Technology transfer block exemption regulation

The technology transfer block exemption regulation removes from the prohibition of anticompetitive agreements in Article 101(1) TFEU the technology licences that meet its conditions. Regulation (EU) No 316/2014, accompanied by Commission guidelines, covers agreements between two undertakings concerning patents, know-how, software copyright or designs, for the production of goods or services. It expired on 30 April 2026, and the Commission has prepared a new regulation to replace it.

Market share thresholds

The exemption is subject to thresholds. Where the parties are competitors, their combined market share must not exceed 20% on the relevant technology and product markets. Where they are not, the share of each must not exceed 30%. Above these thresholds, the agreement is not presumed unlawful, but it must be assessed individually under Article 101(3) TFEU, in the light of the guidelines.

Hardcore restrictions and excluded restrictions

Certain clauses deprive the entire agreement of the benefit of the exemption. Depending on whether or not the parties are competitors, these are price fixing, limitation of output, allocation of markets or customers, subject to defined exceptions, and restriction of the licensee’s ability to exploit its own technology. Other clauses are merely excluded from the exemption and are assessed in isolation, in particular the obligation to grant back severable improvements exclusively, reflected in the improvement clause, and the no-challenge clause outside exclusive licences, for which a termination right is permitted.

Scope and limits of the regime

The Regulation does not cover licences forming part of research and development or specialisation agreements, which fall under other block exemption regulations, nor the creation of patent pools, which the guidelines address separately. It applies only to bilateral agreements, multiparty licences being subject to an individual assessment that applies the principles of the guidelines by analogy. It thus provides the reference framework for any technology transfer agreement, including outside the safe harbour.

Key points

The block exemption regulation offers a safe harbour to technology licences concluded between two undertakings whose market shares remain below the thresholds. Hardcore restrictions remove the exemption for the entire agreement, whereas excluded restrictions affect only the clause concerned. Since the expiry of Regulation No 316/2014 on 30 April 2026, the applicable replacement text and any transitional provisions should be checked before drafting or renegotiating a licence. Market shares must be assessed at conclusion and monitored during performance.

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This glossary entry is general in scope and does not constitute legal advice.

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