The European Antitrust Review 2015 Section 4: Country chapters

Germany: IP and Antitrust

Licence Agreements Under Scrutiny: A New Challenge for Non-Challenge Clauses

Licence agreements – in principle pro-competitive

In general, intellectual property licence agreements are deemed pro-competitive.1 Licensing leads to the dissemination of technology and can lead to follow-on innovation.2 Furthermore, if third-party technology can be licensed, research and development expenditures can be used more efficiently (since duplication of R&D efforts and expenditures can be reduced).3 Finally, commercialising goods via licensing is one of the key privileges of any intellectual property right since it is the very essence of an exclusive right,4 such as patents and copyrights, to permit the use of that property by others in exchange for consideration. As is also true for other property rights, however, the exercise of this exclusive right is not immune from scrutiny under competition law.5

Recently, a growing number of provisions typically found in licence agreements have attracted the special attention of the European Commission, in particular provisions prohibiting the licensee from challenging the validity of the licensed intellectual property right (ie, non-challenge clauses).6 From a competition law perspective, the existence (and licensing) of invalid intellectual property rights may have anti-competitive effects to the extent that access to (invalidly) protected technology is unjustly limited. The concern from a competition law perspective is that unjustified monopolisation of a specific technology may result in undue royalty payments, ultimately distorting competition.7

Any serious competitive analysis has to acknowledge the uncertainties that negotiation parties encounter with regard to the validity of intellectual property rights. In fact, parties will typically only know after litigation that an intellectual property right is considered valid by the courts. Prior to litigation, parties will only be able to make probability assessments in this regard. These probability assessments may change in the course of negotiations or even litigation, depending on the quality of prior art evidence the counterparty relies on.

The new Technology Transfer Block Exemption Regulation and its effects on licence agreements

General scheme

In its revised set of rules governing the licensing of certain technology – the Technology Transfer Block Exemption Regulation (TTBER)8 – the European Commission promulgates a strict stance against the inclusion of provisions that restrict a licensee’s ability to challenge the validity of the licensed intellectual property. The revised TTBER, replacing the earlier 2004 TTBER,9 was adopted on 21 March 2014, entered into force on 1 May 2014 and expires on 30 April 2026. As was the case with its 2004 predecessor, the 2014 TTBER provides a framework for assessing whether certain technology licensing agreements, according to pre-determined criteria, are exempted from the prohibition contained in article 101 – the provision dealing with anti-competitive agreements – of the Treaty on the Functioning of the European Union (TFEU).

Safe harbour

In line with its 2004 predecessor, the TTBER offers a ‘safe harbour’ by exempting certain licence agreements from the application of article 101(1) TFEU.10 According to the Commission, the establishment of the principle of legal exemption is a positive development as such a system increases legal certainty and clarity and provides greater protection for competition.11 The safe harbour (also called a block exemption) gives parties to a licence agreement the security of being (relatively) certain that they will not be faced with allegations of anti-competitive conduct

The rationale of block exempting licence agreements is based on the assumption that, to the extent that they fall within the scope of article 101(1) TFEU, such agreements fulfil the four conditions laid down in article 101(3) TFEU. It is thus presumed that:

  • the agreements give rise to economic efficiencies;
  • the restrictions contained in the agreements are indispensable to the attainment of these efficiencies;
  • consumers within the affected markets receive a fair share of the efficiency gains; and
  • the agreements do not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question.12

In other words, the conditions laid down by the TTBER constituting safe harbour are, in legal terms, the legally binding criteria for an exemption pursuant to article 101(3) TFEU.

To fall within the safe harbour and thus be exempted from application of article 101(1) TFEU, the licence agreement has to fulfil, cumulatively, three key requirements:

  • the applicable market share thresholds are not exceeded;13
  • the licence agreement does not include any hard-core restrictions;14 and
  • the licence agreement does not include any excluded restrictions.15

The market share thresholds (article 3 TTBER), hard-core restrictions (article 4 TTBER) and excluded restrictions (article 5 TTBER) set out in the TTBER aim to ensure that only restrictive agreements that can reasonably be presumed to fulfil the four conditions of article 101(3) TFEU are block exempted.

