the secret in addition to author rights on the manner in which the secret was written, if the disclosure was identical to the writing style of the author.

Fiduciary duty is dealt with under Article 19 of the Labour law, which states that the employee has a duty to keep secret the employer’s industrial and commercial secrets and not to disclose them in any manner even after the expiry of the working relationship. However, theft is not mentioned as an act of misuse, and it is not clear how to prove it, although the Penal Code criminalises the disclosure of secrets in those cases where the employee is a government employee.

Misappropriation per se is not defined under Jordanian law; however, it is dealt with before the courts on a case-by-case basis.

Tortious interference per se is not defined under Jordanian law; however, any claim can be brought in tort, but it will be at the court’s discretion whether to accept considering the act as tort and to award compensation. For example, the Law states in Article 6/3 that if a person has obtained commercial secrets from another party, and this person knows or is able to know that this secret was obtained as a result of a violation of honourable commercial practice, that shall be considered as an act against honourable commercial practices.

As stated in Article 6 of the Law, the standard for misappropriation of a trade secret is relatively broad, as the mere acquisition of the trade secret in itself might be considered as an act of misappropriation.

In other cases, the usage of the trade secret will amount to a misappropriation or to a disclosure of the trade secret. The main consideration in ascertaining misappropriation of a trade secret is that it should be against both honourable business practices as well as against the consent of the right-holder.

Nevertheless, the legislator has highlighted a few trade secret misappropriation cases due to their importance and possibility of reoccurrence, by providing some non-exhaustive examples as to what can be considered as a misappropriation of a trade secret:

  • breach of contract; particularly breach of employment contracts or licence agreements;
  • breach of confidentiality of information falling under fiduciary duty or inducing such breach; and
  • if the person who attained the trade secret attained it through a third party, and has known or could have known that the third party’s possession of the trade secret had been attained through unlawful means and against honourable business practices.

It is the authors' contention that the elements of a trade secret misappropriation claim do not differ when it comes to employment contracts; however, breaching confidentiality obligations under employment contracts to the extent they are related to trade secrets constitutes an example set by the Jordanian legislator as to what is considered to be a trade secret misappropriation, as elaborated previously. This, as a result, relates to the misappropriation liability basis, in proving the misappropriation, and to the remedies awarded by the court in those cases where misappropriation is proved.

In any event, employees are obliged under the relevant legislation, mainly the Jordanian Civil Code as well as the Jordanian Labour law, to maintain the confidentiality of the employer’s trade secrets and not to disclose them under all circumstances; that is evident from the provisions of Articles 19 and 28 of the Jordanian Labour Law.

The obligation of not disclosing the employer’s trade secrets differs from the anti-compete obligation, in the sense that the first is a legally binding obligation and the latter is an obligation that can be agreed upon in the employment contract on the condition that it is limited as to its extension in time and place.

There are no express provisions in Jordanian law mandating obligations that are related to trade secrets in joint ventures; however, it is the authors' view that there are two facets to trade secret protection in joint ventures.

Firstly, under the principles of good faith and confidence in performing contracts, which is expressly addressed in Article 202 of the Jordanian Civil Code, trust and confidence are presumed in joint venture agreements that might form grounds for trade secret obligations between parties to a joint venture. Further, in order to guarantee that all parties to a joint venture are aware of the secret nature of the information deliberated amongst them, the trade secret owner/right-holder should notify other parties in a joint venture of the secrecy of that information.

Secondly, signing NDAs and confidentiality agreements between parties to a joint venture that would set binding obligations in relation to trade secrets, the disclosing of which might be of the utmost necessity to perform the joint venture’s purpose.

Additionally, parties in a joint venture might also enter into licence agreements between each other as to using and benefiting from the trade secret belonging to one of them, as Article 9 of the Law legislates licensing of certain intellectual property rights, including trade secrets.

