Written by: Caldwell

In Japan, a recent amendment to the trade secrets law has set the stage for a legal landscape that promises significant benefits for intellectual property (IP) owners. The amended law, which came into effect on December 25, 2023, introduces key changes aimed at bolstering the protection of trade secrets and empowering companies to assert their rights more effectively. As a result, the amended law is poised to spark a surge in litigation that could lead to substantial payouts for companies in the form of royalties, injunctions, and compensation for lost profits.

The amendment expands the scope of protection for trade secrets, bringing Japan’s legal framework more in line with international standards. As highlighted in a recent article from IAM Media, “the most important change to the Unfair Competition Prevention Act (UCPA) broadens the scope of who can be held liable for trade secrets breaches. In particular, the update expands the presumption of unjust use of trade secrets under Article 5-2. Previously, this article was limited to only malicious “acquirers” of trade secrets, such as industrial spies or people who acquired the information knowing it had been obtained through improper means.” [1] This revised law broadens the definition of trade secrets to include a wider range of acquirers and confidential information, such as technical know-how, business strategies, and customer lists. This expansion not only provides greater protection for companies across various industries but also serves as a deterrent to potential infringers.

Moreover, the amended law introduces enhanced remedies for trade secret holders who fall victim to misappropriation. In addition to seeking damages for actual losses suffered, aggrieved parties can now pursue compensation for lost profits—a significant development that strengthens the deterrent effect of the law.

In conclusion, Japan’s bolstering of its trade secrets law represents a significant step forward for IP protection in the country, with the potential to fuel a wave of litigation aimed at safeguarding valuable intellectual property assets. As companies navigate the evolving legal landscape, proactive measures to protect and enforce their trade secrets will be essential to capitalize on the opportunities presented by these legal reforms and secure their competitive advantage in the marketplace.

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[1] Maia Biermann, Japan’s bolstering of trade secrets law set to benefit IP owners, iam media, Apr. 23, 2024, https://www.iam-media.com/trade-secrets/article/japans-bolstering-of-trade-secrets-law-set-benefit-ip-owners.