Legal Alerts / 30 Apr 2014

Legal Alert – New Rules for Technology Transfer Agreements Entering into Force Tomorrow

Background

The Commission’s Block Exemption Regulation (EU 316/2014) and new guidelines on technology transfer agreements (TTBER and Guidelines) will enter into force tomorrow (1 May 2014). From this date onwards new agreements must meet the conditions provided by these rules in order to be considered exempt from the prohibition contained in article 101 of the Treaty. In addition, technology transfer agreements concluded under the old regime will have to conform to the conditions of the TTBER by 30 April 2015 in order to continue benefitting from the safe harbor exemption.

Technology transfer agreements are agreements through which a licensor permits a licensee to exploit patents, know-how or software for the production of goods and services.

The main features of the new rules

  • The new Regulation is not applicable to those agreements covered by the TTBER on the exemption of research and development (R+D) agreements or the Regulation on the exemption of specialization agreements.
  • The TTBER is applicable to technology transfer agreement provisions governing the acquisition of raw materials or the assignment of machinery by the licensor to the licensee, even where the value of this transaction is higher than that of the technology license.
  • Any restriction on passive sales between licensees shall be considered a particularly serious restriction entailing the exclusion of the agreement from the safe harbor of TTBER, which will need to be analyzed on a case-by-case basis pursuant to the direction provided in the Guidelines.
  • The safe harbor does not apply to the obligation to grant an exclusive license in respect of the licensee’s improvements to the licensed technology.
  • Any obligation on the licensee not to challenge the validity of intellectual property rights held by the licensor in the EU is excluded from the safe harbor, as are clauses providing for the termination of a technology transfer agreement in the event that the licensee challenges the validity of the licensed technology in the case of a non-exclusive agreement.
  • The new Guidelines focus on settlement agreements that may delay or limit the licensee’s capacity to launch the product in any of the affected markets.
  • The new Guidelines also introduce changes in the analysis of technology pools.
     

Case-by-case consideration needed

Although the new rules bring changes to exclusive grant-back obligations and certain types of clauses are no longer automatically exempted from antitrust rules, there is a space for case-by-case discretion. In general, we consider that the changes under the TTBER and its accompanying new Guidelines are to be considered as successful improvements. There is no need for major changes in licensing policies. 

For more information

Ilkka Aalto-Setälä
Asko Lindqvist
Henriikka Piekkala 

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