On the same date similar new laws were also introduced in the UK and are set out in the Competition Act 1998 (Technology Transfer Agreements Block Exemption) Order 2026 (TTBEO).
The new regime preserves the competition framework around technology licensing and continues to provide much needed certainty for EU and UK businesses who are regularly involved in the licensing of patents, know-how, software and related intellectual property rights.
To promote innovation, intellectual property law generally permits exclusivity and the exploitation of monopoly rights. For example, patent owners or copyright holders have always had the right to control access to and use of their IPRs as well as pursue others for unauthorised use or infringement. However, there has always been an underlying tension between intellectual property laws and competition law which prohibits anti-competitive agreements and abuse of market power. In this context the competition authorities have always sought to strike a balance when it comes to technology transfer arrangements, recognising that they are generally pro-competitive, encourage innovation and benefit the consumer.
As a result, the competition authorities have granted a “block” or “automatic” exemption for technology transfer agreements. In practice this means that if the agreement meets certain conditions, does not contain any so-called “black-listed” clauses, then it will be automatically exempt from competition law. The significance of this is that IPR holders then do not have to worry about whether they will be able to enforce any restrictions in the agreement against the other party at a later date if they fall out.
Typical restrictions which the parties may want to rely on include exclusivity, non-compete undertakings, restrictions on the scope or “field” of use of the licensed technology, no-challenge clauses, minimum royalty payments, minimum sales targets or the grant back of improvements made by the other party during the period of the agreement.
The new EU and UK exemptions come with very helpful comprehensive guidance from both the EU Commission and the Competition and Markets Authority in the UK. The exemption will continue to apply to licensing arrangements for patents, know-how and software and for any ancillary provisions relating to copyright and trade marks. The exemption continues to be subject to the safe-harbour regime, namely that exemption is only automatic provided the market share of the parties does not exceed 20% where they are competitors and 30% where they are non-competitors.
An agreement which meets these conditions will be automatically exempt as long as it does not contain any “black-listed” or “hardcore” restrictions such as price fixing, output limitations or market sharing.
A transitional period for compliance is given until 30 April 2027.
The basic approach remains the same. Block or automatic exemption is given provided certain conditions are met.
Rather than an overhaul, the authorities have made selected adjustments either to clarify previous areas of uncertainty, or to address new developments in technology transfer. For example, recognition is given to recent developments in the regulation of data analytics and digital platforms.
To give some context, the EU Commission’s new guidance now includes directions on how data licensing arrangements should be assessed. Data licensing includes licensing of databases protected by copyright and/or databases rights and know-how.
There has also been further guidance on how to apply the market share thresholds for the parties to benefit from the safe harbour. The authorities recognise that there have been challenges around interpretation of the market share thresholds and when they apply. The EU Commission has given some more clarity here.
Colin Miller is a legal director at BTO specialising in competition law and intellectual property.
© 2026 BTO Solicitors LLP | V.A.T. No: 260371482 | All rights reserved.
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