New European Technology Transfer Regulations

New regulations expected to take effect May 1, 2004 under European Union competition laws may complicate technology licensing in Europe. The European Technology Transfer Block Exemption Regulation (TTBER) provides a blanket exemption from EU competition law for patent, know-how and software copyright licenses that meet certain specified criteria. However, changes in the Regulations may make it more difficult to know in advance which license terms will be permitted. Under the TTBER in effect since 1996, there was a "white list" of permitted license terms, as well as a "black list" of prohibited terms. The new TTBER has eliminated the white list. Although the old list was criticized for being too restrictive, European businesses and their lawyers could at least take some comfort in knowing that certain licensing practices were clearly permitted. Increased uncertainty is now predicted, particularly since the new rules will be subject to interpretation by national courts and competition authorities in each of the member countries. The new Regulations also impose strict market-share rules. Competitors cannot take advantage of the block exemption if their combined market share is more than 20%. For non-competitors, the threshold is 30%. Many of those who commented on draft regulations published last year said there is uncertainty over how the relevant "market" will be defined for a particular technology license. Authorities in the member countries may interpret the rules differently. The new regulations and accompanying guidelines are available on the EU web site at: http://makeashorterlink.com/?K33342208. Summary by: Michael Erdle For more information and assistance with technology licensing in Europe, contact Michael Erdle (merdle@dww.com)