Appendix B Technology Transfer Block Exemption

• Pages: 209-226

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APPENDIX B

TECHNOLOGY TRANSFER BLOCK EXEMPTION

Commission Regulation (EC) No 772/2004

of 27 April 2004

on the application of Article 81(3) of the Treaty to categories of

technology transfer agreements

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation No 19/65/EEC of 2 March 1965

on application of Article 85(3) of the Treaty to certain categories of

agreements and concerted practices(1), and in particular Article 1

thereof,

Having published a draft of this Regulation(2),

After consulting the Advisory Committee on Restrictive Practices

and Dominant Positions,

Whereas:

(1) Regulation No 19/65/EEC empowers the Commission to apply

Article 81(3) of the Treaty by Regulat ion to certain categories of

technology transfer agreements and corresponding concerted

practices to which only two undertakings are party which fall within

Article 81(1).

(2) Pursuant to Regulation No 19/65/EEC, the Commission has, in

particular, adopted Regulation (EC) No 240/96 of 31 January 19 96

on the application of Article 85(3) of the Treaty to certain categories

of technology transfer agreements(3).

210 Intellectual Property Guidelines Origins and Ap plications

(3) On 20 December 2001 the Commission published an evaluation

report on the transfer of technology block exemption Regulation (EC)

No 240/96(4). This generated a public debate on t he application of

Regulation (EC) No 240/96 and on the application in general of

Article 81(1) and (3) of the Treaty to technology transfer agreements.

The response to the evaluation report from Member States and third

parties has been generally in favour of reform of Community

competition policy on technology transfer agreements. It is therefore

appropriate to repeal Regulation (EC) No 240/96.

(4) This Regulation should meet the two requirements of ensuring

effective competition and providing adequate legal security for

undertakings. The pursuit of these objectives should take account of

the need to simplify the regulatory framework and its application. It

is appropriate to move away from the approach of listing exempted

clauses and to place greater emphasis on defining the categories of

agreements which are exempted up to a certain level of market power

and on specifying the restrictions or clauses which are not to be

contained in such agreements. This is consistent with an economics-

based approach which assesses the impact of agreements on the

relevant market. It is also consistent with such an approach to make a

distinction between agreements between competitors and agreements

between non-competitors.

(5) Technology transfer agreements concern the licensing of

technology. Such agreements will usually improve economic

efficiency and be pro-competitive as they can reduce duplication of

research and development, strengthen the incentive for the initial

research and development, spur incremental i nnovation, facilitate

diffusion and generate product market competition.

(6) T he likelihood that suc h efficiency-enhancing and pro-

competitive effects will outweigh any anti-competitive effects due to

restrictions contained in technology transfer agreements depends on

the degree of market power of the undertakings concerned and,

therefore, on the extent to which those undertakings face competition

from undertakings owning substitute technologies or undertakings

producing substitute products.