Whether the licence agreement meets the conditions laid down in the TTBER has to be evaluated and assessed by the undertakings entering into the licence agreement on their own risk.

In the event that the requirements of the block exemption are not fulfiled (and thus the licence agreement falls outside the safe harbour of the TTBER), the licence agreement may nevertheless benefit from an individual exemption pursuant to article 101(3) TFEU. In this context, the European Commission states, that there is ‘no presumption of illegality of agreements that fall outside the scope of the block exemption provided that they do not contain hard-core restrictions of competition’.16

Scope

The TTBER applies to agreements entered into between two undertakings that concern the transfer of technology rights17 for the purpose of the production of contract products, and that contain restrictions of competition within the scope of article 101(1) TFEU.18 The exemption provided for by the TTBER also applies to provisions in licence agreements that relate to the purchase of products by the licensee or that relate to the licensing or assignment of other intellectual property rights or know-how to the licensee if, and to the extent that, those provisions are directly related to the production or sale of the contract products.19

Thus the framework of the TTBER is based on the premise that there is a direct link between the transfer of technology rights and the production of ‘contract products’ implementing or using the licensed technology rights.20 This is typically the case where the purpose of the licence agreement is to enable the licensee, with or without further input, to produce the contract products or services. The TTBER also applies to so-called non-assertion agreements and settlement agreements, as these agreements also put the licensee in a position to produce the contract products.21

However, technology transfer agreements are to be distinguished from specialisation agreements under which two or more parties agree to produce certain products jointly,22 as well as from research and development agreements under which two or more parties agree to carry out joint research and development or to jointly exploit the results thereof.23 Newly inserted article 9 of the 2014 TTBER clarifies that the TTBER is not applicable to licensing in the context of specialisation or of research and development agreements, implementing a general subsidiarity of the TTBER to these other block exemption regulations.24

Furthermore the TTBER does not apply to licence agreements that fall within the scope of the Commission’s de minimis notice.25 The de minimis notice is applicable to agreements between undertakings where the combined market share of the contracting parties on any relevant market does not exceed 10 per cent (horizontal agreements between competitors) and where the individual market share of each party on any relevant market does not exceed 15 per cent (vertical agreements between non-competitors). Within the scope of the de minimis notice, it is irrefutably presumed that competition restrictions are not appreciable within the meaning of article 101(1) TFEU, and thus the agreement falls outside the scope of article 101(1) TFEU.

Market share thresholds

Article 3 TTBER provides that the block exemption is only applicable as long as certain market share thresholds (specified in article 3(1) and (2) TTBER) are not exceeded. Below these market share thresholds, licence agreements, though perhaps restrictive of competition, are presumed to generally lead to an improvement in production or distribution and allow consumers a fair share of the resulting benefits.26

The market share threshold to be applied for the purpose of the safe harbour of the TTBER depends on whether the agreement is concluded between competitors or non-competitors.27

For licence agreements between competitors (ie, horizontal agreements), the safe harbour applies as long as the combined market share of the contracting parties does not exceed 20 per cent on any relevant market (article 3(1) TTBER).28

If the parties to the agreement are non-competitors (ie, a vertical agreement), the licence agreement falls within the safe harbour if the market share of each party does not exceed 30 per cent on the affected relevant technology and product markets (article 3(2) TTBER).29

Market definition and the assessment or calculation of market share on the relevant markets is set out in article 8 TTBER and in the TTBER Guidelines.30

In the event that the relevant market share thresholds are exceeded and the licence agreement thus falls outside the block exemption, there is neither a presumption of illegality nor, in particular, a presumption that article 101(1) TFEU applies merely because the market share thresholds are exceeded.31

Hard-core restrictions

Regardless of the market share of the contracting parties, not all licence agreements benefit from the safe harbour offered by the TTBER: what matters is the content of the licence agreement. The Commission has identified certain provisions – ‘hard-core restrictions’ (exhaustively enumerated in article 4 TTBER) – that it deems so clearly and fundamentally anti-competitive that, should they be included in the agreement, the entire agreement could lose the benefit of the safe harbour created by the block exemption.32 The rationale behind the listed hard-core restrictions is based on the presumption that agreements with such provisions principally will not fulfil the four conditions laid down in article 101(3) TFEU. Consequently, parties to such an agreement may be faced with allegations of anti-competitive conduct. However, such a finding would require a thorough analysis of the requirements established by article 101 TFEU. In other words, the mere presence of a ‘ard-core restriction does not necessarily give rise to anti-competitive allegations.33

