Tuesday, January 18, 2011, 1/18/2011 04:36:00 PM

Japan Considers Confidentiality Shields for Trade Secrets Implicated in Prosecutions

By Todd

This just in from the Daily Yomiuri Online: Japan is considering a law that will shield trade secrets that are at issue in criminal prosecutions traditionally open to the public.


The Economy, Trade and Industry Ministry will submit a bill to revise the Unfair Competition Prevention Law during the next ordinary session of the Diet, a ministry official said. The revision would help ensure secret information is not publicly disclosed during court hearings for criminal cases of industrial espionage, which in principle are open to the public, the official said.

If the court approves a request by lawyers, during proceedings trade secrets would be referred to as "material A" or "process B," for example, to keep their specifics concealed.

This rule would be applied only in cases of alleged infringement of trade secrets, which was established as a criminal offense by a previous revision to the Unfair Competition Prevention Law made in 2003.

A revision in 2006 toughened punitive measures, extending the maximum term of imprisonment for industrial espionage to 10 years and raising the maximum fine to 10 million yen.

Punishments were toughened further by a 2009 revision that made it an offense not only to use data acquired via espionage for personal gain, but also to copy such data to disks and other storage devices.

In Japan, a majority of companies that fall victim to industrial espionage do not file criminal complaints, for fear of suffering greater damage if confidential information is revealed in indictments or submitted as evidence. As a result, indictments for alleged infringement of trade secrets have been ordered in only two cases.

The ministry hopes the planned revision to the law will result in more companies lodging criminal complaints over industrial espionage.

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