The Jordanian jurisdiction does not provide for particular provisions as to trade secret claims that constitute industrial espionage, therefore in an industrial espionage case, courts would refer back to the general provisions addressing trade secrets: the Law, the Labour Law and the general rules of the Civil Code, as well as to any other provisions that might be applicable to the specific circumstances of each industrial espionage case.

Whilst there are no jurisdiction-specific best practices in Jordan to safeguard a trade secret, certain practices that are internationally recognised are also considered as best practices in Jordan, examples of which are:

  • signing NDAs and confidentiality agreements with persons having access to the trade secret;
  • if the trade secret owner is a company, it can put in place corporate policies and procedures that are fit for the purpose of maintaining a trade secret; an example of those policies would be to ensure that all employees are aware of the confidential nature and secrecy of the information they use in the course of their work;
  • assuring that any disclosure of the trade secret is limited only to necessary disclosure, meaning that an employee can only know the trade secret in the amount necessary to perform its obligations, and if it is unnecessary to disclose the entire trade secret for the course of work, then partial disclosure would suffice; and
  • establishing physical (eg, labelling) and electronic security and confidentiality measures to protect the trade secret when possible is also highly recommended.

In practice, best practices can differ between small and large companies, since both the number of employees as well as the volume of confidential information can differ, in addition to the protection resources. As an example, a large company would designate a compliance officer and would schedule annual audits for checking compliance, whilst a smaller establishment would entrust compliance usually with its director or management committee and compliance would be on a routine basis rather than annual audits.

There are no legal provisions or guidelines in the Jordanian legal framework mandating exit interviews. However, there is nothing in the law preventing such interviews; in fact, it can also be recommended as one of the best practices to protect a trade secret.

Further, exit interviews can be organised in the company’s by-laws, which is the case with many Jordanian companies that conduct exit interviews, during which various questions are addressed to the employee regarding the reasons behind leaving the company, enquiring about the work information he or she possesses and any electronic devices that might have been handed to him or her with an instruction to return the same without making any copies of the material saved in said device, including of e-mail exchanges, as well as enquiring about the nature of the employee’s future employer or position and emphasising any confidential information or trade secret he or she should not disclose, and maintaining future contact information of the employee.

In an exit interview, or generally after the employment relationship comes to an end, a settlement agreement would usually be signed between the employer and the employee in which parties fully discharge each other from all rights and obligations or mutually recognise the remaining rights and obligations between them, in light of which the employee’s obligation on confidentiality or non-disclosure or non-use of a trade secret can be emphasised; noting that those agreements are not effective until after the employment relationship has ended.

The Jordanian legal framework does not specifically address the differences between an employee’s general knowledge and skills and protectable trade secrets. However, one can differentiate by referring to the Law and examining whether the conditions of trade secrets specified in the Law are applicable.

The employee’s general knowledge can be disclosed without any liability, unlike the disclosure of a trade secret. The nature of this distinction is based on the conditions stipulated in the Law for trade secret information and amongst those is that the trade secret is usually unknown in its final form or its precise components, or it is not easy to obtain it amongst involved parties, usually with this type of information.

Jordan recognises the doctrine of “inevitable disclosure” in those cases in which disclosure is considered inevitable if it concerns information related to the marketing of a drug or an agricultural chemical and if it is not considered contrary to honourable business practices, in particular if the commercial secret is obtained independently or by reverse engineering.

An example of best practices in Jordan when hiring a new employee is to ensure that in the contract of the new employee with the previous employer the period for non-solicitation and/or anti-compete has lapsed, and to ask the new employee if there is an NDA in place, and it may go further to conflict checks, which may extend to include the group companies and the affiliates of the previous employer.

Moreover, it is likely that the misappropriation claim will be filed against the employee and not the previous employer; however, if the conditions of Article 6/3 of the Law mentioned under “Other Legal Theories” were applicable, then the claim can be filled against the previous employer company.

