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New legal studies
Legal Analysis of the Role of Buy-Back Contracts in the Transfer and Protection of Trade Secrets in International Agreements
Volume 5, Issue 1, 2023-2024, Pages 88 - 107
1- Assistant Professor, Department of Private Law, Islamic Azad University, Science and Research Branch, Tehran, Iran
2- Ph.D. Candidate in Private Law, Islamic Azad University, Science and Research Branch, Tehran, Iran.
Abstract :
In contemporary international trade, Buy-Back Contracts have emerged as pivotal legal instruments for facilitating technology transfer and attracting foreign investment in developing countries. These contracts are particularly prevalent in sectors such as oil, gas, petrochemicals, and other heavy industries, where the transfer of technical know-how and advanced technologies is essential. Among the assets exchanged within the framework of such agreements, trade secrets represent a critical component of intangible corporate property, the protection of which is vital for maintaining a competitive advantage. As a form of intellectual property, trade secrets play a decisive role, and their unauthorized disclosure or misuse can result in irreparable harm to the technology owner. Given the unique nature of Buy-Back Contracts, a fundamental legal question arises: How does the conclusion of such agreements influence the mechanisms and extent of protection afforded to trade secrets? This study, adopting a descriptive-analytical approach and focusing on international instruments, legal practices, and contractual provisions, seeks to address this question. The findings indicate that, in the absence of meticulously drafted contractual mechanisms—such as confidentiality clauses, non-disclosure obligations, appropriate legal remedies (e.g., compensation for damages, contract suspension, unilateral termination, or recourse to international arbitration), and the designation of a suitable governing law—the risk of unauthorized disclosure of trade secrets significantly increases. Therefore, adherence to precise contractual drafting standards, incorporation of internationally recognized legal practices, and leveraging the protective capacities of intellectual property law are essential to ensure the effective safeguarding of sensitive information throughout the performance of Buy-Back Contracts. In this regard, it is recommended that the Islamic Republic of Iran, by reforming its domestic legal framework and enacting specific regulations on trade secret protection, takes substantive steps towards accession to relevant international instruments, such as the TRIPS Agreement, TPP, and CPTPP. Such alignment would not only enhance the legal security of foreign investors but also facilitate conformity with global legal standards.
