JAPAN Trends and Developments Contributed by: Makoto Hattori, Rikita Karakawa, Wataru Takagishi and Taku Shibazaki, Abe, Ikubo & Katayama
within terminals, and reliable data deletion and its evidence at the time of resignation or termination of contract. Furthermore, regarding those with side jobs or multiple jobs, an interpretation can be made that both measures to prevent the bringing in of secrets from other companies and measures to prevent the removal of one’s own secrets should be clarified through contracts and operations. • Use of external clouds – the revised guidelines clarify the view that, even when using an external cloud to store and manage trade secrets, as long as the information is managed as a secret, secrecy management is not immediately lost. Even under cloud use, appropriately restricting persons with access rights through access control based on hierarchical restrictions is envisioned as a manage - ment measure, showing the importance of techni - cal control suited to the cloud environment. • Non-Publicity – regarding non-publicity, in light of cases where trade secrets are leaked onto the dark web due to attacks such as ransomware, the view is explicitly stated that, even if published on the dark web, non-publicity is not immediately lost by that fact alone. 5. Economic Security and Trade Secrets Management of confidential information regarding economic security for Japanese companies from 2025 onward is multi-layered institutionally but, from the perspective of direct impact on corporate practice, (i) the security clearance system based on the “Act on the Protection and Utilization of Critical Economic Security Information” and (ii) the response to the sys - tem for non-disclosure of patent applications will be important points of discussion. (i) Security Clearance System – the Critical Economic Security Information Protection and Utilization Act was enacted and promulgated in May 2024 and came into effect on 16 May 2025. The purpose of the Act is to designate certain information regarding critical economic foundation (including critical infrastructure and supply chains) that needs to be kept particularly secret to ensure Japan’s security as “Critical Econom - ic Security Information”, and to establish a framework that can provide such information to business opera - tors conducting activities that contribute to ensuring Japan’s security, while taking protective measures to
prevent the leakage of said information. For business operators who may receive Critical Economic Secu - rity Information from administrative organs, the sys - tem provides for “Eligible Contractor” status for those whose information protection systems meet certain standards. Furthermore, a system design is adopted where the state conducts suitability assessments” for persons who need access to said information to limit handlers. Therefore, companies that may be subject to this are required to prepare controls such as internal rules, education and training, physical and technical management (access control, etc), log acquisition and auditing, and incident response, including account - ability to administrative organs. (ii) System for non-disclosure of patent applications the system for non-disclosure of patent applications based on the Economic Security Promotion Act com - menced on 1 May 2024. When an invention that, if made public, is highly likely to cause a situation that impairs the security of the nation and its citizens through actions taken from the outside, is included in a patent application’s description, etc, then patent procedures (eg, publication of the application, deci - sion to grant a patent, and decision of refusal) are deferred through “security designation”. After secu - rity designation, disclosure (including of the content of the invention) is restricted, and implementation of the invention is, in principle, prohibited. Therefore, companies should implement appropriate manage - ment measures such as information control before and after application, internal approval flows for over - seas transfers (including overseas bases and foreign applications), access restrictions, and preservation of logs and evidence. 6. Practical Responses Required of Corporations in Japan Based on the above, practical responses regarding secret management required of corporations in cur - rent-day Japan are organised into measures in ordi - nary times and responses in emergencies. Responses in ordinary times • Identification and classification of information assets – effective trade secret management begins with accurately identifying what information a company possesses. Companies should create an
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