The European Commission has announced that a new Technology Transfer Block Exemption Regulation (“TTBER”) will apply from 1 May 2014 and replace the existing framework which expires on 30 April 2014. The TTBER is relevant to anyone involved in the licensing of technology.
The TTBER contains transitional provisions which mean that the previous regulation will continue to apply to technology transfer agreements put in place before 30 April 2014, until 30 April 2015.
As we all know (!), Article 101 of the EU Treaty prohibits agreements or practices that prevent, restrict or distort competition within the EU. On the face of it, a licence of intellectual property rights could breach that general prohibition as it can restrict who is entitled to use those intellectual property rights. The TTBER, however, provides circumstances in which contractual terms used in the licensing of patents, know-how and software are automatically exempt from those rules. Essentially, the TTBER is a safe harbour – if an agreement falls within the TTBER, it is exempt from the rules of competition law.
The TTBER also provides a list of “hardcore” and “excluded” restrictions that influence whether (and to what extent) the exemption can be relied upon. The TTBER has streamlined the lists of “hardcore” restrictions. It also provides additional guidance on the calculation of the market share of a licensor on the relevant technology market.
The Guidelines contain updated guidance on technology pools. The TTBER applies only to bilateral agreements and therefore does not apply to patent pools. The Guidelines do, however, provide guidance on when the Commission considers that the creation of a technology pool, and the licensing of technology by the pool to third parties, do not breach Article 101. This means that parties to an agreement can structure their arrangements to ensure it complies with the TTBER and the conditions set out in the Guidelines.
It is important, when considering whether to enter into an agreement in the technology markets, to take advice on whether the agreement will fall within the TTBER and, if not, whether it complies with general competition law principles.
We have specialist Competition Law and Technology teams so please do get in touch if you’d like to discuss this further.
On April 3, 2014