Intellectual Property Law

Japan's New Patent Secrecy System: What US Companies Need to Know

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read
One‑slide overview summarizing Japan’s Patent Application Non‑Disclosure System workflow under the ESPA for U.S. businesses.

TL;DR

Japan’s Economic Security Promotion Act (ESPA) introduced a Patent Application Non‑Disclosure System on 1 May 2024. Patent filings that contain “Specified Technology Fields” may be screened for national‑security risk, temporarily halting publication, examination and foreign filing. If a “Preservation Designation” is imposed, the applicant faces strict disclosure and export restrictions but can seek annual review and compensation for losses. U.S. companies with R&D activities in Japan must build internal screening, adjust global filing calendars and understand first‑filing rules to avoid criminal penalties and workflow delays.

Table of Contents

  1. Background and Purpose: Why a Patent Secrecy System?
  2. Overview of the System (ESPA Chapter 5)
  3. The Screening and Review Process: A Two‑Stage Approach
  4. Preservation Designation and Its Effects
  5. What Technologies Fall Under “Specified Technology Fields”?
  6. The First‑Filing Obligation in Japan
  7. Compensation for Losses
  8. Effective Date and Applicability
  9. Key Implications for US Companies
  10. Conclusion: Awareness and Adaptation are Essential

In an era of heightened global focus on economic security and the protection of critical technologies, Japan has implemented a significant piece of legislation: the Economic Security Promotion Act (ESPA), enacted in May 2022. A key pillar of this act is the establishment of a Patent Application Non-Disclosure System (特許出願の非公開制度 - tokkyo shutsugan no hikoukai seido), which came into force on May 1, 2024.

This system introduces procedures to potentially keep certain patent applications secret if their publication is deemed detrimental to Japan's national security. For US companies involved in technology development, manufacturing, R&D, or patent filing activities related to Japan, understanding this new system is crucial. It can impact global patent strategies, collaborations with Japanese partners, and the handling of inventions conceived within Japan.

Background and Purpose: Why a Patent Secrecy System?

Many major economies, including the US and several G20 nations, have long had mechanisms to withhold patent publication for national security reasons. Japan lacked such a system, meaning potentially sensitive inventions filed with the Japan Patent Office (JPO) would automatically be published 18 months after filing, regardless of their security implications.

The ESPA's non-disclosure system aims to close this gap. Its primary purpose is to prevent the public disclosure, through the patent system, of sensitive technologies that could be diverted to undermine the security of Japan and its citizens (e.g., by foreign governments or terrorist groups). It establishes a framework for identifying such inventions within patent applications and imposing necessary restrictions on their publication and exploitation, while attempting to balance security needs with the promotion of industrial development.

Overview of the System (ESPA Chapter 5)

The system operates by creating a pathway for certain patent applications filed with the JPO to be reviewed for national security sensitivity. If an invention described in an application is deemed sufficiently sensitive, it can receive a "Preservation Designation" (保全指定 - hozen shitei). This designation triggers several significant consequences, primarily suspending the standard patent examination and publication processes and imposing restrictions on the applicant.

The Screening and Review Process: A Two-Stage Approach

The process to determine if an invention should be kept secret involves two main stages:

Stage 1: First Review (一次審査 - Ichiji Shinsa) by the JPO

  • Trigger: When a patent application is filed with the JPO, it undergoes an initial screening. This screening checks if the invention(s) described in the application fall within certain "Specified Technology Fields" (特定技術分野 - tokutei gijutsu bunya) designated by a Cabinet Order as potentially containing sensitive technology. (Applicants can also proactively request their application be reviewed if they believe it contains sensitive technology, even if not in a specified field).
  • Scope: The JPO reviews the entire application (including specifications, not just claims) against the list of specified fields.
  • Timeline: This initial screening must be completed within three months of the patent application filing date.
  • Outcome & Notification:
    • If the application does not contain inventions in the specified fields (and the applicant hasn't requested review), it proceeds through the normal patent process, and this secrecy system no longer applies. Applicants who requested notification will be informed it was not forwarded.
    • If the application does contain potentially sensitive inventions falling within the specified fields, the JPO forwards the application documents to the Cabinet Office for a more detailed review. The applicant is promptly notified that their application has been forwarded for this second-stage review.

