In the framework of the European Union common market, technology transfer agreements are generally considered as constituting a tool in improving economic efficiency by facilitating the diffusion of technology, incentivizing research and development (‘R&D’), promoting incremental innovation and generating competition in product markets.
Such agreements are usually not seen as a restriction of competition, i.e. they fall outside the scope of Article 101(1) of the Treaty on the Functioning of the European Union, or, where they fall within Article 101(1), they create objective efficiencies that are passed on to consumers and meet all of the four cumulative conditions of Article 101(3), of the Treaty.
Nevertheless, certain categories of technology transfer agreements, or certain clauses in such agreements, may also have negative effects on competition, since they may restrict the ability of competitors to enter or expand in the market, or harm inter- or intra-technology competition, for example by reducing the incentives to innovate.
Therefore the Commission, more or less each ten years, issues a Regulation aimed at assessing the compatibility of the clauses contained in technology transfer agreements with the competition rules contained in the Treaty. The draft for a Regulation, that updates the current Technology Transfer Block Exemption Regulation, published on September 16, 2025, contains the following points, which deserve to be highlighted.
- Data licensing: the draft introduces this type of agreements, which mirror the growing importance of data and of their circulation in the European Union market.
- IP dispute and “pay-for-delay” type settlement agreements: in the framework of the favorable treatment of settlement agreements in the context of competition law, pay-for-delay agreements are settlements in which a brand-name pharmaceutical company pays a generic drug company to delay its entry into the market, typically after a patent dispute.
- Soft safe harbor for patent pools: the draft acknowledges the growing importance of patent pools as pivotal players in the technology transfer market, especially in the framework of SEP (standard essential patents) and FRAND (fair, reasonable and non-discriminatory) licenses.
- Licensing Negotiation Groups “LNGs”: this is a new notion, which was missing in the previous Regulation; LNGs, in which multiple licensees negotiate with technology rights holder are a new phenomenon of which up until today only a few cases are known.
- Research Organizations: the proposed draft is crucial for public and private research organizations (PROs), such as universities and research institutes and startups/spin-offs that license technology. These entities often operate differently from big companies; PROs generally focus on R&D and licensing of early stage technologies rather than product manufacturing.
Article by VENTURELLO E BOTTARINI, AVVOCATI (Italy)
