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Regulation No 316/2014 of 21 March 2014  has replaced and repealed Regulation No 772/2004 of 7 April 2004 . The revised regulation aims essentially to facilitate the sharing of intellectual property and to strengthen incentives for research and innovation. Like its predecessor, the new text presumes that agreements falling under its scope are lawful . The text is supplemented by guidelines so that …

Technology transfer agreements

Regulation No 316/2014 of 21 March 2014  has replaced and repealed Regulation No 772/2004 of 7 April 2004 . The revised regulation aims essentially to facilitate the sharing of intellectual property and to strengthen incentives for research and innovation. Like its predecessor, the new text presumes that agreements falling under its scope are lawful . The text is supplemented by guidelines so that the parties may assess their agreements themselves .

Technology transfer agreements are favorably assessed by competition authorities since they “will usually improve economic efficiency and be pro-competitive as they can reduce the duplication of research and development, strengthen the incentive for the initial research and development, spur incremental innovation, facilitate diffusion and generate product market competition” . They promote innovation, increase the diffusion of technologies, and reduce the costs of production and research and development . The new regulation will only be applicable to research and development agreements if the block exemption regulations (No 330/2010, No 1217/2010 on research and development agreements and No 1218/2010 on specialization agreements) do not apply to them. Likewise, agreements on the purchase of raw materials and equipment will be covered if they are directly related to production or the sale of the contract products made using the licensed technology.

The Regulation deals with all agreements by which a licensor permits the licensee to exploit the licensed technology, possibly after further research and development, for the production of goods and services . The text refers to pure patent, know-how and copyright licensing agreements, but also to mixed, equivalent agreements , or agreements including ancillary clauses . On the other hand, licensing agreements for the purpose of subcontracting research and development are excluded, as well as those aimed at setting-up technology pools .

Pursuant to Article 2, Article 101(1) does not apply to technology transfer agreements entered into between two undertakings permitting the production of contract products where the market share held by the undertakings party to the agreement does not, on the affected technology and product markets, exceed 20% where the parties are competing undertakings , or 30% where they are not . Beyond such thresholds, individual exemptions are still possible. The exemption does not apply to agreements containing any hardcore restrictions . To avoid exclusion from the benefit of the exemption, agreements between competitors must not therefore contain any clauses imposing prices, limiting production, or allocating markets or customers . The licensee must not be prevented from exploiting his own technology and each party must be free to carry out research and development, provided that the secret of the licensed know-how is protected . Likewise, agreements between non-competing undertakings must not contain clauses imposing prices, without prejudice to the possibility of imposing a maximum sale price or recommending a sale price, or contain restrictions of territory or clientele relative to passive sales , or restrict active or passive sales to end-users by a licensee who is a member of a selective distribution system and operates at the retail level on the market .

Article 5 moreover draws up a list of excluded restrictions that must be individually assessed  but of which the illegality has no impact on the agreement itself. For agreements between competing undertakings, the exemption does not apply to the direct or indirect obligation on the licensee to grant an exclusive license or to assign rights, in whole or part, to the licensor or to a third party designated by the licensor in respect of its own severable improvements to or its own new applications of the licensed technology , or not to challenge the validity of intellectual property rights which the licensor holds within the Union without prejudice to the possibility, in the case of an exclusive licence, of providing for termination of the technology transfer agreement in the event that the licensee challenges the validity of any of the licensed technology rights . In agreements between non-competing undertakings, the exemption will not apply to any direct or indirect obligation limiting the licensee's capacity to exploit its own technology or limiting the ability of any of the parties to the agreement to carry out research and development, unless such latter restriction is indispensable to prevent the disclosure of the licensed know-how to third parties .

Exemption may be withdrawn for agreements which do not meet one or more of the conditions set forth in Article 101(3) TFEU even though the agreement in question falls within the scope of application of the regulation . Such is the case where access to the market is restricted by the cumulative effect of parallel networks of similar restrictive agreements , or where the parties, without any valid reason, do not exploit the licensed technology . The Commission may also, by a decision of non-application, declare that the regulation is not to apply to technology transfer agreements containing specific restraints relating to a relevant market where parallel networks of similar technology transfer agreements cover more than 50% of that market . 

According to the new guidelines, certain clauses in licence agreements in the context of settlement agreements may be anticompetitive . The Commission restates moreover that technology pools (patent pools), including the licensing out from them cannot, as multiparty agreements, benefit from an automatic exemption under the regulation. Patent pools must fulfill six conditions in order for their implementation and operation to be lawful . Lastly, the guidelines  provide that non-challenge clauses and termination clauses in a technology transfer agreement between the pool and third parties are likely to fall within Article 101(1) of the Treaty (point 272).

