JAPAN Trends and Developments Contributed by: Seiro Hatano, Rikiya Sato, Keiichiro Umino and Tomohiro Kuribayashi, TMI Associates
of proof and risk of the awarded damages being insignificant. Furthermore, the increasing com - plexity and internationalisation of cases in recent years also underlies the hesitation towards tak- ing legal action. In light of these issues, the UCPA was amended in 2023 to introduce a number of systems making it easier to use civil court pro - ceedings in trade secret infringement cases (the “2023 Amendment” ). The following three points should be noted as being particularly important under the 2023 Amendment. Expansion of presumption of trade secrets misappropriation As mentioned above, the Japanese Civil Proce - dure Act does not provide for a strong system of evidence collection comparable to the discovery process, which can complicate the process of proving misappropriation of trade secrets as this tends to occur privately, resulting in cases where trade secret owners abandon legal proceedings. In numerous recent court cases, the court dis - missed the plaintiff’s claims, holding that misap - propriation of trade secrets was not sufficiently proven. With awareness of this hurdle, the UCPA pro - vides for presumption of the defendant’s use of trade secrets with respect to certain technical information, and the 2023 Amendment expand - ed the scope of application of this presumption in order to ease the plaintiff’s burden of proof. Under the former UCPA, the presumption of misappropriation of technical information by a defendant was only applied in cases of high maliciousness (such as so-called industrial espi - onage), but under the 2023 Amendment the pre - sumption of misappropriation is also applied to: • persons who originally had access to the trade secret; or
• persons who were aware that the trade secret was illegally acquired but failed to relinquish the acquired trade secret. Expansion of presumption of damages amount In Japan, the amount of damages awarded in trade secret infringement cases tends to be lower than in other jurisdictions (as mentioned above), partly because punitive damages are not awarded, leading to some parties’ hesita - tion in taking legal action against trade secret infringement in Japan. In this respect, the UCPA provides for the presumption for the amount of damage suffered by the plaintiff due to misap - propriation of trade secrets. Under the former UCPA, the portion exceeding the production and sales capacity of the plain - tiff was not presumed to be the plaintiff’s dam - ages, which was one reason why the amount of awarded damages tended to be lower. The 2023 Amendment aims to increase the amount of damages, and presumes that the amount equivalent to reasonable licence fees is appro - priate as the damages amount for the portion exceeding the production and sales capacity of the plaintiff. Clarification of governing law and jurisdiction As trade secret infringement cases are becom - ing increasingly international, it is still unclear whether or not owners of trade secrets can be tried in a Japanese court under Japanese law in cases where (for example) the trade secrets managed in Japan are taken and misused out - side Japan. This is another important reason behind the reticence in taking legal proceedings. In this respect, the 2023 Amendment clarifies that if civil litigation is brought by the owner of trade secrets conducting business in Japan,
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