The European Commission has adopted new rules for the assessment of technology transfer agreements under EU antitrust rules.

The aim of technology transfer agreements is to enable companies to license the use of patents, know-how or software held by another company for the production of goods and services.

The revised rules facilitate such sharing of intellectual property, including through patent pools, and provide clearer guidance on licensing agreements that stimulate competition. They also aim to strengthen incentives for research and innovation.

Licensing is key to spread innovation and allows companies to offer new products and services. It also strengthens incentives for research and development by creating additional revenue streams to recoup costs.

However, it can also be used to harm competition, for instance if two competitors in a licensing agreement divide markets between them instead of competing with each other. Another example would be a licensing agreement that excludes the use of competing technologies in the market. These and other anticompetitive agreements are prohibited by Article 101 of the Treaty on the Functioning of the European Union (TFEU).

The new regime provides better guidance to firms on how to license in ways that stimulate innovation and preserve a level playing field in the Single Market. It consists of the Technology Transfer Block Exemption Regulation (TTBER), which exempts certain licensing agreements from antitrust rules, and the Technology Transfer Guidelines, which provide further guidance on the application of the rules.

The main features of the new rules are the following:

• The revised regime continues to reflect that licensing is in most cases pro-competitive. The Commission has made incremental improvements to the current regime.
• New guidance on "patent pools": Patent pools can give companies cheaper and easier access to necessary intellectual property rights, such as standard essential patents, by establishing a one-stop-shop.
• A more prudent approach on clauses that could harm competition and innovation: Certain types of clauses are no longer automatically exempted from antitrust rules but have to be assessed case-by-case. These are clauses which allow the licensor to terminate a non-exclusive agreement if the licensee challenges the validity of the intellectual property rights, and clauses that force a licensee to license any improvements it makes to the licensed technology to the licensor on an exclusive basis.

The Guidelines also give guidance on settlement agreements in light of the Commission's recent experience.

Click here to access the new Guidelines