February 22, 2013
On February 20, 2013, the European Commission (the Commission) published drafts of proposed new versions of the EU Technology Transfer Block Exemption Regulation (TTBER) and Guidelines, which set out proposed revisions to the EU antitrust rules on technology transfer agreements such as patent, knowhow, and software licensing agreements.
Following an earlier public consultation on the operation of the current system, the Commission has proposed these new versions to replace the existing rules, which expire on April 30, 2014. The Commission is inviting further comment on the proposals. The deadline for comments is May 17, 2013.
The main proposed changes are as follows:
- Revised scope of application. The TTBER would apply only when certain other block exemptions are not applicable (i.e., block exemptions on R&D agreements and specialisation agreements), and would apply to certain obligations that are distinct from the technology license (i.e., agreements to purchase material/equipment from a licensor, or agreements to use a licensor’s trademark) only if these obligations are directly and exclusively related to what the licensee produces with the licensed technology.
- New market share threshold for certain agreements. The market share threshold for agreements between non-competitors would be lowered from 30 percent to 20 percent where a licensee owns a competing technology that it uses exclusively in-house.
- Removal of safe harbour protection for certain provisions. Certain clauses commonly used in licensing agreements would no longer automatically benefit from the safe harbour of the TTBER, but would instead require individual assessment of their likely competitive effects. This would include: (i) exclusive grant-back clauses that require the licensee to grant back improvements exclusively to the licensor; (ii) termination clauses that permit the licensor to terminate the agreement if the licensee challenges the validity of the licensed technology; and (iii) passive sales restrictions that prevent licensees from making passive sales into the exclusive territories of other licensees for the first two years of an agreement between non-competitors.
- New guidelines on settlement agreements and technology pools. The Guidelines include new sections on (i) settlement agreements, to address potential concerns about some no-challenge clauses and what the Commission describes as "pay-for-delay" settlement agreements, and (ii) technology pools, to provide a clear safe harbour for creating and licensing out from the pool, to clarify the application of the TTBER to agreements between the pool and third parties, and to clarify when technologies within the pool may be considered complementary or essential.
Further information, including the text of the proposed regulation and guidelines, is also available on the Commission’s website at http://ec.europa.eu/competition/consultations/2013_technology_transfer/index_en.html