As licence agreements between competing undertakings are more likely to have anti-competitive effects than licence agreements between non-competing undertakings, the TTBER (as in the earlier 2004 version) distinguishes between licence agreements between competitors (article 4(1) TTBER) and licence agreements between non-competitors (article 4(2) TTBER), applying stricter standards to licence agreements between competitors. Furthermore, with regard to licence agreements between competitors only, the TTBER also distinguishes between reciprocal and non-reciprocal agreements.34

Typical hard-core restrictions between competitors include, among others:

  • price fixing (article 4(1)(a) TTBER);35
  • output restrictions (article 4(1)(b) TTBER);36
  • division of markets or customers (article 4(1)(c) TTBER);37 and
  • restrictions on the exploitation of the technology or on research and development (article 4(1)(d) TTBER).38

Typical hard-core restrictions between non-competitors include, among others:

  • price fixing, except for maximum prices (article 4(2)(a) TTBER);
  • territorial or customer related passive sales restrictions (article 4(2)(b) TTBER); and
  • active or passive sales restrictions to end-users in case of selective distribution system39 (article 4(2)(c) TTBER).

However, despite the deemed anti-competitive effects of hard-core restrictions, there are various counter-exceptions to some of these restrictions. Again, granting these counter-exceptions is, systematically, a legally binding specification, and implementation of the general exemption prerequisites is laid down in article 101(3) TFEU.

If the licence agreement contains a hard-core restriction, it falls entirely outside the safe harbour of the TTBER and thus principally within the scope of article 101(1) TFEU, since for the purposes of applying the TTBER, hard-core restrictions cannot be separated off from the rest of the licence agreement.40 Furthermore, the Commission is of the view that, on an individual assessment, it is unlikely that hard-core restrictions will fulfil the four conditions for an exemption pursuant to article 101(3) TFEU.41 As a consequence, the restrictions in question are likely to be prohibited, void and thus not enforceable (cf article 101(2) TFEU).42 However, the Commission notes that, in exceptional cases, hard-core restrictions may be ‘objectively necessary’ for an agreement of a particular nature or type and therefore fall outside article 101(1) TFEU.43 Additionally, the Commission points out, that undertakings can always plead an efficiency defence under article 101(3) TFEU in an individual case.44

Excluded provisions

Similarly, some provisions, while not hard-core restrictions, are nonetheless not presumed to be pro-competitive, with the effect that the safe harbour will not apply to these specific provisions – so-called excluded provisions (exhaustively enumerated in article 5 TTBER).45 The rest of the agreement, however, may still benefit from the exemption provided the restriction in question can be severed from the rest of the agreement.46 In consequence, these provisions (but not the entire agreement) require an individual assessment of their pro and anti-competitive effects pursuant to articles 101(1) and 101(3) TFEU.47 Such excluded provisions encompass exclusive ‘grant-backs’ (article 5(1)(a) TTBER).48 The purpose of prohibiting exclusive grant-back obligations (imposed on the licensee) from the safe harbour of the TTBER is to ensure sufficient incentives for follow-on inventions and innovation in general.49 Conversely, this means that the TTBER does apply to non-exclusive grant back obligations.50 Moreover, provisions imposing any direct or indirect obligation on the licensee not to challenge the validity of the licensor’s intellectual property rights also constitute an excluded provision (article 5(1)(b) TTBER).51 Finally, in case of licence agreements between non-competing parties, restrictions on the exploitation of the technology or on research and development are also specified as an excluded provision (article 5(2) TTBER).52

Impact of the TTBER on ‘non-challenge clauses’ and ‘right to terminate provisions’

Non-challenge clauses

This somewhat complicated technique of exempting specific kinds of agreements from the scope of article 101 TFEU is nothing new. In line with its 2004 predecessor, the revised TTBER excludes non-challenge clauses from the safe harbour (article 5(1)(b) TTBER). Pursuant to a non-challenge clause, a licensee is prohibited from challenging the validity of the licensed intellectual property (eg, by filing a nullity complaint). The practical purpose of such provisions is to gain ‘patent peace’ between the parties. The parties agree to consider the licensed intellectual property as (bilaterally) valid, thus gaining certainty both with regard to the mutual obligations and that no litigation will be initiated by either party to question the essence of the agreement (ie, the legal existence and validity of the licensed intellectual property rights).

