Saturday, 26 April 2014

Licensing as a Solo Occupation

While acting for small start up businesses it can be tempting to believe that the grown up law from the European Commission designed to control cartels and patent pools operated by telecoms company has nothing to do with us. It does. I refer to the revised Technology Transfer Block Exemption and Guidelines Regulation 316/2014 fondly known as the TTBER.

The law applies to settlement agreements as well as more obvious technology transfer licences. But there does have to be some technology transfer involved so pure trade mark settlements gain nothing from this exemption though design deals do.

When: These rules come into effect on 1 May 2014 but from next May they also apply to all your old agreements too.

Who: Life gets harsh when you have more than 20 or 30% of the relevant market between you depending on whether the parties compete or not.

Why: The TTBER is and always was supposed to "promote consumer welfare and an efficient allocation of resources" The evil the Commission have always perceived above any other is the prevention, restriction or distortion of competition. While the UK government is looking for growth and investment, Europe remains committed to its barriers which can only be overcome by justifying that the terms of your agreement are indispensable for promoting technical and economic progress while allowing consumer's a fair share. Nevertheless the Commission has noticed the changing environment and the disaster of standards essential patents and the litigation they create. So mostly this is updating.

What has changed: The point that struck me was that termination for challenge clauses in non-exclusive licenses are no longer automatically OK (you can still terminate if its an exclusive licence).
Settlement agreements get a lot of attention. The Commission is concerned that we will conspire to keep invalid patents in existence or be prepared to pay for delay.

For more guidance I suggest you coat tail on the emissions of the larger law firms.  The note that Meissner Bolte produced is here. Bird & Bird have a brief note here   and no doubt we will be seeing more calls to arms from those lawyers eager to do audits of old deals for your clients.

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