Japanese Unfair Competition Prevention Law

The information found or referenced herein is not intended to be legal advice or a substitute for obtaining legal advice from a licensed attorney.

The Unfair Competition Prevention Law provides measures for the prevention of unfair competition in order to ensure fair competition among business entities. The Law has fourteen Articles. Though this is not meant to be an exhaustive explanation of the Law, we hope that the reader will be able to gain a cursory understanding of the Japanese Unfair Competition Prevention Law.

Table of Contents

I. What constitutes unfair competition

A. False identification

B. Free-ride & dilution

C. Imitated configuration

D. Misappropriation of trade secret

E. Misleading indication

F. Spreading false information

G. Former agent's acts

II. Remedies

A. Injunction

B. Damages

C. Measures to restore business reputation

---

I. What constitutes unfair competition 2(1)

Art. 2(1) lists twelve kinds of conduct that constitute unfair competition. The Law does not have a general provision that prohibits unfair conduct other than that listed in this article.

---

A. False identification 2(1)(i)

Acts that lead to confusion with another party's goods or business are barred under certain conditions. There are two kinds of acts. One act is the use of an indication that is identical or similar to the goods or other indication of another party, which is widely known among consumers."[G]oods or other indication" means name, trade name, trademark, mark, container or package of goods in relation to a person's business, or any other indication of goods or business. The other kind of act is assigning, delivering, displaying for the purpose of assignment or delivery, exporting, or importing goods that use such goods or other indications, which are widely known among consumers.

---

B. Free-ride & dilution 2(1)(ii)

The act of using goods or another indication which is identical or similar to another party's well-known goods or other indication as one's own constitutes unfair competition. The act of assigning, delivering, displaying for the purpose of assignment or delivery, exporting or importing goods which use such goods or other indication which is identical or similar to another party's well-known goods or other indication, also constitutes unfair competition.

---

C. Imitated configuration 2(1)(iii)

The act of assigning, leasing, displaying for the purpose of assignment or lease, exporting or importing goods which imitated the configuration of another party's goods constitutes unfair competition, if it is within three years of the first date of sales of the imitated goods. However, a configuration which is commonly used for goods of the same kind as that of such other party is not protected.

---

D. Misappropriation of trade secret 2(1)(iv)-(ix), 2(4)

"Trade secret" means a manufacturing method, sales method, or any other technical or business information useful in a commercial activity, which is maintained as a secret and not known to the general public.

The following acts constitute unfair competition:

1. The act of acquiring a trade secret by means of theft, fraud, coercion, or any improper means, or using or disclosing a trade secret acquired through an improper acquisition, even if disclosure is to a specific person or a specific group of persons on condition that secrecy be maintained.

2. The act of acquiring a trade secret while being aware that said trade secret has been acquired through improper means or through gross negligence, or the act of using or disclosing a trade secret so acquired.

3. The act of using or disclosing a trade secret after becoming aware that said trade secret has been acquired through improper means or through gross negligence.

4. The act of using or disclosing a trade secret which has been disclosed by the business entity holding it, for the purpose of acquiring an unfair benefit or inflicting injury on said trade secret holder.

5. The act of acquiring a trade secret while being aware, or, through gross negligence, not being aware that there has been an improper disclosure of said trade secret or that said trade secret has been acquired through improper disclosure; or the act of using or disclosing a trade secret so acquired.

6. The act of using or disclosing an acquired trade secret after becoming aware, subsequent to its acquisition, that there has been improper disclosure of said trade secret or that said trade secret has been acquired through improper disclosure, or, through gross negligence, not being aware of such matter.

---

E. Misleading indication 2(1)(x)

The act of indicating on goods or for service, or in advertisement, which is likely to mislead with respect to the place of origin, quality, or contents, or the act of assigning, delivering, exporting or importing goods, or offering a service with such an indication.

---

F. Spreading false information 2(1)(xi)

The act of notifying or circulating a falsehood which injures the business reputation of a competitor.

---

G. Former agent's acts 2(1)(xii)

A former agent's use of the owner's trademark right in a business which is similar to the owner's.

---

II. Remedies

A. Injunction 3

A person whose business interests are infringed or are likely to be infringed by unfair competition, is entitled to request any acts necessary to prevent or suspend the infringement, including an injunction preventing or suspending such infringement and the destruction of the objects which constitute the act of infringement.

---

B. Damages 4, 5

A person who intentionally or negligently infringes on the business interests of another person through unfair competition shall be liable for damages which results therefrom.The amount that the party who has infringed has profited from unfair competition shall be presumed to be the amount of damages caused. The infringed person/entity may claim an amount of compensation for damages which is equivalent to the amount which normally ought to be awarded as compensation.

---

C. Measures to restore business reputation 7

The court may order a person/entity who committed an act of unfair competition to take measures necessary to restore the business reputation of the person/entity whose business reputation was injured, upon his/its request.