The Journal The Authority on Global Business in Japan


February 2014

Strengthening Global Trade Secret Regimes to Support Competitiveness of Japanese and American Companies

Intellectual Property Committee

Valid Through October, 2014

The American Chamber of Commerce in Japan (ACCJ) urges the Government of Japan (GOJ) to enhance and facilitate the ability of companies to combat trade secret theft, which threatens our most innovative enterprises.

Specifically, the ACCJ recommends that the GOJ:

  • Work with trading partners to develop best practices and establish standards for trade secret protections;
  • Support ending the moratorium on Non-Violation, Nullification and Impairment (NVNI) disputes under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement); and
  • Support industry initiatives to react quickly and effectively to combat threats to the security of company know-how by supporting voluntary standards to protect innovation and by establishing “safe harbors” for sharing information related to attacks.

Knowledge is one of industry’s most important assets, and a company’s competitiveness frequently depends on its ability to protect its know-how. Know-how, protected as trade secrets, drives inventive activity in sectors such as advanced manufacturing, defense, healthcare, transportation, energy and climate change technologies, making it one of the most valuable assets for Japanese and American companies today. Thus, trade secret theft directly threatens the revenue and growth potential of Japanese and American companies. Trade secrets often require years to develop and millions of dollars. The impact of trade secret theft can be devastating to both business and consumers.

Moreover, trade secret protection is even more important than in the past, because the way companies innovate has evolved in significant ways.
Today we work in open and globally distributed innovation environments.

Japanese and American multinationals have research centers in Japan, the United States, and throughout the world. Accessing the best global talent makes it possible not only to develop the best minds in the world, but also gain vital perspectives on local needs that help companies remain competitive. Similarly, partnerships (e.g., joint ventures) have become a necessary part of doing business, and are instrumental in securing market access and developing technology. Innovation across locations and firms is most efficient when the participants can share critical knowledge.

Inadequate trade secret protection mechanisms, however, reduce sharing with partners both internally and externally.

Unfortunately, the ability to collaborate has recently become even more difficult amid the significant increase in trade secret theft, especially by cybercriminals. A wide range of technologies is being targeted, with thefts specifically focused on higher-end technologies that are crucial to Japanese and U.S. competitiveness. While these malicious activities have traditionally taken the form of misappropriation by individuals such as employees and contractors with access to secure systems, today’s global supply chains and increased Internet connectivity make businesses more vulnerable to theft through external hacking attempts.

The ACCJ urges the GOJ to work with its trading partners to develop best practices and establish standards for trade secret protections
The ACCJ recognizes that Japan and the United States have two of the best legal regimes for trade secret protection globally. Yet, the competitiveness of Japanese and American industry depends on the ability to protect trade secrets outside our countries. In particular, the GOJ should work with trading partners to develop best practices and establish standards for trade secret protections. Trade secret laws are underdeveloped and in some markets, protection is effectively non-existent. This is true even of fellow WTO signatories. TRIPS requires WTO members to provide “effective protection.”1 Yet in some countries trade secret protection is only available on a contractual basis, precluding relief against any actor not in privity of contract with the trade secret owner. In addition, the litigation systems in some countries require public disclosure of the trade secret in any enforcement action, which is clearly counterproductive.

With these challenges in mind, we recommend that the GOJ work with trading partners to develop best practices and establish standards for trade secret protection. These efforts should be used as a basis for globally harmonized reforms. One way to achieve this is through inclusion of specific language in bilateral and multilateral trade agreements requiring effective legislation and a legal mechanism to protect trade secrets against theft and unauthorized use for example by state-owned enterprises. Specifically, the ACCJ believes that the TPP and the EU-Japan FTA present opportunities for Japan to drive best legislative practices in Europe, where many of the current laws at the national level are seriously inadequate, and among TPP negotiating countries, where much improvement is needed. Japan should also actively engage at the OECD, where a trade secret discussion is already unfolding, and at the World Intellectual Property Organization (WIPO), to ensure that any normative activity conforms with best practice.

The ACCJ also asks the GOJ to support ending the moratorium on NVNI disputes under the TRIPS Agreement.

Even with a trade secret regime in place, some countries force innovators to disclose trade secrets as a condition of market access or to compel the licensing of trade secrets to promote the commercial interests of local (often state-owned) competitors. Relevant measures include government-backed testing or certification regimes that require companies to disclose confidential information in order to obtain access to the market, forcing companies to form joint ventures with local competitors in order to gain market access, and government-led efforts to use compulsory licensing mechanisms to force disclosure of trade secrets in a manner that favors domestic competitors. Countering market access barriers related to trade secrets can be particularly problematic.

