Trade Secrets（Eigyou-Himitsu）as Property
in a Trust“A Study of the Creating a Trust of Trade
Secrets and the Pertinent Practical Issues”
Kazuyuki Matsuda（Sumitomo Mitsui Trust Holdings, Inc.）

With the development of the information society, the importanceof protecting proprietary information has long been a topic ofspecial interest to legal scholars and law practitioners. The Unfair
Competition Prevention Act revised in 1990 protects trade secrets as
one of proprietary information, the Trust Business Act revised in 2004
abolished property restrictions of trust property, and the Trust Act
revised in 2006 allows the creation of a trust substantially equivalent
to business trust. Under such circumstances, this study shows thatwhether a trade secret may be the subject of a trust or not in thecreation of a trust of intellectual property rights or the rights inconnection with business, and what practical issues to raise in suchcases are.
According to previous studies, proprietary information lacks
inherently so-called exclusivity for its intangibility, therefore, it would
be the subject to trade as property by virtue of the“enclosure”
of information provided in intellectual property laws（which playa central role in protection of proprietary information）. As a legal
method of“enclosure”of information, there are two types of laws;（i）laws granting similar rights as ownership of proprietary information（the Patent Act, the Copyright Act, etc.）and（ii）laws regulating
access to proprietary information（the Unfair Competition Prevention― 151 ―

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Act, etc.）. Thus, laws balance the “enclosure” of proprietary
information with the free use of it, depending on the proprietarynature of information.
In American law, it is generally understood that the interest in atrade secret may be the subject of a trust. According to the cases, theright to exclude others is generally“one of the most essentially stickin the bundle of rights that are commonly characterized as property”,
and with respect to a trade secret, the right to exclude others isessential to the very definition of the property interest. In addition,
there are another cases that the trustee has title to the trade secretsof the bankrupt, therefore, it is of great significance that trade secrets
may be the subject of a trust in relation to the independence of trust
property（bankruptcy remoteness）.
In Japanese law, the requirements of trust property are（i）it isa positive property which can be estimated in monetary value and（ii）it can be separated from the property of a settlor. With regard
to（i）, a trade secret is such property based on similar considerationsin American law, because the holder of a trade secret can use anddisclose it to others subject to restrictions on their use and disclosure
by the exercise of the right to demand an injunction provided in
the Unfair Competition Prevention Act. With regard to（ii）, a trade
secret itself or all of the rights in connection with business（includingtrade secrets）are assignable together with the right to demand an
injunction provided in the Unfair Competition Prevention Act, although
there are several counterarguments to this as well. Practical issues incase of creating a trust of a trade secret include mainly managementof a trade secret, segregation of a trade secret, accession of a trade
secret that belongs to trust property and claim or proof of prior use.

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