JAPAN Trends and Developments Contributed by: Seiro Hatano, Rikiya Sato, Keiichiro Umino and Tomohiro Kuribayashi, TMI Associates
starts largely depends on the discretion of the police, such as regards how serious the case is considered to be, and the police availability at the relevant time. Therefore, from the perspec - tive of efficient use of criminal proceedings, it is necessary to prepare a persuasive complaint and to provide as much evidence as possible to explain how serious the case is and how urgent the investigation is. Otherwise, it may take a very long time to initiate such investigation (in some cases, more than six months or a year), or a case may even fail to be established in the first place. Therefore, in cases where records indicate that misappropriation of trade secrets has taken place but where no concrete damage has yet arisen, or in cases where it is not clear that the suspect’s use of trade secrets is evident, owners of trade secrets should not overly rely on police action and criminal proceedings. In such cases, it is more efficient and beneficial to minimise the damage through civil measures. Dealing With Employees A recent survey shows that most trade secret infringements in recent years have been caused by employees taking confidential information out of the company. In particular, there are many cases of employees illegally copying and tak - ing information with them when they leave the company. In Japan, employees are obliged to maintain the confidentiality of company infor - mation through employment regulations, non- disclosure agreements (NDAs) or confidentiality undertakings.
The obligation to maintain the confidentiality of company information after leaving the com - pany is basically not recognised unless it is clearly stated in the employment regulations or NDA. It should be noted that, while disciplinary action could be taken against the employees for breaching confidentiality obligations, Japa - nese labour law provides strong protection for employees against employers, even in cases of trade secret infringement. Therefore, the degree of disciplinary action should be carefully consid - ered, and it should be borne in mind that it might not be permissible to summarily dismiss those employees who have committed trade secret infringement. Strategy Against Trade Secret Infringement in Japan The 2023 Amendment strengthened legal pro - tections for confidential information, leading to an increase in both civil and criminal cases involving trade secret infringement. However, legal protection is not always available due to issues related to confidentiality or evidence col - lection. Therefore, in order to protect trade secrets and efficiently pursue civil or criminal actions against trade secret infringement, it is crucial to review security management practices to ensure that the information is adequately treated as confi - dential. In the event of breach of confidentiality, it is imperative to verify the facts and gather as much evidence as possible as the first step, and the appropriate actions should then be contem - plated in light of the legal protections available for the trade secrets.
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