Antitrust: Commission consults on proposal for revised competition regime for technology transfer agreements

Brussels, 21-2-2013 — /europawire.eu/ — The European Commission invites comments on a proposal for new competition rules for the assessment of technology transfer agreements, through which a licensor permits a licensee to exploit patents, know-how or software for the production of goods and services. The proposal aims to update the current regime in order to strengthen incentives for research and innovation, facilitate the diffusion of intellectual property and stimulate competition. In light of stakeholders’ submissions, the Commission will adopt a new regime before April 2014.

Licensing is vital for economic development and consumer welfare as it helps to disseminate innovation and allows companies to integrate and use complementary technologies. However, licensing agreements can also have a stifling effect on competition. For instance, two competitors could use a license agreement to divide markets between them or an important licensor could exclude competing technologies from the market through conditions in its licensing agreements. Anticompetitive agreements are prohibited by Article 101 of the Treaty on the Functioning of the European Union (TFEU). The way intellectual property right holders license their rights to other market participants is crucial for stimulating innovation and preserving a level playing field in the internal market.

The current regime consists of two instruments. First, a block exemption regulation (TTBER) creates a so-called “safe harbour” for certain unproblematic agreements which are deemed to be compatible with EU rules. Second, Commission Guidelines provide guidance on the assessment of technology transfer agreements under EU competition rules. Based on these Guidelines, companies can assess whether the agreements they conclude are anticompetitive and could infringe Article 101 TFEU.

In light of responses to a first public consultation in December 2011, the Commission is proposing some changes to the current regime (see MEMO/13/120). In particular, certain types of agreements or clauses such as the possibility to terminate an agreement if a licensee challenges the validity of the IPR or all sorts of exclusive grant-backs that oblige to license back to the licensor improvements made by the licensee would not be automatically exempted but would have to be assessed on a case-by-case basis because they might stifle competition or innovation. The Commission also proposes to update the Guidelines, in particular to include new provisions on “patent pools”, i.e. multilateral patent licensing agreements.

Replies to the consultations can be submitted until 17 May 2013. The consultation documents are available at:

http://ec.europa.eu/competition/consultations/2013_technology_transfer/index_en.html

Background

On 6 December 2011, the Commission launched a first public consultation on the current technology transfer regime (see MEX/11/1206). The consultation ended on 3 February 2012. 38 replies were received, mainly from law firms, law associations and industry associations, but also from several companies and citizens. All replies are available here.

A majority of stakeholders considered that the present system is largely satisfactory, both the TTBER and the Guidelines are regarded as useful and important tools for the industry. Many respondents also made suggestions for incremental improvements in both the TTBER and the Guidelines.