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Ministry
of Economy, Trade and Industry
Issue
4 of the Manufacturing Industries Bureau, June 12, 2002
July 12, 2002
Iwao
Okamoto
Director-General of the Manufacturing Industries Bureau
Shinichiro
Ota
Director-General of the Commerce and Information Bureau
Guidelines on Prevention of Unintentional Outflows of Die/mould Blueprints
and Processing Data
A practice has recently been brought to light in the Diet and newspaper
reports whereby in the outsourcing of the manufacture of die/moulds,
the die/mould blueprints and processing data (hereafter referred to
as "die/mould blueprints") containing the know-how of the
manufacturer are sent to the company that filled the order (hereafter
referred to as "the user"), at the user's request, supposedly
for the purpose of maintenance, and then they are used overseas to create
a second die/mould or similar type of die/mould for a manufacturing
consignment, without the agreement of the die/mould maker.
A survey carried
out by the Japan Die and Mold Industry Association, the organization
representing die/mould manufacturers, also showed that most of its members
have experienced similar situations. The Association has come up with
a plan to get a more detailed picture and seek a resolution of this
issue. Furthermore, because it is difficult for the Association to solve
the problem on its own, the Ministry of Economy, Trade and Industry
(METI) has received a request for comprehensive guidance on this issue
from the association.
Based on this request,
the ministry has carried out a survey on the state of affairs in trading
of die/moulds made under consignment, in which it interviewed both makers
and users. The results of that survey made the following facts clear:
- Die/mould manufacturers
have not done enough to protect and manage their own intellectual
property. For example, die/mould manufacturers are not treating die/mould
blueprints which contain their know-how as secret. As a result, the
likelihood of die/mould blueprints receiving protection as trade secrets
under the Unfair Competition Prevention Law is significantly reduced.
- In most cases
of the transfer of die/mould blueprints no contract has been made.
Firstly, the rights of the two parties to the die/mould blueprints
are not clearly defined by the parties, and it is not clear whether
the die/mould blueprints have been given to the user along with the
manufactured items, or whether they have merely been loaned to the
user at no charge for the sole purpose of maintenance. As a result,
some users' unilateral interpretation is that they have acquired the
rights to the die/mould blueprints, and in some instances the user
has had an overseas die/mould manufacturer make die/moulds based on
the die/mould blueprints. Secondly, even though both the manufacturers
and the users are aware that the die/mould blueprints contain the
know-how of the die/mould manufacturer, there are many cases where
there is no obligation on the user to keep that information secret.
As a result, there are cases of users providing die/mould blueprints
to overseas contractors without imposing any secrecy obligation on
them.
- Most die/mould
manufacturers find it psychologically difficult to refuse to hand
over die/mould blueprints or to demand reasonable compensation for
them. Most manufacturers are small or medium-sized enterprises, and
as subcontractors are heavily reliant on orders. For this reason they
fear losing business from users in the future. So for many die/mould
manufacturers, when they make a deal with a user it is psychologically
difficult for them to insist upon their rights.
There is a concern
that if we do nothing and allow this unintentional outflow of die/mould
technology to continue, the technology and know-how accumulated by manufacturers
over time will be transferred to foreign companies more than is necessary,
and that this will weaken the international competitiveness of the die/mould
industry which is the foundation of Japan's manufacturing industry as
a whole. For this reason, METI is presenting guidelines concerning the
trade in die/mould blueprints and the management and protection of die/mould
technology, aimed at users and die/mould manufacturers. We request that
the relevant organizations make these guidelines known to their subsidiaries
and affiliates.
Finally, METI will
continue to conduct surveys of the trade in die/mould blueprints at
regular intervals, even after these guidelines have been established.
The ministry will carry out additional measures as necessary on the
basis of those results.