In all cases, routinely the companies in Jordan in their internal regulations include provisions that oblige the employees to maintain confidential information, whether obtained before or during the new work and to avoid the transfer of confidential material in a manner that is interpretable or used by third parties.

The steps of initiating in Jordan a civil lawsuit alleging theft of a trade secret are:

  • to refer firstly to a practising lawyer and to discuss further the case and if the act committed is considered as a breach and to grant a power of attorney to the attorney;
  • to collect relevant evidences and to draft the statement of claim and the list of evidence;
  • the claimant may compile an expertise report and annex the same to the list of evidences; and
  • to determine the competent court and to deposit the relevant documentation to the Registry of the court, which shall notify the defendant.

The Law states that anyone can claim for compensation for the damage caused as a result of unfair competition, and one can, either prior to or during the court case, submit a request associated with a bank or cash guarantee in order to stop such act, place a precautionary seizure on the related materials that contain the misused trade secrets or to the products that result from the misuse, and maintain the relevant evidence.

If any of such procedures took place prior to the court case, then the claim shall be filed within eight days from the commencement of said procedures, otherwise all procedures shall be considered void.

In Jordan there is an analogous rule to the statute of limitations for trade secrets depending on whether the claim is in contract or in tort.

For claims in contract, the limitations period is ten years; however, if the claim is based on an employment contract, then it is two years from the date of occurrence of the base of the claim.

For claims in tort, a case for damages resulting from the injurious act shall not be heard after the lapse of three years from the day on which the injured person took knowledge of the damage and of the liable party.

A case for damages shall not in all cases be heard after the lapse of 15 years from the day on which the injurious act occurred.

Further to what is mentioned in 5.1 Prerequisites to Filing a Lawsuit, broadly speaking, the claimant shall attend the court Registry to register the case; after that, memoranda shall be exchanged between the parties, then the case shall be reviewed by the judge of case management in order to firstly ensure that the relevant documents are complete and in order, and following that, the judge may direct/propose settlement. If no settlement is reached, the judge of case management shall refer the case to the trial judge, whereby the litigation process shall be initiated, such as the hearing of witnesses and of expert testimony.

In Jordan there is no determined jurisdiction of case matter; therefore, the general rules on the case-value jurisdiction shall apply whereby if the case value exceeds JOD10,000, then the competent court shall be the court of first instance, otherwise it will be the magistrate’s court. Trade secret cases are not of a pre-determined value, therefore the competent court shall be that of first instance.

Regarding the territorial jurisdiction, the competent court shall be the court where the defendant is located, which information requires certain procedural steps to be followed and this shall differ depending on whether the defendant is a legal or a natural person. The address of a legal person is what is publicly available, and the address of a natural person is what is registered under his or her national number.

The pleading standards in Jordan stipulate that claims cannot be raised on “information and belief” only, but rather a claimant should and is expected to provide concrete evidence substantiating the claim at its outset.

That is particularly due to the principle of “limiting evidence” adopted in Jordan, whereby parties are expected to provide all of their claims and defences as well as the evidence that substantiates those claims and defences prior to the commencement of a trial.

This fact and evidence gathering takes place at an early stage of a lawsuit during which parties exchange statements of claim and response. Following expiry of the prescribed period, only in limited cases is it permitted for the parties to provide any further evidence.

The consequences of raising an unsubstantiated claim might be embodied in a winning respondent raising a claim for damages due to the claimant’s abuse of its right to legal recourse, pursuant to Article 66 of the Jordanian Civil Code, as well as precedents in Jordan.

Although the right of legal recourse is guaranteed in Article 101 of the Constitution, it is restrained by not being used unlawfully.

There are no specific mechanisms in Jordan to assist in obtaining evidence in trade secret claims.

That said, the rules that dictate evidence brought before a court in regards to trade secret claims are the general applicable laws on obtaining evidence in Jordan, whereby evidence on trade secret claims falls within the umbrella of “freedom of proof” principle unless otherwise agreed by the parties, when the trade secret claim is based on contractual liability.

