JAPAN Law and Practice Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise Whether information is protected under the UCPA depends primarily on whether it satisfies the three statutory requirements (secrecy management, useful - ness, and non-public status). If the owner’s secrecy management is found to be inadequate, the informa - tion is typically treated as part of the employee’s gen - eral knowledge and skills rather than a protectable corporate asset. The doctrine of “inevitable disclosure” is not recog - nised in Japan. Grounded in the constitutional free - dom to choose one’s occupation, the courts require evidence of actual or highly probable misappropria - tion rather than mere role similarity. 4.2 New Employees To mitigate misappropriation risks, Japanese employ - ers adopt a proactive compliance framework across the recruitment and onboarding stages. Pre-hiring best practices include verifying the candi - date’s existing non-compete and confidentiality obli - gations to determine appropriate placement and avoid future disputes. Interviewers should verbally caution candidates to distinguish their general expertise from former employer’s proprietary secrets, explicitly instructing them not to disclose or provide such infor - mation. During onboarding, new hires should execute a writ - ten pledge certifying that they have not retained or imported any materials – including documents or digi - tal media such as USB drives – from former employ - ers. This provides essential evidence to rebut claims of “gross negligence” under the UCPA; in Japan, a company can be held liable if it fails to exercise due care in preventing the use of misappropriated secrets brought in by the new employer. Strategically, compa - nies may assign hires to roles distinct from their previ - ous work for a set period. Ongoing training for hiring departments is also essential to ensure that these do not inadvertently solicit protected information; this is supported by strict policies prohibiting the use of per - sonal devices for business tasks.
5. Trade Secret Litigation 5.1 Prerequisites for Filing a Lawsuit
In this jurisdiction, there are no mandatory prerequi - sites or formal preliminary steps that a plaintiff must fulfil before initiating a civil lawsuit for trade secret misappropriation. A trade secret owner who believes their rights have been infringed is entitled to file a lawsuit immediately with the competent court upon discovering the alleged misappropriation. While it is common for parties to send a cease-and-desist let - ter or engage in pre-litigation negotiations to seek an early resolution, such actions are not legal require - ments for the commencement of judicial proceedings. 5.2 Limitations Period Statutes of Limitation for Injunctive Relief Under the Unfair Competition Prevention Act (UCPA), the right to seek an injunction against the continu - ous unauthorised use of trade secrets is subject to two distinct limitation periods. A short-term limita - tion period of three years applies from the moment the trade secret holder becomes aware of both the infringement and the identity of the infringer. Addition - ally, a long-term limitation period bars such claims 20 years after the commencement of the infringing act, an extension from the previous ten-year limit following the 2015 legal amendments. These specific statutory periods target the ongoing act of “use”, whereas one- time infractions such as “acquisition” or “disclosure” are governed by general tort law. Damages and Overlapping Legal Theories Claims for damages resulting from trade secret mis - appropriation are subject to both the Civil Code and the UCPA. Under general tort law (Civil Code Article 724), the right to claim damages expires three years after the victim discovers the damage and the per - petrator, or 20 years after the tortious act occurred. Furthermore, the UCPA stipulates that a plaintiff can - not seek damages for unauthorised use that occurs after the right to an injunction for that specific secret has already lapsed. In instances where the three-year tort limitation has expired, claimants may still have the option to pursue a claim for unjust enrichment, which features a longer ten-year prescriptive period commencing from the time the right became exer -
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