The Japan Fair Trade Commission published final revisions on 1 October 2026 to its operating standards under the subcontracting act and its interpretation guidelines under the freelance act. Both are interpretive texts under existing laws. The release announces no new statute and no enforcement case, though the JFTC says it will keep dealing strictly with violations, including in the intellectual property field.
The JFTC, the SME Agency and the Patent Office issued a guideline on IP, know-how and data transactions on 24 June 2026. The JFTC published its draft revisions the same day, took comments until 23 July, received 20 submissions and made technical changes only. The release gives no effective date.
Know-how now counts
The old text covered intellectual property rights. The revised operating standards cover "IP etc.": IP rights plus technical or business secrets, including know-how. When a contractor's transfer or licence of such rights is part of the deliverable, the client must state its scope and take it into account when setting the price. If the client takes the rights as a separate deal, it must make the scope and the payment clear.
The freelance guideline goes further on the first point only. Where the transfer is not part of the deliverable, clarifying its scope and price is "desirable", not required. In its replies, the JFTC defined know-how as material not protected as IP, such as drawings, recipes, process charts and ingredient tables.
The examples of improper requests were widened. A client that had a mould maker's design and processing data passed to a foreign manufacturer without payment is now an example. New ones include a character design commissioned for a poster and later used for merchandise with no further payment, and a promotional video whose copyright was taken without explaining the price breakdown.
Losses, not only costs
Where a client changes or redoes work, the text now says that failing to bear the contractor's "costs and losses" unduly harms the contractor, where it previously referred to costs. Exceptions remain where the contractor is responsible, for example when the change is made at the contractor's request or the deliverable differs from the specified order. A new case lists a client that forced a contractor to hold its schedule for a substantial period, then cancelled just before the work, leaving the contractor unable to take other work that day. The text says there is no contractor fault in that case, so the client cannot ask for changes without covering the full costs and losses. An existing haulage example, an order cancelled on the morning of delivery because the client's own customer cancelled, now refers to the losses the contractor incurred as well as its costs.
| Topic | Before | After |
|---|---|---|
| Rights covered | IP rights | IP rights plus technical or business secrets, including know-how |
| What a client bears after changes or redoes | Costs | Costs and losses |
| Late cancellation after a long schedule hold | No such case listed | Listed as a case with no contractor fault |
| Triggers for price talks | Cost changes, delivery terms, supply and demand, price-cut requests | Adds change in the economic value of a deliverable from wider IP use |
In its replies, the JFTC said the amount of loss is judged case by case. For a freelance event cancelled shortly before it was held, it said a client may breach the freelance act unless it pays an amount equal to the fee in the written notice. It said the same risk applies under the subcontracting act to service and specified-transport commissions unless the client pays an amount equal to the price. A cancellation policy agreed in advance is possible, but depending on its terms it can still breach the acts.
Price talks
The circumstances that oblige a client to negotiate on request now include a change in the economic value of the contractor's deliverable, including any IP transfer or licence, caused by wider use of the IP. Under the operating standards, a client is treated as refusing to negotiate or to give needed explanation if the contractor asks about the IP price, or for revenue sharing, and the client gives no specific explanation and either keeps the old price or presents a lump sum it set itself. If the client thereby decides the price unilaterally, the ban on unilateral price setting applies.
The JFTC told commenters that it does not require revenue sharing or any particular payment method. It also said the rule concerns the pricing process, not a retroactive top-up of a price already agreed.