However, there are various rules that dictate the judge’s power in weighing an evidence despite the “freedom of proof” principle; eg, a judge cannot render an award based on a witness testimony contradicting a complete written evidence.

Nonetheless, this fact gathering takes place prior to the trial’s commencement, during which parties may request the assistance of the court in obtaining evidence pursuant to Articles 21 and 25 of the Jordanian Code of Evidence, to obtain evidence that is in the possession of the opposing party or third parties.

Pursuant to Article 101 of the Jordanian Constitution, both trials and the announcement of an award are held in public.

However, a court may, in exceptional circumstances, decide to hold trials in secrecy on matters related to public policy, or in juvenile cases.

Based on that, although secrecy in litigation in Jordan is an exception, the concept is not fully rejected; however, no legislations or precedents address the secrecy of trade secret litigation due to the lack of court precedents on the subject as well as the relative modernity of the legislation.

In light of the relevant legislations, a defendant can provide the following defences in a trade secret claim:

  • the defendant did not obtain or use or disclose the trade secret at dispute;
  • the information it obtained/used/disclosed does not meet the requirements of a trade secret under Article 4 of the Law, in particular that it is well known to the public in its entirety or partially, that it does not have any commercial value, and lastly that its right-holder did not take the necessary precautions to keep it out of the reach or use of a non-authorised person; such precautions can be material or contractual, and they are weighed on a case-by-case basis;
  • the defendant was authorised to use or disclose the information for which misappropriation is claimed before the court; namely that it had an agreement with the owner of the trade secret or its right-holder to use it or benefit from it (licence agreements or employment contracts);
  • the defendant reached the information independently or through reverse engineering; and
  • the usage or possession or disclosure of the trade secret does not contradict honourable business practices.

The specific concept of dispositive motions is not addressed in the Jordanian jurisdiction; however, there are available motions that might set an end to the dispute if raised.

Pursuant to Article 109/c of the Jordanian Civil Procedures Law, a party may apply – within the time period allowed for exchanging pleadings – a request that the statute of limitation for the claim has lapsed, and therefore courts no longer have the jurisdiction to decide on it.

The statute of limitation for a trade secret claim depends on the source of this claim; commercial obligations-based claims have a statute of limitation of ten years unless the parties have agreed on a lesser period (Article 58 of the Jordanian Commercial Code).

On the other hand, if the claim is in tort, then the statue of its limitation pursuant to Article 272 of the Jordanian Civil Code is three years from the time of acknowledging that claim.

Other motions that can resolve the case if brought at any stage of the proceedings, including before the Court of Cassation, are claims that are related to public order, those include the court’s lack of jurisdiction. Motions that are related to public order can be brought by the court at any stage of the proceedings.

Neither contingency litigation nor its financing is available in Jordan; however, it is possible pursuant to Article 15 of the “Regulation on court fees” to apply for an adjournment on paying court fees subject to specific provisions.

It is key to note that court fees may not exceed the limit of JOD5,000; following that, litigation costs depend on several factors, the most important of which is the value of the claim. Illustrating that, courts charge as follows:

  • for claims with a value less than JOD10,000, a 3% fee on the claim sum;
  • for claims with a value of more than JOD10,000, 3% on the first JOD10,000, in addition to 2% on the second JOD10,000, further to 1% on the additional value of the claim, up to JOD200,000, capped at JOD1,200 for claims up to JOD200,000; and
  • for claims with a value above JOD200,000, courts will charge JOD1,200, in addition to 1% of the remaining value of the claim capped at a total of JOD5,000.

In addition to court fees, parties should pay the official power of attorney fees, which amount to JOD52, capped at JOD82.

As well as import stamp fees, namely 0.003% of the value of the contract(s) submitted in the claim.

Further, if parties intend to request an expert in the litigation process, they should expect fees that depend on the expertise itself, in the range of JOD200-1,000.

