JAPAN Law and Practice Contributed by: Takahiro Inoue, Tomohiro Kuribayashi, Yoshiyuki Takanashi and Daisuke Inaba, TMI Associates
• contractual remedies, where the misappropria- tion also constitutes a breach of an NDA or other contract; • disciplinary action, where the misappropriating party is an employee, depending on the circum- stances; • injunctive relief under the UCPA, including an injunction against the infringing conduct, destruc- tion of infringing goods, removal of facilities, or other measures necessary to suspend or prevent the infringement (Article 3); and • damages under the UCPA (Article 4). Protection of Trade Secrets in Litigation The UCPA provides mechanisms to preserve the con- fidentiality of trade secrets during litigation, including: • a confidentiality protective order under Article 10; and • restriction of public access to examination of par- ties and witnesses under Article 13. A confidentiality protective order prohibits the use of trade secrets contained in litigation materials for pur- poses other than the conduct of the litigation, and pro- hibits the disclosure of such trade secrets to persons who are not subject to the order. Restriction of public access to examination of parties and witnesses is an exceptional mechanism under which all or part of the examination may be conducted in closed proceedings. Criminal Sanctions Criminal sanctions are also available for trade secret misappropriation. Among acts of trade secret misap- propriation constituting unfair competition, particu- larly malicious types of conduct may be punishable as criminal offences involving trade secret misappro- priation. For individuals, the penalties may generally include imprisonment for up to ten years, a fine of up to JPY20 million, or both. For aggravated offences involving, for example, use of the trade secret outside Japan, the maximum fine may be increased to JPY30 million.
Corporations may also be subject to criminal fines under the dual liability provisions. The maximum corporate fine may be up to JPY500 million for ordi- nary offences, and up to JPY1 billion for aggravat- ed offences involving, for example, use of the trade secret outside Japan. 6. Know-How 6.1 Definition and Legal Basis of Know-How The term “know-how” is not defined under Japanese statutory law. In practice, it is often used to refer broadly to non-public information that is useful for business activities. Know-how may include information that qualifies as an “invention” under the Patent Act and may therefore be the subject of a patent application. It may also include information protected as a trade secret under the UCPA, or information designated contractually as “know-how” by the parties. Accordingly, know-how is a more abstract concept that may encompass these various types of information. 6.2 Protectability Requirements and Scope Because know-how is not a legally defined concept, there are no statutory requirements that must be sat - isfied for information to be protected as know-how. However, given the nature of know-how, it is generally understood that the information must be non-public. 6.3 Ownership, Creation and Employee Know-How Ownership of Know-How If the know-how is created in the course of the employer’s business operations and constitutes the employer’s confidential business information, the employee owes a duty under the employment con- tract to maintain the confidentiality of the employer’s confidential information, and not to use or disclose it without authorisation. In addition, materials, data and other records created or obtained in the course of work may be subject to obligations to deliver, return or delete them upon ter- mination of employment, depending on the work rule or other applicable arrangements.
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