The New Patents and Utility Models Law: What Small Businesses and Startups Should Prepare Now

What the Council of Ministers approved, and what is not yet settled

What is established so far is that the Council of Ministers, at its session of 9 Jumada al-Ula 1448H, corresponding to 20 October 2026, approved the Patents and Utility Models Law. Published reports of the session state that the Council also approved a Designs Law, a New Plant Varieties Law and a Layout Designs of Integrated Circuits Law at the same session, which would make this law one of four new intellectual property laws. We pass this on as reported, and it remains subject to verification until the official texts of the four laws are published.

What is not yet settled is everything a business owner needs to make a detailed decision. We therefore recommend a clear distinction between what you can safely do today, which is putting your contracts and internal records in order, and what must wait for the official text.

• The full text of the law and its articles, which has not yet been published in Umm al-Qura.
• The date the law takes effect, which has not been announced so far.
• How the new law relates to the current law and its transitional provisions, including the status of applications filed before it takes effect.
• The conditions for granting a utility model, its term of protection, its fees and its filing procedure.
• The rules on employee inventions in the new text, and whether they stay as they are under the current law or change.
• The implementing regulation and the procedural guides the competent authority will issue.

Until the new text is published and its effective date and transitional provisions are known, the reference for any application filed today remains the current law, namely the Law of Patents, Layout Designs of Integrated Circuits, Plant Varieties, and Industrial Designs issued in 1425H (2004), and the authority competent to apply it is the Saudi Authority for Intellectual Property.

Patent and utility model: what is the difference

Under the current law, a patent is granted for an invention that is new, involves an inventive step and is industrially applicable, and the invention may be a product, an industrial process, or related to either. An inventive step means the invention would not have been obvious to an ordinary person skilled in the field in light of the prior art. The term of patent protection under the current law is twenty years from the filing date, and an annual fee is payable according to the official schedule. It is a strong tool, but it requires a high level of innovation and an examination that can take time.

A utility model, in international practice generally, is protection designed for smaller technical improvements, and it is sometimes called a petty patent. In many comparable systems the level of innovation it requires is lighter than for a patent, its term is shorter, and its procedure is simpler, faster and cheaper. These are general features from comparative law, not the rules of the new Saudi law: its conditions, term and fees in the Kingdom will only be known from the official text and its regulation.

• Subject of protection: the patent is for an invention that solves a technical problem with a clear inventive step, and the utility model is usually for a practical improvement to an existing product or tool.
• Level of innovation: high for a patent, and usually lighter for a utility model in comparable systems.
• Term: twenty years for a patent under the current law, while the term of a utility model under the new law has not yet been announced.
• Illustrative example: a modified fastening mechanism on a production line, or a tool handle functionally redesigned to reduce waste, may be the kind of innovation utility models are designed for, depending on what the text provides.

Why the law matters to small inventors, factories and startups

Most innovation in small and medium businesses is not a radical invention but an incremental improvement: a better part, a faster assembly method, or a modification that makes a device safer. These improvements often do not reach the patent threshold, so they remain protected by nothing but secrecy. If the new law brings accessible utility models, as its name suggests, a small workshop or a young factory may be able to protect its improvements at lower cost and in less time. But this benefit only goes to those who clearly own their innovation and who have preserved its novelty before filing.

Novelty is a condition that is easily lost. Under the current law, prior art includes everything disclosed to the public anywhere, in writing, orally, by use or by any other means, before the filing date of the application or the priority application, with exceptions set by the regulation. In other words, showing the product at an exhibition, posting a video explaining the idea, or selling it before filing may cost you protection. Likewise, if more than one person independently arrives at the same subject, protection under the current law goes to whoever filed first, so a long wait has a price.

• For startups: investors usually examine the chain of ownership of the technology, and any gap in the founders', employees' or outside developers' contracts may delay a funding round.
• For factories: improvements developed by production line technicians may become protectable assets, so their ownership must be settled in the employment contracts.
• For the individual inventor: if you are developing your idea with a partner or a funder, agree in writing on each person's share, because under the current law a joint work belongs to all of them equally unless they agree otherwise.

Employee inventions and IP assignment in the employment relationship

The current law provides that ownership of the protection document belongs to the employer, unless the employment contract provides otherwise, where its subject results from performing a contract or an obligation whose content is devoting effort to reaching it, or where the employer proves that the worker reached it only by using the facilities, means or data the work made available. This does not affect the worker's right to a special remuneration agreed by both parties or assessed by the competent committee, and any agreement depriving the worker of this right is void. An application the worker files within two years of leaving service is treated as if it had been filed during service. We do not yet know whether the new law keeps these rules as they are or amends them.

This rule may seem enough for the employer, but in practice it does not replace a written agreement, for four reasons. First, disputes are usually about the facts: was the invention within the employee's duties, and were the employer's facilities used? The agreement settles this in advance through definitions and a disclosure duty. Second, the rule concerns protection documents, while the business owns other assets that are not registered, such as trade secrets, know-how, software and documents. Third, the new law may change the details, and a clear contract reduces the impact of any change. Fourth, investors and buyers want signed evidence, not an inference from a general provision.

The situation differs with freelancers and outside developers and designers: they are not your workers, and the employee invention rule does not apply to them. Paying the fee alone is not enough in practice to prove that ownership passed to you, and the safer course is for the contract to say so expressly. If you are commissioning an outside party to do new work, the Work-for-Hire Agreement I-03 settles ownership from the start. If the innovation already exists with a developer or a former partner, the IP Assignment Agreement I-01 is the document that transfers it to your business with a clear scope and consideration.

A practical checklist until the official text is published

You do not need to wait for the text to start, because most of what follows is useful whatever the final details of the new law, since it concerns proving your ownership of your innovations and preserving their novelty. Order these steps to suit the size of your business, and consult a licensed lawyer before any filing.

1. Inventory your innovations: list the products, processes and improvements your business has developed, and classify each one provisionally as a patent candidate, a possible utility model candidate, or something protected by secrecy.
2. Preserve novelty: stop any public showing, technical publication or sale of an innovation that is a candidate for protection before consulting a specialist, and put any outside access to it under a written confidentiality agreement.
3. Document development: keep dated records of the stages of work and the names of those who actually contributed, which helps prove who reached the innovation and who owns it.
4. Review employee contracts: make sure every employee working in development, production or technology has signed a confidentiality and IP agreement such as E-08, while respecting the employee's statutory right to a special remuneration.
5. Close contractor gaps: use the Work-for-Hire Agreement I-03 for any new commission, and the IP Assignment Agreement I-01 for any earlier innovation produced by an outside party or a partner.
6. Decide between filing now and waiting: discuss with your lawyer whether to file a patent application today under the current law or wait for the new text, bearing in mind that protection goes to whoever files first.
7. Follow the official publication: watch the Umm al-Qura gazette and the Saudi Authority for Intellectual Property website, and on publication read the effective date, the transitional provisions, and the conditions and fees for utility models.
8. Set a budget: applications and protection documents carry an annual fee under the current law, so rely on the official schedule for the amounts and do not estimate them from unofficial sources.

Frequently asked questions