Commission Regulation (EU) No 316/2014 of 21 March 2014 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements, OJEU L 93, 28.03.2014.

Commission Regulation No 772/2004 of 7 April 2004 on the application of Article 101(3) of the Treaty to categories of technology transfer agreements.

Regulation No 316/2014, Article 4(1)(a) and (b). Paragraph (c) provides a list of exceptions, in particular: i)	 the obligation on the licensor and/or the licensee, in a non-reciprocal agreement, not to produce with the licensed technology rights within the exclusive territory reserved for the other party and/or not to sell actively and/or passively into the exclusive territory or to the exclusive customer group reserved for the other party, ii) 	the restriction, in a non-reciprocal agreement, of active sales by the licensee into the exclusive territory or to the exclusive customer group allocated by the licensor to another licensee provided the latter was not a competing undertaking of the licensor at the time of the conclusion of its own licence, iii) 	the obligation on the licensee to produce the contract products only for its own use provided that the licensee is not restricted in selling the contract products actively and passively as spare  parts for its own products, and iv) 	the obligation on the licensee, in a non-reciprocal agreement, to produce the contract products only for a particular customer, where the licence was granted in order to create an alternative source of supply for that customer.

Regulation No 316/2014, Article 4(1)(a) and (b), a list of exceptions is drawn up following the article, in particular: i) for a territory or customer group reserved for the licensor, (ii)	 the obligation to produce the contract products only for its own use provided that the licensee is not restricted in selling the contract products actively and passively as spare parts for its own products, (iii)	the obligation to produce the contract products only for a particular customer, where the licence was granted in order to create an alternative source of supply for that customer;(iv)	the restriction of sales to end-users by a licensee operating at the wholesale level of trade; (v) 	the restriction of sales to unauthorized distributors by the members of a selective distribution system.

Regulation No 316/2014, Article 4(2) (c).

Regulation No 316/2014, Article 5; see also Commission Notice 2014/C 89/03 of 28 March 2004, at pt 128.

Regulation No 316/2004, Article 5(1) (a).

Regulation No 316/2014, Article 5(1) (b).

Article 2 states, "Pursuant to Article 101(3) of the Treaty and subject to the provisions of this Regulation, Article 101(1) of the Treaty shall not apply to technology transfer agreements".

Regulation No 316/2014, Article 5(2); see also Commission Notice 2014/C 89/03 of 28 March 2014, at pt 114.

Regulation No 316/2014, Article 6(1)(a): access of third parties' technologies to the market is restricted, for instance by the cumulative effect of parallel networks of similar restrictive agreements prohibiting licensees from using third parties' technologies; Article 6(1)(b): access of potential licensees to the market is restricted, for instance by the cumulative effect of parallel networks of similar restrictive agreements prohibiting licensors from licensing to other licensees.

Regulation No 316/2014, Article 6(1)(c); see also Guidelines of 28 March 2014, pts 120 - 123.

Regulation No 316/2014, Article 7(1); see also Guidelines, pts 123 - 129.

This is the case for: settlement agreements between competitors which include a licensing of the technology rights concerned by the underlying dispute, but lead to a delayed or otherwise limited ability for the licensee to launch the product on any of the markets concerned, against remuneration (pay-for-restriction) (Guidelines, pt. 238 et seq.); settlement agreements whereby the parties cross license each other and impose restrictions on the use of their technologies (pt. 240); non-challenge clauses in settlement agreements where the containing obligations for the licensee not to challenge the validity of the licensor's intellectual property, with financial incentives or otherwise (pt. 242).

Commission Notice No 20014/C 89-03 of 28 March 2014, Guidelines on the application of Article 011 of the Treaty [now 101(3) TFEU] to technology transfer agreements.

Commission Notice No 2014/C 89/03 of 28 March 2014, pt 17.

Such as assignment or purchase agreements in which the assignor still bears the risk associated with the exploitation, or sub-license agreements, that have the same effects as the license agreements, or agreements relating to titles assimilated to patent, like patent applications, utility models and applications for utility demands, topographies of semiconductor products, utility certificates and addition certificates, supplementary protection certificates for medicinal products or other products covered, plant breeder's certificates. See, for a license on plant variety rights, Commission Decision No 1999/6/EC of 14 December 1998, Sicasov, LawLex200500004747JBJ.

These are the provisions contained in the pure or mixed agreement that relates to licenses of other intellectual property rights: trade mark, copyright, designs. The additional license must contribute to the achievement of the licensed technology object and only contain ancillary clauses.

European Competition Law

164. Technology transfer agreements

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164. Technology transfer agreements

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Les décisions de justice citées dans ce paragraphe :

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