JAPAN Trends and Developments Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
Introduction Sections 1 to 5 of this article will introduce the lat - est trends regarding the protection of trade secrets in Japan. Section 6 will explain the practical responses required of corporations during ordinary times and emergencies. 1. Legislative Status Protection of trade secrets under the Unfair Competition Prevention Act In Japan, the protection of trade secrets is provided for in the Unfair Competition Prevention Act (UCPA). According to the UCPA, a “trade secret” is defined as “technical or business information useful for business activities, such as production or sales methods, that is managed as a secret and is not publicly known”. If a trade secret is infringed upon, civil remedies, such as injunctions to stop or prevent the infringement and claims for damages, are available. In addition, criminal penalties are prescribed for malicious conduct. Crimi - nal cases have shown an increasing trend in recent years. Full implementation of the 2023 amendment The amended UCPA, which came into full effect on 1 April 2024, and is outlined below, has strengthened legal mechanisms for addressing the risk of leakage of confidential information in the context of digitalisa - tion and global supply chains, and clarifies measures against cross-border infringement. • Lowering the evidentiary burden for plaintiffs; expansion of the presumption of “use” (Article 5-2) A presumption of “use” now applies if a defendant is in a position to have access to a technical trade secret and is producing related goods. Under the Japanese Code of Civil Procedure, where a discov - ery system such as that of the US does not exist, this resolves part of the “black box” problem in the manufacturing industry, where proving internal pro - cesses was previously more difficult. It is expected that a sense of “normative awareness” – ie, that one must not infringe on the trade secrets of others even under black-box conditions – is to become the standard. • Increase in the amount of damages A punitive dam - ages system has not been adopted in Japan. An institutional reform was introduced whereby com -
pensation could be increased, and it was under - stood that a plaintiff could benefit from the appli - cation of the presumption of damages provisions within the scope of its own production and sales capacity, but could not claim damages for the por - tion exceeding that scope. Through this legislative amendment, it has become possible to claim dam - ages even for the sales volumes exceeding one’s own production and sales capacity by calculating a “reasonable license fee” for that excess. This has enabled even small technology companies to seek substantial damages against large corporations, regardless of their own production scale. • Extraterritorial application in civil matters It has been explicitly provided that, when trade secrets managed in Japan are illegally acquired or used overseas, not only criminal law but also civil law – specifically the application of Japanese law and the international jurisdiction of Japanese courts – will apply (provisions for criminal matters had already been made prior to the 2023 amendment). This has made it possible for Japanese companies to take legal action from within Japan against the theft of trade secrets occurring overseas. 2. Noteworthy Trade Secret Leakage Incidents Since 2025 Among the incidents concerning trade secrets since 2025, some have drawn significant social attention within the contexts of, for example, economic secu - rity, financial industry governance, and the relationship with freedom of the press. An overview of the major cases is given hereafter. Cases of trade secret acquisition involving foreigners or foreign companies Cases suggesting relationships with foreign com - panies or foreign government officials stand out. An instructive example is the National Institute of Advanced Industrial Science and Technology (AIST) case in February 2025. AIST is a Designated National Research and Development Agency and one of the largest public research institutions in Japan. In this case, the Tokyo District Court sentenced a former for - eign researcher involved in leaking advanced technol - ogy to a Chinese company to two years and six months of imprisonment, suspended for four years, and a fine of JPY2 million. The court condemned the incident as
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