Another declaration driven by the Japanese government during coronavirus pandemic

In the coronavirus (COVID-19) pandemic, we have been waiting eagerly for development of therapeutic drugs and vaccines. However, some people are afraid that patents become an obstacle to development of such therapeutic methods. So, there is a movement to pledge or declare not to enforce patents and other intellectual property rights for solutions for coronavirus; e.g. ‘Open COVID Pledge’ in the US and ‘OPEN COVID-19 DECLARATION’ in Japan.

Due to this pandemic, the Japanese government declared a state of emergency on April 7 2020, and economic activities almost stopped. Even after the state of emergency lifted on May 25, the economic activities are still limited. So, many companies are damaged. In this situation, the government is initiating another declaration campaign, called ‘Partnership Building Declaration’. It aims at promoting a sustainable alliance between large enterprise and SME. In short, it is to make large enterprises promise not to prey on SMEs or their subcontractors.

The prepared template of the declaration includes the following clauses:

Price Determination

We will not make unreasonable cost reduction requests. When we receive a request from a subcontractor for discussion about the price, we will fully discuss with them so that the subcontractor can gain an appropriate profit, considering the impact of the increase in labor costs etc.

Intellectual Property / Know-How

We will not request for execution of unilateral confidentiality agreements, disclosure of know-how, gratuitous transfer of intellectual property rights etc., by using our position in the transaction.

You may think they are a matter of course. As reported in our previous articles (See below), however, in Japan, unfair trade with subcontractors or SMEs, where large enterprises take advantage of their superiority, has been a problem. If you are interested, please see the following articles.

Not sure how many companies will make this declaration. But it is clear that in the future, large enterprises will no longer be able to get out of the crisis at the expense of SMEs. Hope that large enterprises and SMEs will build fair partnerships and leverage their respective strengths to regain their presence in the global market.

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