Chiteki Zaison Koto Saibansho Dai 4-bu [Intellectual Property High Court, Fourth Division] April 27, 2016

A computer programmer (defendant) worked for Kyowa Interface Science Company, Ltd. (Kyowa) (plaintiff), a company that manufactured and sold physical and chemical apparatuses. As part of his employment with Kyowa, the programmer signed pledges to maintain the confidentiality of the company’s trade secrets. The programmer later left Kyowa and, the following day, joined NiCK Corporation (defendant), itself founded by a former Kyowa sales representative. There, the programmer created a program for contact-angle calculation using source code taken directly from Kyowa and copied onto his personal computer. The NiCK program was sold by ASUMI GIKEN, Ltd. (defendant). Kyowa brought suit under the Unfair Competition Prevention Act, which covers trade secrets in Japan, in the Tokyo District Court. Kyowa also sought to enjoin the sale of a newer version of the same program created by the programmer for NiCK. However, evidence at trial showed that this second version used a different, noninfringing source code. The court found that the programmer, NiCK, and ASUMI GIKEN were liable for infringement of trade secrets on the basis of the earlier version of the program. The defendants appealed, with NiCK and ASUMI GREEN stating claims for damage to their business reputation due to the lack of infringing source code in the newer version of the program.