In brief
The Japan Fair Trade Commission (JFTC), Small and Medium Enterprise Agency (SMEA) and Patent Office (JPO) have jointly issued new guidelines addressing abuse of superior bargaining position in transactions involving intellectual property, know-how and data. The guidelines provide practical guidance on fair negotiations, valuation, compensation, confidentiality and risk allocation while highlighting conduct that may raise concerns under the Antimonopoly Act (AMA), including uncompensated IP transfers, excessive information disclosure requests and one-sided contractual terms. The guidelines should also be viewed within the context of a broader monitoring and information-sharing framework involving the "IP Transaction G-Men," signaling increased scrutiny of transactions between larger companies and SMEs, startups, freelancers and other counterparties.
In June 2026, the JFTC, SMEA and JPO jointly issued the Guidelines Concerning Abuse of Superior Bargaining Position, etc. for Appropriate Transactions Involving IP Rights, Know-how and Data (Guidelines). The Guidelines were developed in response to growing concerns that companies with stronger bargaining power often obtain intellectual property rights, know-how and valuable data from smaller suppliers, startups, freelancers and SMEs without adequate compensation or through unfair contractual arrangements.
The AMA defines abuse of a superior bargaining position as an act whereby a party takes advantage of its superior bargaining position vis-à-vis its trading partner to require the trading partner to purchase or use goods or services, provide economic benefits — which, under the Guidelines, may include information, technology, intellectual property or other assets — or accept any other abusive or disadvantageous treatment in a manner unjustifiable in light of normal commercial practices. Where such an abuse in violation of the AMA is found, the JFTC may issue a cease and desist order and, where the applicable statutory requirements are met, is required to issue an administrative surcharge payment order.
The Guidelines recognize that patents, copyrights, trademarks, business know-how, technical expertise, manufacturing processes and data have become essential drivers of innovation and competitiveness. As their economic value has increased significantly due to advances in digitalization, artificial intelligence, IoT technologies and data-driven business models, the Guidelines regard proper recognition and compensation for these assets as critical to sustaining innovation and maintaining fair competition throughout supply chains.
The primary objective of the Guidelines is to promote fair and transparent transactions involving IP, know-how and data. They seek to prevent conduct that may constitute abuse of a superior bargaining position under the AMA or raise concerns under the Act on Ensuring Proper Transactions Involving Small and Medium-Sized Entrusted Business Operators or the Freelance Act. They also provide practical guidance for businesses on contract negotiation, information management, valuation methods and risk allocation.
Broad scope
A distinctive feature of the Guidelines is their broad and cross-sectoral approach. They apply not only to legally protected rights (e.g., patents and copyrights), but also to technical know-how, manufacturing expertise, design and engineering information, research and experimental data, industrial and operational data, customer and business data, software source codes, trade secrets and confidential business information. In addition, the Guidelines are intended to apply across all industries and business models. They are particularly relevant where large companies engage SMEs, startups, subcontractors, creators, freelancers, researchers and technology providers.
Fundamental principles
The Guidelines emphasize that businesses are generally free to negotiate commercial terms. However, this freedom does not permit a party with superior bargaining power to impose unreasonable disadvantages on a weaker counterparty. Where a buyer, customer or principal (Buyer, etc.) effectively has the ability to influence or control the business decisions of a supplier because the supplier would face a substantial disruption of its business if the relationship with the Buyer, etc. became difficult to continue, demands by the Buyer, etc. that would normally be rejected in an arm's-length negotiation may constitute an abuse of superior bargaining position.
Potentially problematic conduct under the AMA
The Guidelines explain how certain conduct may raise concerns under the AMA, particularly as an abuse of a superior bargaining position. Approximately 70 illustrative examples are provided, of which the following warrant particular attention:
- Unilateral requests for disclosure of know-how or confidential information, including during factory visits
It should be noted that the Guidelines specifically point out that in the manufacturing sector, excessive information disclosure is frequently requested under the pretext of quality assurance. They further clarify that, even when such requests are framed as having a quality assurance purpose, they may still be problematic where they lack a legitimate justification.
- Refusal to enter into NDAs or imposing unilateral NDA terms
- Unilateral determination of compensation or compensation mechanisms
- Requests for free transfer or licensing of copyrights or other IP rights
Note that the Guidelines highlight the importance of distinguishing between (i) compensation for the deliverables that constitute the subject matter of the transaction and (ii) compensation for the transfer, assignment or licensing of intellectual property rights and other intangible assets associated with said deliverables
- Demands for uncompensated technical assistance, engineering support or prototype production
- Restrictions on patent applications imposed by stronger counterparties
- Unilateral shifting of damages or litigation risks relating to IP disputes
- Exclusive ownership claims over jointly developed IP or restrictions on the use of joint research outcomes
Competition policy recommendations under the AMA
To prevent violations of the prohibition on abuse of a superior bargaining position, the JFTC emphasizes the importance of transparent and good-faith negotiations. The Guidelines encourage undertakings to clearly present transaction terms in advance, explain the reasons for them, conduct sufficient consultations before finalizing agreements, avoid treating conditions merely as customary industry practices, document agreed terms in writing and maintain appropriate records.
Enforcement of the AMA and the Guidelines
The SMEA had already launched a transaction investigation team called the "IP Transaction G-Men" (G-Men) before the Guidelines were published. In addition, an information-sharing framework has been established via the Intellectual Property Management Support Network. Using this framework, the JPO, the National Center for Industrial Property Information and Training, the Japan Patent Attorneys Association, the Japan Chamber of Commerce and Industry and the SMEA share information with the G-Men. These networks are increasingly functioning as a channel for receiving information and reports of potentially inappropriate IP-, know-how- and data-related transactions. The G-Men also distribute flyers containing checklists of potentially unfair transaction practices and encourage SMEs being subjected to them to actively report them to the G-Men. Problematic practices can also be identified through routine IP consultations or interviews conducted by the G-Men and subsequently shared with the JFTC and other relevant government agencies. Accordingly, enforcement of the AMA and the Guidelines should not be viewed solely as a matter of unilateral action by the JFTC. Information relating to potential violations is gathered through multiple channels. The existence of this cross-ministerial monitoring and information-sharing framework is an important consideration for large companies and other businesses that may be considered to occupy a superior bargaining position vis-à-vis their counterparties, making it particularly important that such businesses ensure full compliance with the AMA and the Guidelines.