The new Technology Transfer Block Exemption — a review of the main changes

By Isabel Napper and Isabel Teare

Technology businesses should be aware that the European Commission has revised the rules on how EU competition law affects technology licensing agreements. The new Technology Transfer Block Exemption (TTBER) with its accompanying guidelines replaces the 2004 version as of 1 May 2014. The TTBER is important for technology companies so that they can avoid falling foul of competition law restrictions. It applies to licences of patents and supplementary protection certificates (SPCs), know-how, semiconductor topographies, software and designs for the production of goods or services. The guidelines give important guidance for patent pools and standards and for settlement agreements.

Technology licences commonly contain restrictions: an exclusive licence, for example, gives the licensee the right to use the technology in the specified field and location to the exclusion of all others, including the licensor. Restrictive agreements may contravene EU competition law (primarily article 101 of the Treaty on the Functioning of the EU). But the EU Commission acknowledges that these agreements can be beneficial. For example, technology licences spread innovation and provide incentives for research and development. So it has set up a series of safe harbours (the block exemption regulations) to give permission to certain types of restrictions in agreements.

Licensing of technology-related rights between two organisations is controlled by the TTBER. This law comes up for renewal every 10 years or so — the last one was settled in 2004. A tussle has played out since 2011 between users of the system and the EU Commission, the commission seeking to tighten restrictions on licensing with users arguing for liberalisation of the rules…

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