Protecting trade secrets is a critical business function. While the core principles are universal, the legal landscape for their protection and enforcement shows significant divergence across major economic hubs. 

In a panel session at the  International Association for the Protection of Intellectual Property (AIPPI) held at the PACIFICO Yokohama, the speakers discussed how trade secrets have no one-size-fits-all solution. According to them, an effective strategy requires a layered and tailored approach rather than a single solution. This multi-faceted strategy combines legal safeguards, technical controls and organizational measures to create a robust defensive posture.

These protections can be broadly categorized. Legal safeguards create contractual fences around information, most commonly through non-disclosure agreements (NDAs) with third parties and strong confidentiality clauses in employment contracts. Technical controls are paramount in the digital age, including data encryption, access controls, two-factor authentication and network monitoring. Finally, organizational and practical measures involve day-to-day operational security, such as marking documents as confidential, implementing clean desk policies, restricting physical access to sensitive areas and consistently training employees on security protocols.

An operational checklist

To put the principle of “reasonable steps” into practice, companies should implement a comprehensive internal programme. A crucial first step is to develop clear internal regulations, including a formal trade secret policy and an operational handbook. This documentation should define what constitutes a trade secret, outline protection protocols and detail the consequences of a breach.

However, a policy is only effective if employees are aware of it. Therefore, mandatory training should be structured at key points in the employment lifecycle – during onboarding to set initial expectations, annually to reinforce policies, and upon departure to remind former employees of their continuing obligations.

Operational security measures are also critical. These include robust internal security management, covering both physical security, such as locked file cabinets and cybersecurity like firewalls. Companies must also carefully manage the disclosure of information to third parties, always using a strong NDA and sharing only what is absolutely necessary. The risk of misappropriation is often highest when an employee leaves, so managing former employees is a key vulnerability point. This involves conducting exit interviews, securing the return of all company property, promptly terminating system access, and monitoring for any suspicious activity post-employment.

Enforcement and remedies compared

While protection best practices are similar globally, the legal avenues for enforcement after a theft occurs vary significantly between Japan, Germany and the U.S.

Japan

Japan’s framework, governed by the Unfair Competition Prevention Act (UCPA), offers a stable and robust system. A trade secret owner can pursue civil enforcement to obtain an injunction and claim compensation for damages. In serious cases, the UCPA also provides for criminal penalties, including fines and imprisonment.

Japan is currently not discussing major legislative changes, having recently updated its official Handbook for the Protection of Confidential Information in March 2025. This update provides guidance to help companies adapt their “reasonable steps” to modern realities like widespread remote working and the increased use of cloud technology, emphasizing practical application over legislative overhaul.

Germany

Germany’s approach, based on the Trade Secrets Act (GeschGehG), is notable for its claimant-friendly structure for obtaining quick relief. A key feature is that many claims, such as those for an injunction, are fault-independent. This means the claimant does not need to prove the defendant acted with intent or negligence to stop the misuse of a secret, lowering the bar for immediate protection.

However, claims for monetary remedies such as compensation for damages or the surrender of profits do require proof of fault. The German act also includes provisions to deter the abuse of trade secret litigation as a tool to harass competitors, balancing protection with fair competition.

United States

The U.S. offers a powerful dual system of state laws and a federal statute, the Defend Trade Secrets Act (DTSA) of 2016. The DTSA provides a formidable arsenal of remedies, including injunctions, compensatory damages, and recovery for unjust enrichment. For “willful and malicious” misappropriation, a court can award punitive damages of up to twice the actual damages.

The U.S. is also a hotbed of legislative discussion, with a continuous policy debate balancing the need for strong trade secret protection against concerns that overprotection can stifle employee mobility. This tension is evident in recent federal scrutiny of noncompete agreements, making the U.S. landscape powerful and also constantly evolving.

- Excel V. Dyquiangco, reporting from Yokohama