Attorney’s fees may be awarded upon parties’ request, which routinely amount to 5% of the claim sum, capped at a total of JOD1,500 for all stages of the proceedings.

All court awards in Jordan are decided by judges, as the concept of a jury trial does not have any implementation in the Jordanian legal system.

In Jordan, after the period of pleading exchanges lapses and the trial process commences, parties may present their arguments through submitting memoranda before the court in the hearings, provided that they do not present arguments that do not have a basis on their initially submitted pleadings.

During the trial process the judge may decide to allow hearing the testimony of live witnesses and the cross-examination of the witnesses.

Following that, the duration of the litigation depends on whether there are many witnesses that the court allows hearing; however, a general estimate of the litigation duration is from one to two years before the court of first instance, a year to a year and a half before the court of appeal and six months to a year before the Court of Cassation (the Supreme Court).

Pursuant to Article 2 of the Jordanian Code of Evidence, it is accepted to request an expert witness on certain issues on which a judge does not have a competent knowledge (usually technical, forensic and financial).

There are two ways to present expert testimony in a lawsuit.

  • Pursuant to Article 83/2 of the Jordanian Civil Procedures Law, parties can attach with their pleadings a memorandum of an expert of their choice clarifying the subject matter for which expertise is requested; following that, the opposing party may respond with a memorandum of an expert of its choice. The court may then appoint an expert to provide its expertise on the issues that are subject to the expertise request, who then studies the experts’ memoranda submitted by the parties and provides his or her opinion on those.
  • Pursuant to Article 84 of the Jordanian Civil Procedures Law, if the court permits to present the expertise requested by the parties in their list of evidence as attached to their pleadings memoranda, it then appoints an expert of the parties’ choice if there would be any, or else it appoints an expert officially accredited by the Ministry of Justice. Following said appointment, provided the parties do not object to that expert, the expert proceeds with preparing an expert’s report, which may be admitted or dismissed by the court. In the case of court admittance, the court might rely in its award on it or allow the parties the opportunity to cross-examine the expert before the court prior to issuing its judgment on the case.

Pursuant to Article 7 of the Law, the holder of the trade secret right, either at the stage of filing a lawsuit or during the course of the proceedings and provided that he or she presents a monetary or bank guarantee, at the court’s discretion, can request the following preliminary injunctive reliefs:

  • to stop the misuse of the trade secret in dispute;
  • to order precautionary attachment on the materials containing the trade secret, or on any product that might have been produced due to the misuse of the disputed trade secret; and
  • to take the necessary measures to maintain the availability of any relevant and material evidence to the trade secret claim.

The exact value of said guarantee is not determined by law, and it is left to the discretionary power of the courts to decide whether the presented guarantee is proportional to the trade secret claim and the damage that might have been caused to the respondent if the court finds a bad intention element.

The available damages to be granted to a successful claimant do not include punitive damages.

Further, Jordanian law does not define specific measures of damages to be followed by courts when assessing the damages in a trade secret claim, leaving this determination to the discretionary power of the court on a case-by-case basis.

However, the awarded damages depend on the basis of the liability for the trade secret misappropriation, whether in contract or in tort.

Pursuant to Article 363 of the Jordanian Civil Code, the damage in contractual liability is measured on the actual loss incurred; further court precedents have affirmed that it does not include lost revenues.

On the other hand, pursuant to Article 266 of the same law, damages in tort are measured on actual loss incurred, as well as lost revenues, while, pursuant to Article 7 of the Law by virtue of Article 3 of the same law, a successful respondent can claim damages by raising a claim against the claimant for the damages it incurred as a result of the claimant’s unsuccessful lawsuit.

Under Article 7 of the Law by virtue of Article 3 of the same Law, courts have the power to recall or to confiscate products that have been found to be produced as a result of a trade secret misappropriation, or even order the destruction of such products or the usage of these products "for non-commercial purposes"; for example, charity.