However, pursuant to article 5(1)(b) TTBER, such non-challenge clauses do not benefit from the safe harbour established by the TTBER. The underlying rationale, as described in the Commission’s revised TTBER Guidelines (paragraph 123), is a stipulated public interest in eliminating invalid intellectual property rights:53 ‘Invalid intellectual property stifles innovation rather than promoting it.’54 Since the licensees would in many cases be best placed to determine the validity of the intellectual property right, they should not be excluded from bringing validity challenges before the competent courts.55 Consequently, the Commission considers (costly) litigation between private entities that could result in the elimination of a potentially invalid intellectual property right to be beneficial to the market in general, even if the intellectual property right had been awarded by a public authority in the first place (such as patents or registered design rights). This is close to being at odds with the presumption that patents are valid because of the thorough analysis conducted by the relevant patent office during prosecution.

Right to terminate provisions

Going even further, the revised TTBER excludes provisions from the scope of its safe harbour that stipulate a right to terminate a non-exclusive licence agreement if the licensee challenges the validity of the licensed intellectual property (article 5(1)(b) TTBER). In its original draft for the revised TTBER from February 2013,56 the Commission planned to exclude provisions allowing termination for validity challenges from the safe harbour independently of whether such provisions were incorporated in exclusive or non-exclusive licence agreements. Hence, the Commission has at least partially taken account of the stakeholders’ criticism in the course of the public consultation. However, considering that such termination clauses were expressly covered by the safe harbour set up by the 2004 TTBER,57 the exclusion of termination-for-challenge clauses in respect of non-exclusive licence agreements from the safe harbour of the TTBER still constitutes a significant change in the regulatory framework of the TTBER, as well a substantial shift in the balance between the licensee and the licensor, at the expense of the licensor.

Again, it is the stipulated public interest in using the licensee as a ‘litigation vehicle’ to challenge potentially invalid intellectual property rights that is put forward as justification.58 According to the Commission, termination rights can have the same effect as a non-challenge clause, particularly where the licensee has already incurred significant sunk costs for the production of the contract products or is already producing the contract products.59 Potentially, licensees may be deterred from challenging the validity of the licensed intellectual property as they would risk termination of the licence agreement. However, if the licensees consider their invalidity arguments to be convincing, why should they then fear termination of the licence agreement? Furthermore, even the Commission acknowledges that:

outside the context of these scenarios [ie, the licensing of standard-essential patents and significant sunk costs for licensee] a termination clause will often not provide a significant disincentive to challenge and therefore not produce the same effect as a non-challenge clause.60

Conversely, these considerations do not apply in the case of exclusive licences (article 5(1)(b) TTBER). The Commission finds that in these cases termination clauses are usually less likely on balance to have anti-competitive effects.61 It is much more likely that the licensor will find himself in a situation of dependency if the licensee is the only source of income regarding the licensed technology. This applies in particular when, as is often the case, the royalty rate is dependent on the amount of units produced with the licensed technology by the licensee. In this setting, the general pro-competitive nature of licensing (incentives for innovation and for licensing out) could be thwarted if, for example, the licensor is stuck with an exclusive licensee that no longer makes significant efforts to develop, produce and market the product (to be) produced and challenges the validity of the licensed technology right.62

