JAPAN Law and Practice Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
While a specialised expert inspection system exists under Japanese patent law, this mechanism is cur - rently not available for trade secret litigation. 5.8 Maintaining Secrecy While Litigating Protective Orders and Confidentiality Agreements To protect sensitive information during proceedings, the court may issue a protective order under Article 10 of the UCPA. This order prohibits parties, their rep - resentatives, and others from using the trade secret for purposes other than the litigation or disclosing it to unauthorised individuals. Violating such an order carries criminal penalties. In addition to formal orders, parties often enter into private confidentiality agree - ments under the guidance of the court to manage the exchange of sensitive data. Restricting Access to Case Records Under Article 92 of the Code of Civil Procedure, par - ties can request that the court restrict third-party access to case records if they contain trade secrets. This mechanism ensures that the general public or competitors cannot inspect or copy confidential docu - ments filed with the court. Furthermore, as mentioned above, the UCPA allows for “in-camera” proceedings where the judge alone reviews certain documents to determine if their disclosure is necessary for the case. This allows the court to evaluate the evidence with - out exposing the secret to the opposing party or the public. Closed Trial Proceedings While trials are generally public, Article 13 of the UCPA provides a specific exception for trade secret cases. If a court unanimously determines that disclosing a trade secret in open court would significantly harm a party’s business activities, it may order the oral argu - ments to be closed to the public. This serves as a vital safeguard for maintaining the commercial value of the secret while still ensuring a fair judicial process. 5.9 Defending Against Allegations of Misappropriation Challenging the Status of Trade Secrets Defendants often argue that the contested informa - tion fails to meet the three statutory requirements for protection under the UCPA: secrecy management, utility, and non-public nature. A common defence is
to demonstrate that secrecy management was inad - equate, such as by showing that access controls were insufficient or that employees could not objectively identify the information as confidential. Additionally, a defendant may claim that the information was already in the public domain or was so vaguely defined by the plaintiff that it does not qualify for legal protection. Denial of Misappropriation and Subjective Intent A defendant may also deny the act of misappropria - tion by proving that they developed the information independently or acquired it through legitimate, non- infringing channels. In cases where specific intent is required, defendants can argue the absence of an “intent to gain unfair profit or cause harm” or a lack of knowledge regarding any prior wrongful disclosure. Proving that the acquisition occurred in good faith without gross negligence is a critical defence against claims involving third-party disclosures. 5.10 Dispositive Motions Japanese civil procedure does not recognise a sum - mary judgment system similar to the one found in the US. Instead, the court typically moves toward a final decision by organising issues and examining evidence through a series of hearings. While parties cannot seek a summary disposition via a motion, the court frequently encourages settlement once the pri - mary legal and factual points have been clarified. Dur - ing this process, judges often share their preliminary views on the merits of the case to facilitate a voluntary resolution between the parties. In complex litigation, the court may issue an interlocu - tory judgment to resolve a specific element of the dis - pute, such as the existence of an infringement, before determining the amount of damages. This phased approach allows the court to focus on the liability of the defendant first, which can significantly streamline the overall proceedings. If the court determines that no trade secret misappropriation occurred during this initial phase, it will then proceed to issue a final judg - ment dismissing the claim. This mechanism provides a structured way to address critical disputes without requiring an immediate decision on all aspects of the litigation. However, in practice, the issuance of an interlocutory judgment remains relatively rare in trade secret litigation.
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