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Japanese Ministry of Economy, Trade and Industry (METI) Preparing Model Contract to Help Startups Avoid Losing Innovations to Bullies

INTELLECTUAL PROPERTY INDUSTRY NEWS

The Ministry of Economy, Trade and Industry (METI) of Japan has been concerned about abuse of power relationships by large corporations of smaller research partners such as startup companies, as being investigated by the Fair Trade Commission of Japan. It is preparing a sample contract for use by such disparate parties to a research or licensing agreement.

 

The Fair Trade Commission published some findings on such forced or secret technology leaks earlier this year (see here). The Nikkei Shimbun (“Fair Trade Commission …”) reported more recently that startups (defined as companies with less than ten years of history; there are about 10,000 such companies in Japan) tend to be vulnerable to aggressive tactics by representatives of larger companies and end up executing contracts with unfair terms. For example, there are reported cases of startups being forced to agree not to deal with any other companies for long periods; losing patent rights when larger companies filed patent applications without their consent; and demanded unlimited usage permission.

 

While there is generally a high sense of the importance of IP among larger companies and in government policy in Japan, busyness and lack of information or concern may lead many with fewer resources or less counsel to give up their innovations unwillingly. The METI plan to offer sample contracts (with notes on important clauses and how to keep a contract fair) within a few months is a welcome development, although the need for personal vigilance by researchers and companies with less background in IP will still remain. Everyone innovating for profit needs support and wisdom to negotiate equitably in a rushed world of change.



 

* The information provided on this website is for informational purposes only and is not intended as legal advice.

** For questions or consultation, please contact us for more information.


Taro Yaguchi



Sources

Nikkei Shimbun online. “新興の知財「横取り」監視 大企業との取引、公取委調査 [Fair Trade Commission monitoring dealings of startups with large corporations, cases of IP theft of startups’ IP].” https://www.nikkei.com/article/DGXMZO53221860R11C19A2EA2000/ December 11, 2019. Accessed December 17, 2019.

 

Nikkei Shimbun online. “大企業と新興に「契約書のひな型」 経産省、年度内にも [METI preparing a ‘model contract’ for big corporations and startups, for use within fiscal year].” https://www.nikkei.com/article/DGXMZO53224010R11C19A2EA2000/

December 11, 2019. Accessed December 17, 2019.

 

 

 

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