Trade Secret （Confidentiality）～ Selecting Strategies for Protecting Technical
Information in Companies ～１. Points to consider when selecting strategies for protecting technicalinformation in companies
In selecting a protection strategy for technical information in a company’s possession, it isnecessary to accurately evaluate (1) the technical value / nature and (2) economic value, fully
consider (3) the advantage and disadvantage of each protection strategy, such asconcealment, patenting, and making public knowledge, including the differences in protection
laws and practices of trade secrets, prior user rights and patent rights in each country
concerned, and consider and decide (4) the appropriateness of each protection strategy, notmerely the appropriateness of patenting, but the appropriateness of each protection strategy
so that it is consistent with the company’s business strategy for related products and services.

２. Specific examples of points to consider when choosing a protection
strategy for technical information in a company
In this regard, with respect to (3) above, in general, each of the protection strategies ofconfidentiality, patenting, and making public knowledge has advantages and disadvantages asshown in the table below.
Making Confidentiality
Advantages○Low hurdle for protection(no inventive step required)○Decrease in opportunities
for imitation○Increase in actual need forout-licensing○Long-life potential○Possibility of worldwide
protection in contracts○Low maintenance costs

Patenting○Small differences in patent
protection legislation and practice indifferent countries around the world○Absolute exclusivity, clarity, andpublicity of the scope of rights○Legal ease of commercialization,
cross-licensing, and collateralization○Prevention of patenting by othercompanies, etc., by publication ofthe application, especially thestrength of the prevention effect incomparison with published technicalreports etc.
Disadvantages ●Possibility of patenting by●High hurdle for protection
others and geographical and(inventive step required)
other limitations on the right●Increased opportunities forof prior use as aimitation in application disclosurescountermeasure thereof●Decrease in actual out-licensing●Major differences in
needs
protection legislation and●Fixed period or term
practice of trade secrets and●Requires filing of an application
prior user rights in countries
for each country, liberalization ofaround the world
implementation in non-applicant●Relative regulation of acts of countries
trade secret infringement;●High maintenance costs
unclear scope of said●Non-promptness and complexity
regulationof preventing other companies from
●Risk of leakage and making
patenting the application by
public knowledge
publishing the application compared●Legal difficulties into published technical reports etc.
commercialization, crosslicensing, and collateralization

Making Public Knowledge○Possibility of early and simple
prevention of patenting by othercompanies, especially by meansof published technical reports,
etc., compared to the publicationof the application.
○Possibility of technology
openness and evenstandardizationai●Early and definitive
abandonment of the benefits ofsecrecy and patentability●blocking the patenting of its
own subsequent patentapplications●Weakness in prevention ofpatenting by other companies,etc., by means of publishedtechnical reports etc. incomparison with the publicationof the application

Regarding (1) above, for example, if the technology is unique to the company anddifficult to be developed independently by other companies, protection as a trade secretthrough concealment is better than patenting for a fixed period or term through applicationand publication, which can extend the life of the technology and the legal protection
period if confidentiality management is thorough. On the other hand, technical informationsuch as structure, size, shape, material, composition, physical properties, etc., which canbe easily analyzed from a competitor's commercial product, is not suitable for protection
as a trade secret due to loss of non-public knowledge, but if it is used in a competitor'scommercial product, it can be easily detected and analyzed by the competitor, making itsuitable for patenting.
In addition, with regard to (1) and (2) above, for example, if the technical andeconomic value of the basic part is not necessarily high in the Japanese market, while theimproved part is over-specified in markets other than Japan, based on a combined
evaluation of each technology group for each market, the basic part may be made publicly
known and opened for the global commercialization and marketing of related products
and services while the improved part is kept secret or patented for the Japanese market,
and the use of different methods or combinations of methods is possible.
Furthermore, with regard to (4) above, for example, in cases where a technology
license is granted to an affiliated company in a developing country for factory production
and the receipt of a license fee, it may be easier for the relevant authorities in the country
to recognize that the receipt of the license fee is appropriate if the technology is patented
in the country and a hybrid license agreement of patent and know-how is concluded,
rather than a simple know-how license agreement.

３. Accurate support for client companies
In selecting such strategies for protecting technical information, we provide ourclients with appropriate support through mutual study and close cooperation between
attorneys at law and patent attorneys, who have specialized and abundant knowledge
and experience in domestic and foreign practices relating to secrecy, patenting, and publicknowledge, depending on each specific case.
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WriterKei IIDAAttorney at Law[k_iida☆nakapat.gr.jp]

Yasumasa SASAKI
Patent Attorney[pat☆nakapat.gr.jp]

Hidekazu NISHIMURA
Attorney at Law[h_nishimura☆nakapat.gr.jp]

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