Stage 2: Second Review (保全審査 - Hozen Shinsa) by the Cabinet Office

  • Assessment: The Cabinet Office conducts a substantive assessment (the "Preservation Review") to determine if designating the invention for secrecy is appropriate. This involves evaluating:
    • The degree of sensitivity: Is there a significant risk that public disclosure could endanger national and public safety due to external actions?
    • The impact on industry: What are the potential negative effects on industrial development if the invention is kept secret?
    • Other relevant circumstances.
  • Process: This review can involve dialogue with the applicant, seeking input from relevant government agencies (like the Ministry of Defense) and external technical experts.
  • Applicant's Choice: Before a final designation is made, if the Cabinet Office is leaning towards designation, it will notify the applicant of the specific invention(s) concerned. The applicant must then submit documents regarding their information management practices if they wish to maintain the application. Crucially, at any point before a formal Preservation Designation is issued, the applicant is free to withdraw the patent application. Withdrawing avoids the restrictions of designation, although the first-filing obligation (see below) might still apply if the invention was made in Japan.
  • Timeline Constraint: While there's no fixed deadline for the second review itself, it's heavily influenced by the foreign filing restriction timeline (see below). In essence, if a Preservation Designation is not issued within ten months of the JPO forwarding the application, the restriction on foreign filing automatically lifts. This creates a strong incentive for the Cabinet Office to conclude the review within this timeframe.
  • Suspension: Throughout the second review process, standard patent procedures like publication and examination leading to grant or rejection remain suspended.

Preservation Designation (保全指定 - Hozen Shitei) and Its Effects

If the Cabinet Office concludes, after the second review, that secrecy is necessary and appropriate, it issues a Preservation Designation for the specific sensitive invention(s).

  • Duration: The designation is initially valid for up to one year. Before expiry, the Cabinet Office reviews whether an extension (typically for another year) is necessary. There's no limit on the number of extensions, but the designation can also be lifted at any time if the security concerns dissipate.
  • Consequences for the Applicant: Once designated, several significant restrictions and obligations apply for the duration of the designation:
    • Suspension Continues: Publication and substantive examination of the patent application remain on hold.
    • Restrictions on Applicant:
      • Ban on Withdrawal (Art. 72).
      • Permission Required to Work the Invention (Art. 73 - 実施許可制 jisshi kyokasei) - Permission granted if no risk of info leakage (e.g., specific secure clients).
      • Disclosure Prohibited (Art. 74 - 原則開示禁止 gensoku kaiji kinshi) - Exceptions for "legitimate reasons" (e.g., internal need-to-know within the company, sharing with approved partners).
      • Duty of Proper Information Management (Art. 75 - 適正管理義務 tekisei kanri gimu) - Requires specific measures (defined by Cabinet Office Ordinance) to prevent leaks.
      • Sharing requires Approval (Art. 76 - 承認制 shouninsei) - Need Cabinet Office approval to share invention details with other businesses.
      • Foreign Filing Prohibited (Art. 78).
    • Penalties: Mention criminal penalties (imprisonment/fines) for violations like unauthorized working/disclosure or non-compliance with management orders (Art. 92).

What Technologies Fall Under "Specified Technology Fields"?

The initial trigger for review is whether an invention falls into a "Specified Technology Field" (tokutei gijutsu bunya). These fields are defined in a Cabinet Order, primarily using the International Patent Classification (IPC) system, sometimes with further textual refinement.

The Japanese government has published the list of these fields. While a detailed technical analysis is beyond this article's scope, the 25 designated fields broadly cover areas such as:

  • Nuclear technologies and conversion/enrichment materials.
  • Advanced weaponry, guidance systems, explosives, propellants.
  • Aircraft camouflage/stealth technology.
  • Directed energy weapons technology.
  • Technologies related to unmanned aerial vehicles (UAVs) and autonomous control for weapons.
  • Submersible vessel technologies (including detection avoidance).
  • Technologies related to unmanned underwater vehicles (UUVs).
  • Specific sonar and acoustic detection technologies related to submarines.
  • Spacecraft technologies (thermal protection, re-entry, docking/separation, meteoroid detection, observation/tracking).
  • Certain semiconductor technologies (e.g., quantum dot, superlattice structures).
  • Tamper-resistant computing hardware protection.
  • Communications jamming technologies.
  • Cryptography and cryptanalysis technology.
  • Cyber attack capabilities and detection/analysis technologies.
  • Quantum computing, communication, and sensing technologies.

Important Note: Inclusion in a specified field merely triggers the second review; it does not automatically mean the invention will be designated. The Cabinet Office makes the final determination based on actual security risk and industrial impact.

Dual-Use Technologies & Additional Requirements: For certain broader technology fields (categories 10-19 in the official list, covering areas like solid rocket fuel, certain submersible/UUV tech, specific sonar, space tech, semiconductors, tamper resistance, comms jamming, cryptography, and cyber tech) that have significant potential for civilian application (dual-use), an "Additional Requirement" (fuka youken) applies during the first review. This means an application in these fields will only be forwarded for the second review if it also meets conditions designed to limit the scope to cases with less industrial disruption, such as inventions developed primarily for defense purposes or with government funding.

