VITAL TRADE SECRETS

e Unfair Competition Prevention Law currently protects con dential corporate information in Japan. Pieces of corporate data are protected as “trade secrets” under this law, provided that they meet a set of three law-stipulated criteria: they are “useful” for business activities, such as manufacturing or marketing methods; are “kept secret”; and “not publicly known.” Penalties include imprisonment of up to 10 years.

As for the three criteria, the Economy, Trade, and Industry Ministry set a guideline for trade secrets management, clarifying the government’s o cial stances regarding each standard. e policy serves as the reference threshold for determining whether to apply the law’s penalty provisions.

Nonetheless, this law’s rules for regulating who should be allowed to access trade secrets and how such secrets should be handled remain fragmentary. In this regard, the government needs to establish a set of norms not only de

ning the quali cations and eligibility of persons holding trade secrets and how they are handled but also specifying how security clearance assessment should be carried out. Introducing clear-cut norms could encourage businesses to implement corporate governance practices while adhering to national economic security.

As for the preservation of trade secrets important for national security, one approach can be to install a security clearance assessment process within the framework of the Unfair Competition Prevention Law.

Of critical advanced technologies and information possessed by Japan, those vital for national security should be protected across the board, be they in the government’s or the private sector’s possession. is is a big plan for the government to achieve as part of its policy of ensuring national economic security.

As seen above, it is hard to say that Japan currently has a solid security clearance assessment mechanism concerning sensitive technologies and information in the hands of the private sector.

e government and the private sector are now required to cooperate and work together to resolve the issue of enhancing and improving the existing systems for safeguarding security-sensitive secrets and creating a security clearance assessment structure as an extension of such collective e orts. (Sept. 23)