Details
1. The Conclusion of Contracts
When die/mould
manufacturers engage with users in outsourcing the manufacturing of
die/moulds, they must endeavor to make the conclusion and the content
of the contract as clear as possible, as follows:
- When trading
die/moulds, verbal contracts can lack clarity in comparison to written
contracts and there is a danger that this will lead to conflicts at
a later date. Correspondingly, the parties to a trade in die/moulds
must endeavor to conclude a written contract that accurately reflects
the actual coverage of the contract. However, if there are items commonly
used in a number of trades, a basic contract may be created.
- There are many
situations in which the know-how of both the die/mould manufacturer
and the user are contained in the die/mould blueprints. Therefore,
when it comes to the attribution of know-how it is necessary to sufficiently
determine the intellectual contribution to the traded items of both
the user and die/mould manufacturer, and then endeavor to specify
the relative contributions very clearly in the written contract.
- The parties
must endeavor to conclude a nondisclosure agreement to protect intellectual
property.
- The parties
must endeavor to come up with a fair and clear approach to providing
financial compensation for technical know-how in the event that the
transfer of die/mould blueprints leads to the transfer of such knowledge
from one of the parties to the other.
2. Measures
Aimed at the Management and Protection of Technology and Know-how
Die/mould manufacturers
must endeavor to appropriately manage and protect the intellectual assets
contained in die/mould blueprints, as stated below. Furthermore, when
managing and protecting intellectual property overseas, it is necessary
to obtain intellectual property rights in the overseas country concerned.
- There are many
kinds of die/mould technology, such as resin flow, cavities, and parting.
If a progressive invention is made in the field rather than just a
design change, the inventor must endeavor to obtain a patent for it.
And, if someone comes up with a new idea related to the shape, structure
or assembly of die/moulds, then the inventor must endeavor to protect
the idea under the utility model registration system (a registration
system which does not require an examination). However, be aware that
upon filing an application for a patent or utility model registration
the filing documents and drawings will all be made public
- The inventor
must endeavor to protect any new die/mould design that is acknowledged
to have an innovative shape and so to be creative under the Design
Law. Furthermore, if the inventor wishes to prevent the public disclosure
of his or her know-how, he or she can register with the secret design
system which prevents public release of the information for a maximum
of three years.
- If there is
written material in the die/mould blueprints that is acknowledged
to be creative in its expression, then the writer can rely on the
copyright for protection. However, be aware that technical know-how
itself will not be protected this way. Furthermore, making a die/mould
based on a blueprint is generally not considered to be illegal copying
of a copyrighted item.
- Information
in die/mould blueprints that is related to useful technology that
has not been made public, and business-related information, is protected
as a trade secret under the Unfair Competition Prevention Law. For
this reason, it is necessary to treat die/mould blueprints as a trade
secret by, for example, attaching a Top Secret label, and concluding
non-disclosure agreements.
3. Fair Trade
and the Prevention of Unfair Competition
The user, upon
engaging as a contractor in the manufacturing of die/moulds, must heed
the following points and do business in line with the law.
- The Unfair Competition
clause of the Unfair Competition Prevention Law may be applicable
to any party who acquires a trade secret concerning die/mould blueprints
through unfair means, or who fairly receives such information but,
in order to gain an unfair profit, or in order to economically damage
the owner of the die/mould blueprints, discloses that information
to a third party.
- The "Abuse
of a Superior Position" clause of the Anti-Monopoly Law may be
applicable to any user who uses his or her stronger business position
to unfairly assume the rights to die/mould blueprints.
Ends
Note: The content
of these guidelines does not place restrictions on the right to make
legal judgments, or to apply those judgments and the related penalties
of related administrative institutions and investigative authorities.
To:Katsuhiro Ueda
Chairman, Japan Die and Mold Industry Association
To:Yoshihide Munekuni
Chairman, Japan Automobile Manufacturers Association, Inc.
To:Haruo Ohno
Chairman, Japan Auto Parts Industries Association
To:Ichiro Taniguchi
Chairman, Japan Electronics and Information Technology Industries Association
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