The First-Filing Obligation in Japan

A critical aspect for companies conducting R&D in Japan is the "First-Filing Obligation" (dai-ikko shugan gimu) under Article 78.

  • The Rule: If an invention (that is not yet public knowledge) falls within one of the "Specified Technology Fields" and was made in Japan, a patent application for that invention must generally be filed first with the JPO.
  • Restriction on Foreign Filing: Such an invention cannot be filed in any foreign country (including PCT applications) until one of the following occurs:
    1. The JPO completes its first review (within 3 months) and decides not to forward the application to the Cabinet Office.
    2. The application is forwarded, but 10 months pass from the original Japanese filing date without a Preservation Designation being issued.
    3. A Preservation Designation was issued, but it is subsequently lifted or expires without renewal.
  • Consequences of Violation: Filing abroad in violation of this rule can result in criminal penalties (Art. 94).

Pre-filing Consultation System (事前確認制度 - jizen kakunin seido) (Art. 9):

What if a company makes an invention in Japan in a potentially sensitive field but wants to file first in the US or another country? Article 79 provides a mechanism to seek advance clearance.

  • An applicant can submit details of the invention to the JPO before filing any patent application and request confirmation on whether filing it directly abroad would violate the Article 78 prohibition.
  • The JPO (and potentially the Cabinet Office, if the invention falls into a specified field) reviews the request.
  • If they determine the invention is not in a specified field OR that it falls into a specified field but its disclosure is clearly not expected to impact national security, they will issue a notice permitting foreign filing. This clearance allows the applicant to bypass the first-filing-in-Japan requirement for that specific invention.
  • This consultation process requires a fee.

Compensation for Losses

If an applicant suffers financial losses as a direct result of a Preservation Designation, they are entitled to compensation from the Japanese government (Article 80).

  • Scope: Compensation covers "losses that would ordinarily arise" (tsuujou shouzubeki sonshitsu) due to the designation. This could potentially include damages from being unable to work the invention or losses resulting from the inability to secure or enforce patent rights abroad due to the filing restrictions. Proving the amount and causation will likely be necessary.
  • Procedure: The applicant must file a claim with the Cabinet Office. The government determines the appropriate compensation amount, potentially consulting experts. If the applicant disagrees with the determined amount, they have six months to file a lawsuit seeking an increase.

Effective Date and Applicability

The patent non-disclosure system under the ESPA came into effect on May 1, 2024. It applies to patent applications filed with the JPO on or after this date.

Key Implications for US Companies

This new system has several important ramifications for US businesses:

  • R&D Activities in Japan: Inventions conceived or reduced to practice in Japan by employees of a US subsidiary, or through joint R&D with Japanese partners, could fall under the first-filing obligation if they touch upon the specified sensitive technology fields.
  • Need for Internal Screening: Companies, particularly those in potentially sensitive sectors (aerospace, defense, advanced computing, nuclear, communications, semiconductors), need robust internal procedures to assess whether inventions originating from Japan fall into the "Specified Technology Fields" before making any foreign filing decisions.
  • Impact on Global Patent Strategy: The potential for a 3-month (first review) or up to 10-month (second review) delay, or even a complete block on foreign filing, must be factored into global patent portfolio strategies. This could affect decisions regarding PCT applications, priority timelines, and coordinating international filings.
  • Collaboration and Licensing: When collaborating with Japanese companies or universities, or licensing technology from them, US companies need to understand if the underlying inventions might be subject to this system. Agreements should address information handling, potential disclosure restrictions, and responsibilities related to the non-disclosure procedures.
  • Compliance Burden: If an application becomes subject to review or designation, companies must be prepared to engage with the JPO and Cabinet Office, manage information according to specific requirements, seek necessary permissions for working or sharing the invention, and understand the potential penalties for non-compliance.

Conclusion: Awareness and Adaptation are Essential

Japan's Patent Application Non-Disclosure System marks a significant shift in its IP landscape, aligning it more closely with other major nations prioritizing economic security. While the initial scope may focus on clearly defense-related or highly sensitive technologies, US companies operating in or collaborating with Japan, especially in advanced technology sectors, must be aware of its existence and potential impact. Understanding the definition of "Specified Technology Fields," the implications of the first-filing obligation for inventions made in Japan, and the potential restrictions imposed by a Preservation Designation is now essential for effective IP strategy and risk management. Proactive internal assessment and adaptation of filing and collaboration practices will be key to navigating this new regulatory environment successfully.