Competitive analysis of non-challenge clauses

Practical purpose of licence agreements and non-challenge clauses

Any analysis of the competitive effects of non-challenge clauses has to take into account the practical purpose of licence agreements. Licence agreements grant a licensee the right to use a specific technology. Superficially, this grant will only make sense to the extent that the licensor has any rights to grant – that is, the licensed intellectual property is valid. Furthermore, the licensee will only be interested in licensing a patent (for example) if it actually uses the patented technology. Thus, from a superficial perspective, validity and infringement of a licensed patent appear to be the sine qua non of any licence agreement. Although this conclusion may be persuasive from a theoretical point of view, it falls short both of the practical reality and the very nature of licence agreements: parties to a licensing negotiation will hardly ever be certain as to infringement and validity of the respective intellectual property rights. Unlike in a litigation context, the outcome of a negotiation will most probably not be that an intellectual property right is simply infringed and valid or non-infringed and invalid. In the real world, there are many outcomes that lie between the two poles.

The reason for this is simple. When analysing the technical value of a patent at hand, parties to a negotiation predict the outcome of a hypothetical litigation. However, predictions can never be certain – not only against the backdrop of possible value judgments by judges, but also because of prior art that a prospective licensee may have up her sleeve. In fact, any intellectual property right granted by public authorities, particularly patents, are only presumably valid. This entails the possibility of the patent being invalid. The probability judgments regarding validity and invalidity are subject to the dynamics of negotiations and litigation proceedings. For instance, once validity has been confirmed by a neutral third party (ie, a court), the probability is usually perceived as being higher than at the beginning of the negotiations.

Both parties to a negotiation are thus faced with uncertainties as to the outcome of hypothetical litigation proceedings. It is a business decision whether a party wishes to endure these uncertainties. If it does, litigation is the route to go. If it does not, it is a licence agreement that would create certainty. The licensee is certain not to infringe the respective intellectual property right and the licensor is certain to obtain a royalty rate. Needless to say, this is a trade-off for both parties, depending on the respective probabilities of winning in court. Consequently, uncertainties are usually priced into the royalty rate or other consideration that the parties may agree on. Thus, a licence agreement is the result of bargaining with probabilities. The same is true for litigation settlement agreements, where parties to litigation bargain with the respective probabilities of losing or winning the case. In fact, parties bargain with the probability of obtaining a favourable judgment in both licensing and settlement agreements.

Challenging the validity of the licensed intellectual property right after a licence agreement has been concluded throws the trade-off out of balance. The licensee claims both the chances of defeating the licensor in court and the certainty of having a right to use the technology at the same time – a classic case of having one’s cake and eating it too. Consequently, many licence agreements include a termination clause for exactly this reason. If the licensee chooses to litigate (ie, challenge the patent), the licensor should have the mirror opportunity (ie, the right to seek damages exceeding the royalty rate or obtain a cease and desist order). There is hardly anything anti-competitive about such a provision. It is a fair balance of interests that parties might choose to agree upon. It prevents self-contradictory behaviour of the licensee (it is self-contradictory to bargain with probabilities and to challenge the basis of that probability judgment at the same time).

Additionally, it should be noted that the exclusion of termination clauses from the safe harbour of the TTBER may reduce the licensor’s incentives to enter into licence agreements at all, as the right owners want to avoid a situation in which, due to an enforceable licence agreement, they may still be legally obliged to cooperate with licensees (eg, providing training, know-how, services, etc) with whom they are in litigation.63 From this perspective, the exclusion of termination clauses may eventually distort the dissemination and development of technological progress rather than promote innovation.

Comparison with the Commission’s view on settlement agreements

Somewhat surprisingly – but ultimately correctly – the Commission seems to share this view when it comes to settlement agreements. The Commission states in its revised TTBER Guidelines:

In the context of a settlement agreement, non-challenge clauses are generally considered to fall outside Article 101(1) of the Treaty. It is inherent in such agreements that the parties agree not to challenge ex post the intellectual property rights which were the centre of the dispute. Indeed, the very purpose of the agreement is to settle existing disputes and/or to avoid future disputes.64

The Commission is correct in noting that one of the fundamental purposes of settlements is to avoid future disputes. Accordingly, even the Commission assumes that agreements ending a dispute are not anti-competitive, even if they include a non-challenge clause. But why should sophisticated parties wait until litigation is actually pending before being allowed to conclude an agreement that would efficiently avoid future disputes? There is little special about a settlement agreement as compared to a licence agreement concluded absent pending litigation. In both cases, the parties anticipate their respective risks and chances of winning the envisaged or already pending proceedings.

