WilmerHale Comments on the European Commission’s Review of its Technology Transfer Block Exemption and Guidelines Under EU Competition Law

WilmerHale Comments on the European Commission’s Review of its Technology Transfer Block Exemption and Guidelines Under EU Competition Law

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On 3 February 2012, WilmerHale submitted comments in response to DG Competition’s consultation on the EU’s rules on the compatibility of technology transfer agreements with Article 101 TFEU. The full text of our comments is available here.

In brief, we have commented that the EU Block Exemption and Guidelines are complex, but useful instruments for assessing the competitive impact of technology transfer agreements.
Our main recommendations for improvements are as follows:

  • Sometimes it is difficult to determine which of the EU Technology Transfer or R&D Block Exemptions is applicable. It would be useful if the Commission would clarify this further.
  • The EU Technology Transfer Block Exemption’s use of market share thresholds can cause problems. The European Commission might consider raising the market share threshold for agreements between non-competitors to 40%, or even abolishing this market share threshold.
  • The Technology Transfer Guidelines’ section on patent pools could also be clarified. In particular, it may be argued that there is an overly cautious opposition to including non-essential technologies in pools, which is not justified. Under certain circumstances, it can be reasonable and efficiency enhancing to include non-essential, and sometimes even substitute technologies, in a pool. The current approach is premised on (a) it being easy to distinguish complementary and substitute technologies; and (b) the belief that excluding non-essential or substitute technologies will always lead to lower royalties. This appears incorrect.
  • We do not think that the current rules on cross-licensing or grant-back clauses (on which the Commission has released a study for comment) need revision.

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