The Amendment to the Japanese Unfair Competition Prevention Act will come into effect on July 1 2010. This Amendment aims to expand the scope of criminal punishment for trade secret infringement cases.
Recently there has been an increase in cases that have been reported, where a company's trade secrets have been leaked. Under the current law, a person's act of using or disclosing a trade secret acquired through an unlawful or unauthorised method for the purpose of unfair competition is subject to criminal punishment. However, the following types of cases cannot be criminally charged: (i) where a company's employee discloses the company's trade secrets to an officer of a certain foreign government who is not a competitor of the company, the investigative authority faces difficulties in asserting the purpose of unfair competition; and (ii) where the investigative authority cannot obtain any evidence which indicates that a company's employee disclosed the company's trade secrets to a third party, even though he/she had acquired the company's trade secrets without the company's consent.
Considering these difficulties, the Amendment expands the scope of the requirement of purpose. Specifically in the penal provisions, the Amendment replaces "a purpose of unfair competition" with "for a purpose of gaining unjustified interest or inflicting losses on a holder of the trade secret". This enables an investigative authority to pursue criminal charges against a person who discloses another's trade secrets to a third party who is not a direct competitor, as far as the said person has the purpose of gaining unjustified interest or inflicting losses on the holder of the trade secret. In addition, the Amendment also covers the act of obtaining a trade secret through an unlawful or unauthorised method as well as using or disclosing a trade secret. This enables an investigative authority to pursue criminal charges against a person merely by evidence indicating his/her act of obtaining another's trade secret through inappropriate or unauthorized methods, even if there is no evidence indicating the disclosure of a trade secret to a third party.
The Amendment will contribute to maintaining and strengthening the protection of trade secrets and corporate competitiveness. Further, in accordance with this Amendment, the Ministry of Economy, Trade and Industry (METI) of Japan has recently revised its Trade Secret Management Guidelines, which suggest practical management approaches for trade secrets and provide reference tools for mainly small and medium enterprises.
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| Takao Asai |
Anderson Mori & Tomotsune
Izumi Garden Tower, 6-1
Roppongi 1-chome, Minato-ku, Tokyo 106-6036
Japan
Tel: +81-3-6888-1107
Fax: +81-3-6888-3107
takao.asai@amt-law.com
www.amt-law.com