Not every commercial advantage should be registered. Formulas, methods, customer lists and know-how are often worth more kept quiet than disclosed in a patent. Iran’s 2024 Industrial Property Act gives this confidential information its own protection as a trade secret. This guide explains what qualifies, what the law forbids, and where its limits lie.
What counts as a trade secret
Under Article 122, a trade secret is commercial information with actual or potential economic or competitive value that is generally unknown, is not readily obtainable by lawful means, and which the lawful holder keeps confidential through reasonable measures. The Act gives a broad list of examples — formulas, drawings, methods, software, techniques, customer lists, business methods, and even unregistered inventions and designs.
The three elements matter individually. The information must have value because it is secret; it must not be easily discoverable; and — crucially — the holder must actually take reasonable steps to keep it confidential. Information a business leaves unguarded does not become a trade secret simply because it is useful.
What the law forbids
Article 123 is short and broad: acquiring a trade secret, or disclosing it, without the owner’s permission is infringement. That reaches employees, contractors, and business partners who obtain confidential information legitimately and then misuse it.
What is allowed: independent discovery and reverse engineering
The protection is not absolute, and this is where trade-secret law differs sharply from patents. Under Article 124, neither independent discovery through one’s own activity nor reverse engineering counts as infringement. A competitor who works out your process on their own, or lawfully buys your product and takes it apart to learn how it is made, has done nothing wrong — and may even gain trade-secret protection over what they discover.
This is the central strategic point. A trade secret protects against theft and breach of confidence, not against a competitor legitimately reaching the same result. Where a product can be reverse-engineered on the open market, a patent — which protects even against independent creation — may be the better instrument, despite the disclosure it requires.
How long protection lasts
A trade secret has no fixed term. Under Article 125, protection lasts for as long as the information remains undisclosed. In principle that can be indefinite — but it ends the moment the secret becomes public, whether through the holder’s own disclosure, a lawful reverse-engineering, or a leak. Longevity depends entirely on secrecy.
Sharing secrets safely
Trade secrets can be commercialised. Under Article 126, the owner may transfer them to another under a contract not to disclose. But the Act attaches a condition worth noting: anyone who passes on a secret must tell the recipient that the information is confidential — otherwise a third party’s later use is not treated as infringement. Labelling and confidentiality undertakings are not a formality; they are what makes downstream protection enforceable.
There is also a public-facing safeguard. Where a business must hand confidential information to a government body — for testing or licensing, say — Article 127 obliges that authority to protect it, with liability for disclosure. And where a trade secret is the subject of court proceedings, the hearing is held in closed session, so enforcing the right does not force its disclosure.
Practical takeaways
Trade-secret protection is earned through conduct, not registration. The businesses that hold it securely are the ones that identify their confidential information, restrict access, mark it as confidential, and bind employees and partners with clear undertakings. The law will protect a secret that is genuinely treated as one — and little else.
For the registered rights that sometimes work alongside trade secrets, see our guides on patents and utility models.
This is general information on the Industrial Property Act, not legal advice. For a specific matter, speak with HENGAM’s team.
Sadegh Shamshiri
Sadegh leads on legal strategy and represents high-profile clients in IP litigation and enforcement — across trademarks, patents, designs, copyright, and domain names, including complex multi-jurisdictional disputes.