Arab News Japan

TOKYO: The government will take measures to prevent leaks of confidential information related to defense equipment, the Nikkei reported. Items such as parts and blueprints will be purchased on a temporary basis before being transferred free of charge to other domestic companies.  

Japan says there will be a security threat if intellectual property is leaked or companies are acquired by foreign companies. The government will help with smooth transitions for businesses.

The government plans to buy the information from companies withdrawing from defense supplies due to business problems or factory closures. It reflects an increase in the number of medium- and small-sized companies looking to exit the defense industry.

In May 2021, Sumitomo Heavy Machinery Industries reportedly leaked a blueprint for machine-gun parts to Chinese companies. 

Also, Chinese companies have acquired shares in small and medium-sized enterprises that make antennas for submarines.China seems to be increasingly interested in Japan’s maritime equipment technology in order to strengthen maritime defenses.

The risk of technology leakage is considered greater among SMEs, companies in financial trouble, and those that are restructuring. That has led the government to look at ways to acquire those businesses temporarily to prevent such leakage.

Defense equipment includes fighter jets, ships and communication and information systems used by the Self-Defense Forces.

Under the new system, the government will buy sensitive items such as blueprints and parts before a company withdraws from a project. The intellectual property rights of such items will belong to the Ministry of Defense and the Self-Defense Forces.

Under the new system, the government will also help apply for tax incentives and subsidies when a transition takes place.

The government also wants to prevent companies from closing down without considering a transition to alternative companies. If companies with special technology disappear, the production and maintenance of domestic equipment will be hampered.

The government will submit a four-pronged economic and security bill to the Diet, including a non-disclosure system for patents.

The government is seeking 1 billion yen ($8.7 million) for the initiative from the state budget for fiscal 2022 starting in April.