JAPAN Law and Practice Contributed by: Miki Goto, Ryo Murakami and Akihito Ishii, Anderson Mori & Tomotsune
3. Preventing Trade Secret Misappropriation 3.1 Best Practices for Safeguarding Trade Secrets The Ministry of Economy, Trade and Industry (METI) has issued a Guideline on the Manage - ment of Trade Secrets, which demonstrates the minimal standard required to receive protection under the UCPA. Although the guideline recognises that the required measure would vary depending on the circumstances, it gives the following as examples of typical protective measures to be employed for the media containing trade secrets: • in general – distinguishing trade secrets from other information; • paper documents – confidentiality markings, storage in lockable cabinets or safes; • electronic files – markings on media, file names and the content of electronic files, locking the storage of media, password pro - tection, access authorisation control; • trade secrets adhered to items such as manu - facturing equipment, prototypes, or moulds – provide “do not enter/authorised persons only” signs, control entrance to the facility, prohibit photos; and • knowledge of employees – enable visibility by creating written lists and descriptions of trade secrets. In addition to such measures, it is also advis - able to: • implement internal information security poli - cies and regulations; • track use, transmission and copy of confiden - tial information;
• only granting access to those that are in actual need of access to the information; • ensure that employees have executed an employment agreement that contains confi - dentiality clauses, or a separate confidential - ity agreement; • ensure execution of confidentiality agree - ments with business partners; • encourage employees not to leave confi - dential information on desks or other places visible from outside; and • respond to information leakage swiftly. 3.2 Exit Interviews Exit interview practices shall vary by the individ - ual employers, but it is common for an employer to request the employee to submit a covenant confirming the confidentiality obligations of the employee upon departure. Such covenant often includes a description of the confidential infor - mation, including trade secrets, that the employ - ee had access to during its employment. It may also include non-competition obligations, which typically restrict the employee from engaging in competing business for a term of around six months to 24 months. However, the validity of such non-competition covenant or agreement is strictly reviewed by the court based on its rea - sonableness. 4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise It is recognised in court decisions that employ - ees shall not be barred from utilising the knowl - edge and skill obtained through the work per - formed by the employee during employment if it were of a universal nature, and would have been obtained by the employee if it engaged in
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