JAPAN Law and Practice Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
Abe, Ikubo & Katayama GranTokyo South Tower, 1-9-2 Marunouchi, Chiyoda-ku, Tokyo 100-6613, Japan Tel: +81 358 603 640 Fax: +81 358 603 639 Email: makoto.hattori@aiklaw.co.jp Web: www.aiklaw.com
1. Legal Framework 1.1 Sources of Legal Protection for Trade Secrets The Unfair Competition Prevention Act (UCPA) is the primary statute for the protection of trade secrets in Japan. Under the Civil Code of Japan, only claims for dam - ages are permitted as a remedy for torts, and claims for injunctive relief are not recognised. As a special - ised legal framework supplementing Japan’s Civil Code, the UCPA grants the right to seek an injunction in addition to the right to claim damages in connection with acts of unfair competition. Acts infringing upon trade secrets may constitute a breach of contract (non-performance of obligations) under the Civil Code, for example, as violation of a Non-Disclosure Agreement (NDA). 1.2 What Is Protectable as a Trade Secret In Article 2, paragraph 6 of the UCPA, a “Trade Secret” is defined as “technical or business information useful for business activities, such as manufacturing or mar - keting methods, that is kept secret, and is not publicly known”. Specifically, for technical or business information to be protected as a trade secret under the UCPA, the following three requirements must be satisfied. • Secret Management – the information must be managed as a secret. A company must implement
economically reasonable measures according to the specific circumstances, to the extent that its intent to manage the information as secret is clear to employees and business partners. Specific methods are provided in 1.5. Reasonable Meas- ures . • Usefulness – the information must be technical or business information useful for business activities. Information must be used or utilised in business activities, or useful for saving costs or improving management efficiency. Generally, most informa - tion is deemed to satisfy the requirement of Useful - ness unless it lacks a legitimate interest deserving of legal protection, such as information contrary to public policy (eg, records of tax evasion or bribery). • Non-Public Nature – the information must not be publicly known or easily obtainable. Specifically, it must not be available to the general public out - side the control of the trade secret holder, such as being described in publications available through reasonable efforts. 1.3 Examples of Trade Secrets Article 2, paragraph 6 of the UCPA describes a trade secret as “technical or business information useful for business activities, such as manufacturing or market - ing methods”. Major types of information recognised as trade secrets in Japanese judicial precedents is as follows: • customer information (including customer names, addresses and sales data); • supplier information and supplier details;
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