JAPAN Law and Practice Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
7. Remedies 7.1 Preliminary Injunctive Relief
Scope of Relief and Ancillary Measures (Recall/ Disposal) While the UCPA does not provide for a government- mandated recall of infringing products, Article 3, para - graph 2 empowers claimants to seek ancillary meas - ures, as follows. • Disposal of infringing items – the court can order the destruction of products resulting from misap - propriation or the media (such as USB drives or digital files) containing the secrets. • Removal of facilities – claimants may seek the removal of equipment used to commit infringe - ment. Restrictions on Subsequent Employment Injunctive relief under the UCPA typically targets spe - cific infringing acts rather than an individual’s general right to work. Therefore, a court will not issue an order broadly barring an employee’s subsequent employ - ment solely because that employee possesses trade secrets. However, restrictions may be enforced based on contractual non-compete agreements, provided they are consistent with public policy. To be valid, such restrictions must be reasonable in terms of: • purpose – protecting a legitimate business interest; • scope – reasonable duration, geographic area, and job description; and • compensation – presence of adequate considera - tion for the restriction; precedents exist where courts have enjoined former employees from solic - iting specific clients or engaging in specific com - peting roles for a limited period (eg, two years). Limitations on Duration Under Article 15 of the UCPA, the right to a perma - nent injunction is subject to a statute of limitations that expires either three years after the claimant becomes aware of the infringement and the infringer’s identity, or 20 years after the infringing act commences. 7.4 Attorney’s Fees Reasonable attorney fees are recoverable in Japan as a component of tort-based damages under the Civil Code and the UCPA. In practice, the amount awarded is not based on the actual fees paid by the plaintiff;
Preliminary injunctions are available under the Civil Provisional Remedies Act. To obtain relief, a claimant must provide a prima facie showing: (i) a valid right to an injunction under the UCPA; and (ii) “necessity”, such as imminent danger or substantial detriment. Courts almost always require the claimant to post a bond to compensate the defendant if the injunction is later found to be unjustified. The extent of the bond is determined case-by-case on the basis of the defendant’s potential losses and the strength of the claimant’s case; while often starting at several million yen, it can escalate significantly for high-stakes disputes. 7.2 Measures of Damages The UCPA provides three primary measures for calcu - lating damages, as follows. • Lost profits – calculated as the infringer’s sales volume multiplied by the der’s profit per unit. Fol - lowing the 2023 amendments, this applies to all trade secrets and extends to services. Crucially, for the portion of the infringer’s sales that exceeds the owner’s production capacity, the owner can now claim a royalty-equivalent amount (Article 5 (1)(ii)). • Infringer’s profits – the infringer’s profits are pre - sumed to be the amount of the owner’s loss. • Reasonable royalties – the owner can claim an amount equivalent to a licensing fee. The 2023 amendments explicitly clarify that courts may consider a higher royalty rate that would likely be determined if negotiated under the premise that an infringement had occurred. Punitive damages are not available in Japan. 7.3 Permanent Injunction Under the UCPA, a trade secret owner whose busi - ness interests are prejudiced – or are at risk of being prejudiced – by misappropriation can seek a perma - nent injunction.
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