However, as to the contractual bases for an employee’s misappropriation of a trade secret, it is possible to agree on limiting the employee’s competition to the employer after the labour contract lapses. This limitation should be addressed in place and time, or it would not have any legally binding effect according to Articles 814 and 818 of the Jordanian Civil Code.

Following that, it is affirmed by precedents that a condition completely limiting the employee’s subsequent employment is invalid, even if misappropriating a trade secret has been proven, since it would contradict Article 66.2c of the Jordanian Civil Code, which demands the appropriation between using the right and the harm that might be incurred as a result of practising a right (in this case, the right of contracting).

The concept of an “ex parte civil seizure” per se is not endorsed by the Jordanian legal system.

In civil litigation in Jordan it is not possible to recover the full attorney’s fees that were agreed between the party and their attorney; however, the court in its final decision, and based on the request of the winning party, awards for the winning party attorney’s fees, which shall be paid by the losing party.

Those fees shall equal up to 5% of the award value (both for the first instance and the magistrate’s court), capped at JOD1,000.

The attorney’s fees in the appeal stage shall not exceed half of what is concluded in the decision of the magistrate/first instance stages.

Said fees are recovered together with the value of the final decision through the enforcement department.

Pursuant to Articles 161 and 189 of the Civil Procedures Law, fees and expenses that have been paid during the court case shall be on the losing party irrespective of said losing party being the claimant or the respondent.

The court may order the losing party to pay to the winning party costs for any request made during the hearings as well as expertise costs (such as costs for line analysis, stamps, signature and denial of a fingerprint) or for a claim of fraud provided that is proven as a result of an investigation and said denial or allegation was proven to be false.

Both parties have the right to appeal a court’s decision within the period specified by the law, following the relevant procedures on filing an appeal, the most important of which is filing the appeal through a statement containing clear factual and legal reasoning, which might lead the appeal court to recall the decision of the first instance court within a period of 30 days commencing from the date on which the appealed decision was rendered or from the date of the notification of that decision to the applicant of the appeal. That applies to cases decided by the court of first instance; however, said period is reduced to ten days from the date of the award if the issuing court is the magistrate’s court.

In addition, Article 170 of the Jordanian Civil Procedures Law exclusively determines court orders that can be appealed, although not constituting final judgments; interim reliefs, an order to stay the proceedings, expiry of the statute of limitation, joining another party to the proceedings, dismissing a counterclaim, in a period of ten days from the time of issuing the court’s order or its notification to the appellant. This period applies to orders by both the court of first instance and the magistrate’s court, noting that for interim reliefs issued by the magistrate’s court, the period of filing the appeal is calculated from the day of its notification.

Depending on the facts and circumstances of each case, in most cases a court of appeal renders its decision within a year and a half to two years from the appeal, noting that there is no obligatory period under the law for the court of appeal to render an award and that in some cases that period might be much longer.

Whether the court of appeal decides on an appeal on factual or legal issues is primarily determined by the case value.

If the lawsuit’s value is less than JOD30,000, the court will review it on paper unless it decides otherwise, or if it accepts a request by one of the parties to hear the appeal.

However, if the lawsuit’s value exceeds JOD30,000, the court, at the request of either of the parties, may decide to hear live argument on the appeal, or otherwise, as it sees fit.

In light of that, all appeals filed on a magistrate’s court’s decision are decided on paper unless otherwise decided by the court.

The reason behind the possibility of hearing an appeal before a court is that a court of appeal has the power to review a first instance court’s decision on all grounds, on both factual and legal issues, by annulling the decision partially or entirely, at its discretion, and returning the papers back to the issuing court to take the necessary legal steps, or even to render an entire award on the case.

However, it is possible under Jordanian law for parties to a lawsuit to agree that the court of first instance's decision is both final and binding, which effectively is waiving the parties’ right to appeal. However, in practice, that is very unlikely to happen, albeit it is permitted by the law.

In contrast to other intellectual property rights, no specific criminal penalty for misappropriation of a trade secret is stipulated in the Law.

