News

Partial Revision of the Unfair Competition Prevention Act

by Hirohito Katsunuma (Katsunuma International Patent Office – Japan)

Responding to the development of information technology under the Fourth Industrial Revolution, a bill for Partial Revision of the Unfair Competition Prevention Act etc. passed and was approved by the Japanese Diet on 23rd May 2018. Valuable data such as bigdata etc., which was not protected by patent, copyright or trade secrets, became protected by the revised Unfair Competition Prevention Law. Standardization procedures were simplified, and collection of evidence in the court was strengthened.

The revised Acts were published on 30th May 2018 and will come into effect within a period not exceeding one year and six months from the day of its promulgation.

1. Purpose of revising the laws

In recent years, with the innovation of information technology such as IoT and AI under the Fourth Industrial Revolution, corporate competitiveness is changing to data and its utilization. Under these circumstances, necessary measures have been taken to improve the environment to promote the utilization of data. It aims to advance the development of information technology and create newly added values thereby.

2. Main Measures

(1) Unfair Competition Prevention Act

  • The wrongful acquisition, use or disclosure of data protected by electromagnetic measures (e.g. IDs and passwords) are considered as acts of unfair competition (Article 2.1 (11) – (16))
  • The rights to file an Injunction against acts of unfair competition are established. (Articles 3-6)
  • Acts of providing services of circumventing protecting measures and acts of providing devices used to circumventing such measures are acts of unfair competition. (Articles 2.1 (17), (18), Article 2.8)

(2) Industrial Standardization Act

a) Data, services, and management systems are entitled to be targets of standardization under Japanese Industrial Standards (JIS). (Article 2.1 (6)-(15))

b) Private associations with expertise can establish new JIS without being reviewed by the Japanese Industrial Standards Committee. (Articles 12 – 18, 22 – 29)

c) The upper amount of the fine for unauthorized labelling of the JIS mark is raised. (Article 81)

(3) Patent Act

a) All small and medium-sized enterprises are entitled to enjoy a halving of patent and other fees. (Article 109bis)

b) Courts, in issuing an order for document submissions, can decide on the need for the documents in a closed procedure. (Article 105.2)

c) The grace period for novelty of inventions etc. is expanded to one year from its current six months. (Article 30)

3. Overview of Revision of Unfair Competition Prevention Act

Under the present circumstances, unpublished information such as design drawings and customer lists are protected as “trade secrets” by the Unfair Competition Prevention Act. And, creative information such as composition information of high-performance chemical substances, or, photographs or music data is protected by the Patent Act or the Copyright Act respectively.

However, valuable data e.g. bigdata, if it does not fall under the above categories, cannot be protected. Once if it is wrongfully acquired, it was difficult to stop illegal distribution.

In this revision, certain transactions concerning data are considered as “act of unfair competition acts” under the Unfair Competition Prevention Act. Civil actions (injunction right, request for damages) are introduced.

Data which will be protected by the revised Unfair Competition Prevention Act is technical or commercial information stored and managed by electromagnetic measures (ID, passwords and the like) and to be provided to specific persons (refer to as “Limited Provision Data” hereinafter).

The acts of acquiring Limited Provision Data by illegal means and using/disclosing of such data are considered as acts of unfair competition. In addition, acts of acquiring Limited Provision Data by knowing unfair circumstances and using/disclosing such data are considered as acts of unfair competition. Furthermore, providing devices and services which hinder or circumvent technical restriction measures such as encryption is also considered as unfair competition.

On the other hand, if a person acquired data without knowing of any unfair circumstances and came to know the circumstances only after the acquisition, it is an exception to civil relief for such a person to use or disclose data within the scope of the agreement for acquiring the data. The act of acquiring, using, and disclosing data which is already available to the public for free is also an exception to civil relief.