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  5. English Translation Version of the Contract Guidelines on Utilization of AI and Data Released

English Translation Version of the Contract Guidelines on Utilization of AI and Data Released

April 4, 2019

The Ministry of Economy, Trade and Industry (METI) hereby releases the English translation of the Contract Guidelines on Utilization of AI and Data, the Japanese version of which was formulated in June 2018. Concerning contracts for utilization of data or for development and utilization of software using AI technology, the guidelines provide: main issues, points of contention, model contract clauses, factors to be considered in contract preparation and other elements.

1. Background

In June 2018, METI formulated the Contract Guidelines on Utilization of AI and Data, aiming to provide a reference for businesses in concluding contracts for utilization of data or for development and utilization of software using AI technology. The guidelines provide: main issues, points of contention, model contract clauses, factors to be considered in contract preparation, and other elements concerning such contracts.

In practice, the guidelines have been referred to by many businesses and research institutions in preparing contracts for data utilization or development of AI technology. Meanwhile, METI has received many opinions from inside and outside Japan asking for the publication of an English translation of the guidelines because many transactions involving data utilization and development of AI technology are conducted between domestic and overseas parties, as well as because the guidelines provide exceptional, specific explanations on types of contracts, which a growing number of multinational businesses are interested in.

To address such requests and to assist lawyers, engineers, researchers and business owners from around the world refer to the details of the guidelines, METI has produced the English translation version of the guidelines.

Note: This English version is a translation of the original Japanese guidelines, which are governed by Japanese laws. Consideration on non-Japanese laws would be necessary when drafting contracts with foreign businesses or those that are not governed by Japanese laws.

2. Outline of the guidelines

(Note: The following parts are excerpts from the press release concerning the Contract Guidelines on Utilization of AI and Data from June 15, 2018.)

The guidelines consist of two sections: 1. Data Section and 2. AI Section. Both sections of the guidelines aim to provide a reference for contracting parties in determining contract clauses and other necessary points. However, METI expects parties who intend to make such contracts to prepare unique contracts while referring to the guidelines.

Data Section

  1. Objectives
    The objectives of the Data Section are to help businesses reduce the costs of implementing a data utilization contract due to lack of experience in implementing such contracts, popularize the use of data utilization contracts, and promote effective data utilization. To achieve these objectives, METI described the main issues associated with different types of data utilization contracts and points of contention, provided contract clause examples, and noted factors to be considered in contract preparation.
  2. Targeted readers
    The data section was prepared for a wide range of people involved in concluding contracts, including business operators, associated business and management units, and parties developing systems for data distribution and utilization.
  3. Outline
    This section categorizes data utilization contracts into three types: data provision, data creation and data sharing (platform type), and explains structures, main legal issues and proper contract preparation processes for each contract type. This section also provides model contract clauses for data provision-type and data creation-type contracts.

AI Section

  1. Objectives
    The objective of the AI Section is to promote the development and utilization of AI technology among companies by explaining characteristics and basic concepts of AI technology and by describing other fundamental concerns, such as factors to be considered in preparing contracts related to the development and utilization of software that uses AI technology and methods of preventing problems, etc.
  2. Targeted readers
    This section was prepared for companies of all scales, including large corporations (e.g., major IT vendors) and small to medium-sized businesses (e.g., venture companies).
  3. Outline
    The AI Section first explains the basic concepts of AI technology and features of software development using AI technology. The AI Section then proposes “Exploratory Multi-phased” AI development processes which consist of (1) the assessment phase, (2) the PoC phase, (3) the development phase and (4) the retraining phase. The AI Section further describes types of contracts and factors to be considered in contract preparation, with model contract clauses provided.

Reference:

Division in Charge

Information Economy Division, Commerce and Information Policy Bureau, METI

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