This study aims to create a theoretical basis for a formal definition of the Galapagos Effect phenomenon in Japanese high technology businesses. The phenomenon has been widely used but loosely defined in research. A review of the literature is done to identify the theoretical innovation characteristics that apply to this area and five key characteristics affecting businesses in Japan are identified. These five characteristics are then investigated to determine if sufficient research evidence ties them to Japan. The study concludes that the five identified characteristics are exhibited in Japanese business and that they may form a valid basis for a first attempt to define the Galapagos Effect in Japanese high technology business.