European Commission adopts revised Block Exemption Regulation for Technology Transfer Agreements

25 March 2014

At its meeting on March 21, 2014, the European Commission has adopted the revised block exemption regulation for technology transfer agreements, the so-called TT-BER, together with the relating guidelines for technology transfer agreements (TT-Guidelines),

The TT-BER together with the TT-Guidelines provides the core competition law framework for technology licensing and is therefore of particular importance for companies in technology-driven businesses.

Although the new TT-Regime maintains the general principles and structure of the TT-BER which remains in place until 30 April 2014, the new regulation contains some important changes, in some instances even deviating from the current TT-Regime, in particular:

More prudent approach on clauses potentially harming competition

The Commission waives the automatic block exemption for certain types of clauses opting for a case-by-case assessment instead. This important change of approach was particularly debated regarding termination clauses in the event of validity attacks. The block exemption for this type of termination clauses in the current TT-BER will be waived and replaced by a more strict case-by-case approach for termination clauses in non-exclusive license agreements. Only termination clauses in exclusive licenses will remain under the automatic block exemption; specific rules apply to know-how licenses. Other topics which have been subject to changes are clauses forcing the licensee to grant the licensor an exclusive license for any improvements to the licensed technology. Whereas the former TT-BER exempted obligations for grant-back of rights on non-severable improvements to intellectual property developed by the licensee, under the new regulation even this exception shall be waived. Thus, the only option for the licensor will be to require grant-back of rights on any kind of improvements of the licensed technology on a non-exclusive basis.

Safe harbor for patent pools

The Commission acknowledges the pro-competitive effects of patent pools, in particular in the context of standardization, and provides “safe harbor” rules for patent pools in the revised section of the TT Guidelines.

Settlement agreements

The Commission’s experience in the effects of settlement agreements on competition is reflected in a revised chapter in the TT-Guidelines.

The new TT-BER will enter into force on 1 May 2014. Although agreements concluded until 30 April 2014 and covered by the current TT-BER will remain exempted until 30 April 2015, it is important to make oneself familiar with the new TT-Regime as soon as possible and, at least for ongoing or planned license negotiations, to take into account the new rules immediately.