JAPAN Law and Practice Contributed by: Takahiro Inoue, Tomohiro Kuribayashi, Yoshiyuki Takanashi and Daisuke Inaba, TMI Associates
Accordingly, information constituting know-how is considered to belong to the company. In addition, where know-how is embodied in works, inventions, developments or other protectable results created in the course of work, the relevant intellectual property rights may belong to, or be transferred to, the employer under applicable rules or arrangements, such as rules on works made for hire or employee invention regulations. Protection of Know-How: External Parties There is no general statutory rule under which know- how created by a contractor or joint development partner automatically belongs to the customer or to one party. Accordingly, in practice, it is advisable to specify the ownership of know-how in outsourcing agreements and similar contracts, together with the ownership of intellectual property rights, as newly conceived technical results or deliverables. 6.4 Protection Through Contract and Confidentiality In Japan, contractual protection of know-how is pri- marily intended to protect know-how as confidential information. Accordingly, it is mainly achieved through non-disclosure agreements, as well as confidentiality clauses, non-use provisions, return and destruction provisions, and ownership-of-results provisions in outsourcing agreements and similar contracts. 6.5 Licensing and Assignment Know-How Licence and Assignment Agreements In Japan, know-how is commonly the subject of con- tractual assignment or licensing arrangements. It may be transferred or licensed by contract even where it does not qualify as an “invention” under the Patent Act or as a “trade secret” under the UCPA. Key Considerations for Know-How Agreements The terms of know-how-related agreements are often based on the terms used in patent assignment or licence agreements, or trade secret assignment or licence agreements, while taking into account the particular characteristics of know-how. In particular:
• because know-how is not a registered exclusive right, the subject matter of the know-how should be clearly identified in the agreement; and • the agreement should expressly provide for meas- ures to ensure that the know-how does not lose its non-public nature even after termination of the agreement. In Japanese practice, notarisation or similar formali- ties are not generally required for transactions involv- ing know-how. 6.6 Reverse Engineering Under Japanese law, in principle, reverse engineering of a lawfully acquired product that is publicly available is generally understood not to be unlawful (Patent Act Article 69, Paragraph 1; Copyright Act Article 30-4). However, between contracting parties it is possible to include provisions prohibiting reverse engineering, disassembly, de-compilation, dismantling, analysis or other similar acts. Such provisions may, in principle, be valid and enforceable. Relationship With Trade Secrets In relation to the non-public nature requirement for trade secret protection, if the relevant information can be easily obtained through reverse engineering, the information may not satisfy the non-public nature requirement and may therefore not be protected as a trade secret. It is understood that purchasing a commercially available product and identifying information that may constitute a trade secret, such as component specifications or assembly methods, through reverse engineering does not constitute an act of improper acquisition of a trade secret. 7. Data, AI and Emerging IP Issues 7.1 Data Rights and Database Protection Individual data is not protected by copyright. How- ever, a database may be protected by copyright if its selection or structure of constituent information is creative (Article 12, Paragraph 12).
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