Resorting to the general Penal Code, it can be concluded that no specific direct provision criminalising trade secret misappropriation is addressed. However, it is possible, with extreme caution, to apply the provisions of Article 355 of the Penal Code, which addresses the specific concept of misappropriation of a trade secret by a governmental employee for misappropriation that resulted out of a contractual relationship.

It is also possible, in those specific circumstances in which the trade secret misappropriation was through unlawful possession of documents that contained the trade secret, to criminalise this action by applying Article 399 of the Penal Code addressing the crime of theft.

However, one must exercise caution with such applications, as it has been long established in Jordanian criminal law that criminal offences and penalties are determined only by express provisions of the law.

With regard to the process for initiating a criminal prosecution on trade secret theft, the complainant should file its complaint before the prosecutor, who then decides on referring it to a court; following that, the defences that might be used by a defendant are those that can be used in a civil lawsuit as well as those related to the criminal intent. Given that trade secret theft crimes, in particular, are mainly based on the taking-over intent, in the event of lacking that intent, a trade secret theft crime complaint would be dismissed.

Evidence in criminal cases is mandated by the previously illustrated “freedom of proof” principle; in addition, possible penalties in a criminal case depend on the nature and degree of the crime, ranging between execution, hard labour, detention or prison, or fine penalties.

ADR mechanisms available in Jordan for resolving trade secrets disputes are primarily mediation and arbitration.

Mediation in Jordan is governed by Civil Mediation Settlement Law No 12/2006 as amended by Law No 25/2017. Referral to mediation can be effected either during case management by the case management judge or after the trial process has commenced, by the magistrate judge. Mediation can be carried out by a mediation judge or a private mediator. The mediation period shall not exceed three months from the date of referring the dispute to mediation.

Arbitration can be agreed upon prior to or after the dispute has arisen and it can be resorted to independently or following mediation. The parties can initiate any precautionary or temporary action and the procedures are upon agreement, including as to the parties’ roles and to treat the procedures as confidential.

The arbitration tribunal shall issue its final decision within the time limit agreed between the parties. However, if the parties did not agree to any, then the final decision is issued within 12 months from the date of completion of the arbitration tribunal formation, and in all cases the arbitration tribunal has the right to extend the duration prior to the end of the period for one or more periods, provided that the total does not exceed 12 months, unless the parties have agreed to a period exceeding that.

Regarding the advantages and disadvantages of ADR, parties tend to opt for either or both the ADR methods since this route is faster and it can be cheaper and due to the flexibility element, since the parties can agree on the procedures and their duration.

Hammouri & Partners Attorneys-at-Law

96 Alsharif Nasser Bin Jamil St.
Amman Cairo Bank Building
3rd floor
Shmeisani
Amman
P.O. Box 930084 – Amman
P.C. 11193 – Jordan

+962-6-5691112

+962-6-5691128

info@hammourilaw.com www.hammourilaw.com
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Law and Practice

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Hammouri & Partners Attorneys-at-Law is a prominent multi-practice law firm established in 1994 in Amman, offering its diversified legal services through the firm's three departments, namely the Litigation Department, the Corporate Department and the International Department, with the support of 20 legal experts as well as a number of qualified professionals who support the firm’s operations. The firm’s client portfolio includes numerous major Jordanian entities as well as governmental institutions, in addition to international clients, including multinationals. Hammouri and Partners offers advice on legal matters related to an array of sectors and industries, including banking and finance, corporate and commercial, agency and franchising, international trade, intellectual property and trade marks, pharmaceuticals, manufacturing, construction and infrastructure, healthcare, information technology, telecoms, and insurance. Furthermore, the firm offers representation at all levels of Jordanian courts, as well as assistance with enforcement of foreign judgments and arbitral awards, and with arbitration. The firm would like to thank Rawan Alameddin, an associate; Ruba Madi, an associate; and Manar Nababteh, a trainee attorney.

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