JAPAN Law and Practice Contributed by: Takahiro Inoue, Tomohiro Kuribayashi, Yoshiyuki Takanashi and Daisuke Inaba, TMI Associates
5.2 Reasonable Measures and Confidentiality Requirements for Secrecy Management In order for the secrecy management requirement to be satisfied, it is generally understood that meas- ures for managing the information as secret must be taken, such as access restrictions or “Confidential” markings, to such an extent that employees and oth- er persons who may lawfully and practically access the information can recognise that the information is intended by the company to be kept secret. The specific nature and level of secrecy management measures required will vary depending on the size of the company, the nature of its business, the duties of its employees and other relevant persons, the nature of the information, and other relevant circumstances. The mere fact that information has been disclosed to employees or business partners does not, by itself, mean that secrecy management is lost. The key issue is whether the company has taken sufficient measures to create an awareness that the information should be treated differently from ordinary information. 5.3 Misappropriation of Trade Secrets Trade Secret Misappropriation The UCPA enumerates acts that constitute misappro- priation of trade secrets. Broadly speaking, these acts may be categorised as follows: • acquiring, using or disclosing a trade secret with- out authority (Section 1, Article 2, Paragraph 1, Item 4); • acquiring, using or disclosing a trade secret while knowing, or being grossly negligent in failing to know, that it was acquired by improper means (Section 1, Article 2, Paragraph 1, Items 5 and 8); • using or disclosing a trade secret after sub- sequently becoming aware, or through gross negligence failing to become aware, that it was acquired by improper means (Section 1, Article 2, Paragraph 1, Items 6 and 9); • where a trade secret has been disclosed by the trade secret holder, using or disclosing the trade secret for the purpose of obtaining an improper benefit or causing damage to the trade secret holder (Section 1, Article 2, Paragraph 1, Item 7); and
• transferring goods produced through the improper use of a trade secret, knowing, or through gross negligence in failing to know, that they were produced through such improper use (Section 1, Article 2, Paragraph 1, Item 10). Notably, liability may attach even where the requisite knowledge or gross negligence arises after acquisi- tion, rather than at the time of acquisition itself. Please see 5.5 Enforcement and Remedies regarding There is no fixed statutory term of protection for trade secrets: trade secret protection continues to apply as long as the relevant requirements are satisfied. However, an injunction claim against the improper use of a trade secret may no longer be exercised by operation of the statute of limitations if: • three years have passed from the time when the trade secret holder became aware of both the improper use and the identity of the person engag- ing in such conduct; or • 20 years have passed from the commencement of the improper use (UCPA Article 15). Protection in the Event of Accidental Disclosure If a trade secret is accidentally disclosed to a third par- ty, that fact alone does not necessarily mean that the information ceases to be a trade secret. However, if the three requirements described in 5.1 Legal Frame- work and Protectable Information are no longer satis- fied, the information may no longer be protected as a trade secret. For example, if an employee accidentally publishes trade secret information on the internet and makes it accessible to anyone, the information may lose its non-public nature and may no longer be eligi- ble for trade secret protection thereafter. 5.5 Enforcement and Remedies Civil Remedies Where a trade secret has been misappropriated, the trade secret holder may seek civil remedies, including: the remedies available under the UCPA. 5.4 Duration and Loss of Protection Duration of Trade Secret Protection
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