European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Regulation No 2023/1066 of 1 June 2023 on the application of Article 101(3) TFEU to categories of research and development agreements defines this activity as those "aimed at acquiring product know-how, or processes and the carrying out of theoretical analysis, systematic study or experimentation, including experimental production, technical testing of products or processes, the establishment of t …

Research and development agreements

Regulation No 2023/1066 of 1 June 2023 on the application of Article 101(3) TFEU to categories of research and development agreements defines this activity as those "aimed at acquiring product know-how, or processes and the carrying out of theoretical analysis, systematic study or experimentation, including experimental production, technical testing of products or processes, the establishment of the necessary facilities and the obtaining of intellectual property rights for the results” (Article 1(1)(3)). Research and development or exploitation of the results are carried out “jointly” where the work involved is, (i) carried out by a joint team, organization or undertaking, (ii) jointly entrusted to a third party, (iii) allocated between the parties by way of specialization in research, development, production or distribution (Article (1)(1)(10)).

Article 101 does not apply to R&D agreements when the parties pursue either joint research and development of products or processes and joint exploitation of the results of that research and development, or either of those activities in isolation (Article 1). The exemption also applies to provisions contained in research and development agreements which do not constitute the primary object of such agreements but are directly related to and necessary for their implementation (Article 2). Where the parties are not in competition with one another, the exemption is granted for the entire duration of the research and development activity and for joint exploitation of the results it continues to apply for a period of seven years from the time the contract products are first put on the market within the internal market. If the undertakings are competing undertakings, the regulation lays down a threshold beyond which exemption is not automatic. The combined market share of the participating undertakings must not exceed 25% of the relevant market for the products capable of being improved or replaced by the contract products (Article 6). It is calculated on the basis of the value of sales on the market in the previous calendar year, or, in the absence of data on the value of sales on the market, on the basis of sales volumes on the market (Article 7). At the term of the agreement or the 7 year period the parties still enjoy the benefit of the exemption as long as market share does not exceed 25%.

All the parties must, in any event, have access to the results of the joint research and development for the purposes of further research or exploitation. Any joint exploitation must relate to results which are protected by intellectual property rights or constitute know-how, which substantially contribute to technical or economic progress. Furthermore, the results must be decisive for the manufacture of the contract products or the application of the contract processes. Undertakings charged with manufacture by way of specialization in production must be required to fulfill orders for supplies from all the parties (Article 3).

Article 5 of the regulation lists a certain number of black clauses not covered by the block exemption: as well as the provisions on limiting production or sales, price fixing and allocation of clientele common to Block Exemption Regulations generally, it also includes other hardcore restrictions. The participating undertakings must remain free to carry out research and development independently in a field unconnected with that to which the research and development relates, in the field to which it relates or in a connected field. The freedom to challenge the validity of intellectual property rights after expiry of the agreement must not be restricted. Any prohibition on passive or active sales, the granting of licenses to third parties concerning the manufacture of the contract products or application of the contract processes or cross-supplies or measures contrary to the principle of exhaustion of rights, are restrictive clauses and prevent the benefit of the exemption from being accorded. Regulation No 1217/2010 now also addresses “red clauses” which lead to refusal of the exemption for specific obligations without refusing exemption for the contract as a whole. Article 6 thus excludes from exemption the obligation not to challenge after completion of the research and development the validity of intellectual property rights which the parties hold in the internal market and which are relevant to the research and development and the obligation to subject the granting of licences to third parties to the application of the contract technologies to the exploitation within the internal market by at least one of the parties of the results of the joint research and development or paid-for research and development.

European Competition Law

97. Research and development agreements

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Les notions juridiques connexes

97. Research and development agreements

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Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise