Technology Transfer Block Exemption (TTBER)
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Summary
Commission Regulation (EU) No 316/2014 (the Technology Transfer Block Exemption Regulation, TTBER) sets out when certain technology transfer agreements are exempted from the EU competition law prohibition in Article 101(1) TFEU, provided specified conditions are met. It is accompanied by Guidelines that explain the assessment of technology transfer agreements under Article 101 TFEU. The Regulation defines safe-harbour conditions, including market-share thresholds and lists of “hardcore” and “excluded” restrictions that can remove or limit the benefit of the exemption.
Who is affected?
It affects companies and other entities that license or assign technology rights (e.g., patents, know-how, software copyright) and enter into technology transfer agreements, including competitors and non-competitors. Competition law and IP/legal teams advising on licensing, R&D and commercialization agreements are directly impacted.
Scope
Applies to bilateral technology transfer agreements for the production of contract products using licensed technology, setting conditions under which such agreements benefit from a block exemption under Article 101 TFEU.
Key Points
- Provides a block exemption (safe harbour) for certain technology transfer agreements that meet the Regulation’s conditions.
- Sets market-share thresholds (generally 20% for agreements between competitors and 30% for agreements between non-competitors) as a key condition for the exemption.
- Identifies “hardcore restrictions” (e.g., certain price-fixing, output limitations, market/customer allocation) that remove the benefit of the block exemption for the agreement.
- Lists “excluded restrictions” (certain clauses that are not covered by the exemption even if the rest of the agreement may be), requiring individual assessment under Article 101 TFEU.
- Clarifies treatment of exclusive licensing, grant-backs, non-compete obligations and restrictions on passive/active sales in the technology licensing context.
Key Deadlines
- — Expiry of Commission Regulation (EU) No 316/2014 (TTBER) (as adopted; later extended/replaced by subsequent legislation).
Related Regulations
Frequently Asked Questions
Who must comply with the Technology Transfer Block Exemption Regulation (TTBER)?
Companies and other entities that license or assign technology rights, such as patents, know-how, or software copyright, and enter into technology transfer agreements must comply with TTBER. This includes both competitors and non-competitors involved in such agreements.
What types of agreements fall within the scope of TTBER?
TTBER applies to bilateral technology transfer agreements for the production of contract products using licensed technology. It covers agreements between two parties, whether they are competitors or non-competitors, provided the agreements meet certain conditions.
What are the key obligations under TTBER for parties to a technology transfer agreement?
Parties must ensure their agreements do not contain 'hardcore restrictions' and that their market shares do not exceed the specified thresholds. They must also individually assess any 'excluded restrictions' that are present in the agreement.
What are the market-share thresholds under TTBER?
The market-share threshold is 20% for agreements between competitors and 30% for agreements between non-competitors. Exceeding these thresholds means the agreement does not benefit from the block exemption and must be individually assessed under Article 101 TFEU.
What are 'hardcore restrictions' and why are they important under TTBER?
'Hardcore restrictions' are specific types of anti-competitive clauses, such as price-fixing, output limitations, or market/customer allocation, that automatically remove the benefit of the block exemption if included in an agreement. Their presence means the agreement is not covered by TTBER.
What are 'excluded restrictions' under TTBER?
'Excluded restrictions' are clauses that are not covered by the block exemption, even if the rest of the agreement qualifies. These clauses must be individually assessed under Article 101 TFEU to determine their compatibility with EU competition law.
What are the penalties for non-compliance with TTBER?
If an agreement does not comply with TTBER and infringes Article 101(1) TFEU, the parties risk fines, the agreement being declared void, and potential damages claims. The European Commission or national competition authorities may enforce these penalties.
How does TTBER interact with other EU competition regulations?
TTBER provides a specific safe harbour within the broader framework of Article 101 TFEU. If an agreement falls outside TTBER, it must be assessed individually under Article 101 and may be subject to other block exemption regulations or competition law provisions.
What practical steps should companies take to ensure compliance with TTBER?
Companies should review their technology transfer agreements to ensure they do not contain hardcore restrictions, check that market-share thresholds are not exceeded, and assess any excluded restrictions individually. Legal and competition teams should also consult the accompanying Guidelines for detailed compliance advice.
Are exclusive licensing and non-compete obligations permitted under TTBER?
Exclusive licensing and non-compete obligations are permitted under TTBER, provided they do not amount to hardcore restrictions and the agreement otherwise meets the Regulation's conditions. Specific rules apply to these clauses, so careful assessment is required.
Key Terms
- Technology Transfer Agreement
- A contract in which one party (the licensor) allows another party (the licensee) to use certain technology rights, such as patents or know-how, for the production of goods or services.
- Block Exemption
- A legal provision that automatically exempts certain agreements from the prohibition of anti-competitive practices under Article 101(1) TFEU, provided specific conditions are met.
- Safe Harbour
- A set of conditions under which parties to an agreement are presumed to comply with competition law, shielding them from enforcement action if these conditions are satisfied.
- Hardcore Restrictions
- Clauses in technology transfer agreements that are considered so anti-competitive (e.g., price-fixing, market allocation) that their inclusion removes the benefit of the block exemption.
- Excluded Restrictions
- Specific clauses that are not covered by the block exemption and must be individually assessed under Article 101 TFEU, even if the rest of the agreement is exempt.
- Market-Share Threshold
- The maximum combined market share (20% for competitors, 30% for non-competitors) that parties to a technology transfer agreement can have for the agreement to benefit from the block exemption.
- Article 101 TFEU
- A provision of the Treaty on the Functioning of the European Union that prohibits agreements which restrict competition within the EU's internal market.
- Exclusive Licensing
- A licensing arrangement where the licensor grants rights to use the technology exclusively to one licensee, often restricting the licensor from licensing others or using the technology themselves.
- Grant-Back Obligation
- A clause requiring the licensee to grant the licensor rights to improvements or new applications developed using the licensed technology.
- Passive Sales
- Sales made in response to unsolicited requests from individual customers, as opposed to active sales, which involve actively targeting customers in specific territories or customer groups.