European Commission reviewing the new EU Technology Licensing Regime

30 April 2013

Richard Eccles

The European Commission is currently revising the EU competition rules for the assessment of technology licensing agreements, in particular the Technology Transfer Agreements block exemption Regulation and the related Guidelines on the application of EU competition law to technology licensing agreements.

Bird & Bird's EU & Competition Law Group is making a submission to the Commission concerning the proposed changes, based on our views and those of our clients.  The deadline for submissions is 17th May 2013.  If you would like to contribute any comments on the proposed changes, and in any event if you would like to see the draft of our submission, please do not hesitate to contact one of our partners detailed below.

The objective of the Regulation is to create a degree of legal certainty which will help encourage the determination of technology, and encourage research and innovation, whilst at the same time balancing the objective of stimulating competition.

The Regulation is important because it provides automatic exemption for agreements falling within its scope (by reference to the market shares of the parties and the contents of the agreement) and sets out a benchmark for the individual assessment under EU competition law of agreements which do not fall fully within the scope of the Regulation, reinforced by the Guidelines.  The new Regulation will replace the current block exemption Regulation, which expires in April 2014. The new Regulation will continue in force for twelve years (to April 2026) and it is therefore important to raise concerns with the Commission now, because the resulting legislation will remain in place for a relatively long period.

The draft Regulation contains some amendments which may not be welcome to licensors of technology, as they remove some long-established general permissions and instead require that such provisions be individually assessed under EU competition law.  These include the following:

the removal of permission for restrictions (in agreements between non-competitors) on passive sales into territories exclusively allocated to another licensee;

the removal of permission for a right of termination of the licence in the event of a challenge to the validity of the licensed intellectual property rights; and

the exclusion of any assignment or exclusive licence obligation on the licensee in respect of the licensee's improvements, whether or not they are severable from the licensor's technology (in contrast to the present position where only such provisions in respect of severable improvements are excluded).

These issues and others are fully explained in our draft submission which we will be happy to share with any of our clients or contacts who express interest.

For further information, please contact:

Richard Eccles
richard.eccles@twobirds.com

Pauline Kuipers
pauline.kuipers@twobirds.com

Joerg Witting
joerg.witting@twobirds.com

Authors