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Cabinet Decision on the Bill for the Act of the Partial Revision of the Unfair Competition Prevention Act

On March 13, 2015, the Cabinet decided to approve the Bill for the Act for the Partial Revision of the Unfair Competition Prevention Act. The bill will be submitted to the 189th ordinary session of the Diet.

1. Purpose of the bill

Regarding essential technologies and confidential information of Japanese companies, a source of national wealth, stipulated as “trade secrets” in the Unfair Competition Prevention Act, many incidents have recently been reported concerning the outflow of such information to other domestic and overseas entities one after another.

The bill aims to revise part of the Unfair Competition Prevention Act so as to address such incidents involving huge damage of losses due to such outflow and sophisticated methods associated with cyber space expansion, as well as to enhance the deterrence against infringement of trade secrets from the perspectives of criminal and civil charges.

2. Outline of the bill

1) Enhanced institutional deterrence against infringement of trade secrets

The revised act is to stipulate the following measures to enhance institutional deterrence against the infringement of trade secrets from the perspectives of criminal and civil charges, taking into consideration previous incidents in which companies suffered huge losses, persons that infringed the companies’ interests gained benefits, and infringers received a huge amount of payments:

  1. Raising fines, confiscating criminal proceeds, and other measures will be taken. In addition, the act of using a Japanese company’s trade secret in other countries or the act of acquiring and leaking such a trade secret, intending to use it overseas, is to be subject to a heavier penalty (heavier penalty for infringement in overseas countries), considering the adverse impact on employment and subcontracting companies (criminal charge).
    Raising fines
    Individual 10 million yen => 20 million yen (30 million yen in case of infringement in overseas countries)
    Legal person 300 million yen => 500 million yen (1 billion yen in case of infringement in overseas countries)
    Furthermore, the revised act is to stipulate the provisions for confiscating criminal proceeds targeting individuals and legal persons and those for related proceedings (preservation and other proceedings).
  2. Crime of infringement of trade secrets will be included in a crime not requiring a formal complaint (criminal charge).
  3. To relieve the plaintiff’s burden in submitting evidence in a civil suit (claims for compensation, etc.), the revised act is to newly create the provisions for allowing the plaintiff to estimate the defendant’s use of trade secrets of the plaintiff (civil charge).
    Specifically, only when the plaintiff provides proof that the defendant has improperly acquired a trade secret of the plaintiff or that the trade secret is related to a method of producing goods,* the products for which the defendant is suspected of having used the trade secret are estimated to be those manufactured by the defendant using the trade secret.
    *Note: Such goods include designs but exclude products not related to a method of manufacturing goods, e.g., sales manuals.
  4. The revised act is to prohibit assignment, import and export of products infringing trade secrets, to register the products in the list of suspension (civil charge), and to make such case subject to a criminal charge (criminal charge).
    *Note: This provision excludes a case that a person who was without knowledge that the products infringed trade secrets and committed no gross negligence in not knowing it.

2) Improving the scope of punishment concerning the crime of infringement of trade secrets

The revised act is to improve the scope of punishment concerning the crime of infringement of trade secrets, so as to address the changes in the IT environment, including dissemination of handheld terminals.

  1. The revised act is to expand the scope to add a person who acquired a trade secret with the knowledge that such trade secret’s disclosure is improper and resold it. The existing act limits the scope to those who directly received a trade secret from a person who had received it improperly.
  2. The revised act is to expand the scope to add an act of acquiring a trade secret overseas.*
    *Note: This provision includes an act of acquiring a trade secret under management of Japanese companies, which are stored in servers overseas.
  3. The revised act is to expand the scope to add attempts to infringe trade secrets.

3. Enforcement date

The revised act will come into effect as of the day specified by Cabinet Order within a period not exceeding six months from the date of promulgation. However, some of the provisions under the act will come into effect on the day of promulgation.

Release date

March 13, 2015

Divisions in charge

Intellectual Property Policy Office, Economic and Industrial Policy Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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