Framework for Patent Non-Disclosure System will be Introduced in May 2024

July 2023
Practice Area

Outline of the System

The Cabinet of Japan approved on April 28, 2023, a framework for a patent non-disclosure system which was stipulated in the Economic Security Bill enacted in May 2022.  The operation of the system is scheduled to start in May 2024.  The patent non-disclosure system aims to prevent overseas leakage of technologies important to security, including civilian technologies (sensitive technologies) which could be transferred for military use.  Inventions of technologies important to security will not be disclosed unlike ordinary patent applications.

According to the framework, examination for non-disclosure will be conducted in two stages.  The first stage examination will be conducted by the Japanese Patent Office (JPO).  If the JPO finds that a patent application may fall under “specific critical technology areas” relating to sensitive technologies, then the Cabinet Office will subsequently conduct a “preservation examination” on the certain application.  Upon the examination, if the invention is designated as a preservation technology, the publication and patent grant will be suspended, and the applicant will be imposed with duties on prohibition of working the patent without permission and disclosure of the invention, and be forced to implement measures to ensure the proper management for information leak prevention.

The strict criteria under which applications including sensitive technology are subject to non-disclosure requirements without exception are not applied in the operation.  The impact on business activities will be considered, and only cases deemed to be appropriate will be designated as subject to the nondisclosure requirements.

Prohibition of Overseas Application

As to the subject of the non-disclosure system, if an invention is made in Japan, it should be first filed in Japan before being filed overseas.  If a patent application is first filed overseas, the applicant should check, his- or herself, whether the invention is subject to the non-disclosure examination.  An applicant may ask the JPO for confirmation beforehand.  Violation of the prohibition of overseas applications above will be subject to penalties of imprisonment of up to one year or paying a fine up to 500,000 JPY (about 3,500 USD).

Compensation for Losses

An applicant who has an invention designated as a preservation technology may receive compensation of losses caused by the designation, such as profits which cannot be earned due to the prohibition of working of the patent invention.  An applicant who wishes to receive the compensation must present reasons of the claim for compensation, the total value of claimed compensation and its breakdown, as well as the grounds for the calculation.  The type of losses which may be eligible for the compensation and examples of consideration elements of loss calculations are planned to be indicated in a Q&A format.