JAPAN Law and Practice Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
5.11 Cost of Litigation The primary costs of trade secret litigation in Japan basically consist of court filing fees and attorney fees. As noted in 5.3 Initiating a Lawsuit , the filing fee is calculated based on the total amount of the claim and must be paid when the complaint is filed. While each party generally bears its own attorney fees, a suc - cessful plaintiff may recover a portion of these costs – typically around 10% of the awarded damages – as part of the final judgment in tort-based cases. Regarding fee structures, success-based or contin - gency fee arrangements are legally permitted and used in various types of disputes. However, they are not yet considered standard practice specifically within the field of trade secret litigation due to the complexity and length of these proceedings. Litigation financing is not prohibited by Japanese law and has been gradually gaining traction within the legal market. Despite this growth, it remains relatively uncommon for trade secret disputes at this stage. Most litigants continue to fund their legal actions through their own resources, although third-party funding is an available option for those looking to manage the financial risks of protracted litigation. Trade secret trials in Japan are decided exclusively by professional judges, as the Japanese civil justice system does not utilise a jury system for civil litigation. Judges act as the sole finders of fact, and are respon - sible for all legal determinations regarding the case. 6.2 Trial Process The Structure of Proceedings Trade secret trials in Japan proceed through a com - bination of written preparatory pleadings and oral arguments conducted during court sessions. While legal and factual arguments are primarily developed through these documents, the court conducts wit - ness examinations to determine the facts of the case. These examinations allow judges to hear testimony directly from witnesses regarding the specific issues identified during the earlier stages of the litigation. 6. Trial 6.1 Bench or Jury Trial
Public and Private Phases The trial process is generally divided into an issue- management phase and a fact-finding phase. While oral arguments and witness examinations are prin - cipally held in open court, the process of organising issues and evidence is typically conducted through private preparatory proceedings. This allows the par - ties and the court to refine the focus of the dispute before the formal examination of witnesses begins. Typical Duration A trade secret lawsuit in the court of first instance generally takes between one and two years to reach a conclusion. The complexity of identifying the specific trade secret and proving the act of misappropriation often contributes to this timeline. Once the court has completed its examination of the evidence and wit - nesses, it will issue a final judgment based on the gathered facts and legal arguments. 6.3 Use of Expert Witnesses Expert testimony and opinions are permitted in Japa - nese trade secret litigation through several distinct forms. These include appraisals by court-appointed experts ( kanteinin ), the submission of expert opinion reports by the parties, and oral testimony from expert witnesses. While reports submitted directly by parties are treated as private documentary evidence, court- appointed appraisals serve as a more formal eviden - tiary mechanism for the judge. The process for using court-appointed experts involves a party filing a motion that specifies the facts to be proven and the technical matters to be appraised. Under Article 8 of the UCPA, the court may order an appraisal for matters necessary to calculate damages, and parties are legally obligated to explain relevant details to the appraiser. This ensures that the court has access to accurate technical or financial data when determining the impact of trade secret mis - appropriation. There are no specific statutory guidelines that dictate which issues may be the subject of expert testimony, allowing for flexibility based on the technical complex - ity of each case. The costs associated with engaging experts vary significantly depending on the scope and depth of the analysis required.
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