Although national laws often protect trade secrets from theft or misappropriation by a competitor, those laws generally do not constrain governments from compelling the transfer of such information from foreign entities to domestic firms or to government agencies for commercial purposes rather than to support a legitimate policy or regulatory objective.

When a government is the driving force behind trade secret misappropriation, seeking meaningful relief within that country’s borders can be impossible. NVNI allows WTO members to lodge complaints about measures taken by other members that impair benefits under a WTO agreement. Lifting the current moratorium on the application of the NVNI principle to the TRIPS Agreement would provide a clear path forward for WTO challenges, which could be lodged when the regulatory environment of a particular country effectively impairs the protection of trade secrets under the TRIPS Agreement.

The ACCJ recommends that the GOJ support voluntary standards, as opposed to rigid regulations, to combat threats to the security of company know-how and establish “safe harbors” for sharing information related to potential and past attacks.

Unquestionably, the most effective way to deal with trade secret theft is to prevent it. This requires detecting attacks before they become successful. By supporting voluntary standards for IT security and software encryption, the GOJ can help industry respond rapidly to evolving threats to company know-how. Software- and IT-based system technologies advance so quickly that delays in implementing regulations may render those regulations obsolete. Thus, regulations may delay industry’s ability to innovate or even prohibit particular strategies.

There may be instances, however, where regulation is necessary. In such circumstances, the GOJ should work with industry to set risk-based performance requirements rather than regulating the design or development of software or IT based projects. In other words, government regulation should focus on outcomes, not on methods of achieving them.

Achieving those outcomes requires not only putting the right technology and processes in place but also giving industry the ability to uncover patterns of malicious activity. When companies share information relating to trade secret theft with law enforcement or similar firms, the ability to detect future attacks improves. The GOJ should establish “safe harbors” that encourage the exchange of threat-related information by industry without facing liability for disclosure or dissemination.

Protecting know-how is critical to the growth of Japanese and American industry. In an era of increasing collaboration and connectivity, the ability to share knowledge becomes even more important for companies to succeed. Therefore, it is critical to the long-term competitiveness of both the United States and Japan to cultivate a policy environment that makes it possible to mitigate any threats to trade secrets. That necessitates the development and implementation of a robust and preferably uniform trade secret protection system globally and the ability to deter misappropriation by both public and private parties in Japan, the U.S., and beyond our borders.

The ACCJ supports the ability of each business to decide how best to handle attacks on its own know-how. To that end, the GOJ can help in the establishment of an environment in which companies are confident their trade secrets are protected so they can continue innovating, create jobs, help solve society’s biggest problems, and grow the global economy.




ACCJ は、日本政府に対して、通商相手国と協力してベストプラクティスを策定し、営業秘密の保護基準を確立するよう要請する
ACCJ は、日米両国が営業秘密の保護に関して世界的に最も優れた法体制を有していると認識しているものの、日米産業界の競争力は、国外でいかに営業秘密を保護できるかに左右される。特に、日本政府は通商相手国と協力してベストプラクティスを策定し、営業秘密の保護基準を確立すべきである。営業秘密に関する法制度は整備途上にあり、存在しないも同然の国もある。これは世界貿易機関(WTO)の加盟国にも言えることである。TRIPS 協定は「効果的な保護」を行うようWTO加盟国に要求している1。しかし、国によっては、営業秘密は契約ベースで保護されるだけで、営業秘密の所有者と契約関係にない行為者に対抗するための救済策が排除されている。また、一部の国の訴訟制度は強制執行措置において営業秘密の公開を要求しており、これは明らかに逆効果である。
ACCJは、これらの課題を踏まえ、日本政府が通商相手国と協力してベストプラクティスを策定し、営業秘密の保護基準を確立するよう提言する。そして、この取組みは世界的に統一された改革の基礎として利用されるべきである。これらを実現する一つの方法は、二国間および多国間の通商協定に特定の文言を盛り込むことにより、国有企業などによる盗用や不正使用から営業秘密を守るために実効性のある法律と法的な仕組みを義務付けることである。具体的には、環太平洋パートナーシップ(TPP)協定と欧州連合(EU)・日本間の自由貿易協定(FTA)が、日本にとって、欧州およびTPP交渉国において立法上のベストプラクティスを推進する機会となると ACCJは考える。欧州では国家レベルの現行法の多くが極めて不十分であり、TPP交渉国にあっては相当の改善が必要である。また日本は、営業秘密の討議がすでに行われている経済協力開発機構(OECD)と世界知的所有権機関(WIPO)にも積極的に関与し、あらゆる基準の策定においてベストプラクティスと整合させるようにすべきである。