Competition rules for assessing technology transfer agreements are being revised to increase incentives for research and innovation, facilitate the dissemination of intellectual property and stimulate competition. The European Commission submitted to a public consultation, on 20 February, the changes it is considering making to the existing scheme in light of submissions to an initial consultation carried out in December 2011.

Technology transfer agreements are licensing agreements whereby an individual, company or organisation authorises another person, company or organisation to use its technology (patents, know-how or software) for the production of goods or services. They are a key element for disseminating innovation, which enables companies to integrate and use complementary technologies and therefore contribute to the EU's economic development.

However, licensing agreements can also have the effect of restricting competition if they are used to divide markets or shut out competing technologies through specific clauses. Such anti-competitive agreements are banned by Article 101 TFEU. For agreements of this kind to be compatible, the beneficial effects must outweigh possible restrictions of competition and their effectiveness will depend on the market power of the companies concerned.

To date, the EU executive has assessed the legality of such agreements under the Block Exemption Regulation 772/2004, which contains provisions for certain types of agreements that are considered automatically compatible and under accompanying guidelines. It considers that, up to a market share of up to 20%, agreements between competitors are not considered problematic. The threshold is 30% for agreements between non-competitors.


With this regime due to expire in April 2014, the Commission wishes to make certain changes in the new version. First, it explains that the block exemption regulation will apply only if the regulations on research and development or...

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