Summary observations

Licence agreements are probability assessments regarding the validity of intellectual property rights, judging the value of inventions, including the entrepreneurial opportunities and risks inherent to the technology, for both the licensor and the licensee. Accordingly, challenging the licensed technology rights constitutes an attack on the very subject matter of the licence agreement, distorting the contractual relationship between the licensor and the licensee. Consequently, the licensor and technology right owner has an interest worthy of protection in at least having the option to terminate the licence agreement if the licensee challenges validity (eg, by filing a nullity claim against the licensed intellectual property rights). Otherwise, the contractual relationship may lose its balance.

As the Commission acknowledges, and from a comparison with non-challenge clauses in settlement agreements, there is no general presumption of (appreciable) anti-competitive effects of non-challenge clauses and termination-for-challenge provisions. Considering this, and the shift of balance in licence agreements, the general exclusion of non-challenge clauses and termination-for-challenge provisions (in non-exclusive licence agreements) from the safe harbour through the revision of article 5(1) TTBER seems unjustified, unnecessary and disproportionate. In this regard, it would be more appropriate to expand the safe harbour of the TTBER to non-challenge clauses and termination-for-challenge provisions, with the opportunity to withdraw the benefit of the TTBER in individual cases pursuant to article 6 TTBER should the non-challenge clauses or termination-for-challenge provisions have significant, appreciable anti-competitive effects.

Outlook

The discussion about non-challenge clauses and termination-for-challenge provisions is clearly not at an end. Ultimately, the Court of Justice of the European Union will have to decide upon these questions. Until then, a critical evaluation of the potential competition law aspects of licence agreements is more important than ever.

Notes

  1. von Dietze/Janssen, Kartellrecht in der anwaltlichen Praxis, 4th ed. 2011, recital 340; Brinker in Schwarze/Becker/Hatje/Schoo, EU-Kommentar, 3rd ed. 2012, article 101 TFEU recital 96; Bauer in Liebscher/Flohr/Petsche, Handbuch der EU-Gruppenfreistellungsverordnungen, 2nd ed 2012, 2. Teil section 2 A. recital 1.
  2. Commission Regulation (EU) No. 316/2014 of 21 March 2014 on the application of article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements (OJ L 93/17, 28 March 2014), recital (4) See also the related guidelines, Communication from the Commission – Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union to technology transfer agreements (OJ C 89/3, 28 March 2014) (TTBER Guidelines), para 9.
  3. Bechtold, GWB, 7th ed. 2013, section 2 recital 45; Brinker in Schwarze/Becker/Hatije/Schoo, EU-Kommentar, 3rd ed. 2012, article 101 TFEU recital 96.
  4. Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed. 2012, IV. F. I. 2. recital 5.
  5. Weiß in Calliess/Ruffert, EUV/AEUV, 4th ed 2011, article 101 TFEU recital 226 et seq.
  6. See, eg, European Commission, Antitrust decisions on standard essential patents (SEPs) – Motorola Mobility and Samsung Electronics – Frequently asked questions, MEMO/14/322, 29 April 2014; European Commission, Commission accepts legally binding commitments by Samsung Electronics on standard essential patent injunctions, Press Release IP/14/490, 29 April 2014; and European Commission, Commission finds that Motorola Mobility infringed EU competition rules by misusing standard essential patents, Press Release IP/14/489, 29 April 2014.
  7. See, eg, 2014 TTBER Guidelines, para 134.
  8. See above, footnote 2.
  9. Commission Regulation (EC) No. 772/2004 of 27 April 2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements (OJ L 123/11, 27 April 2004).
  10. Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. I. 4. b) recital 29.
  11. European Commission, Commission Report XXXIInd Competition Policy Report 2002 (2004/C 108/19), para 2.2.1; Fuchs, ZWeR 2005, 1, 3 (with further references).
  12. TTBER Guidelines, para 41.
  13. TTBER, article 3.
  14. TTBER, article 4.
  15. TTBER, article 5.
  16. TTBER Guidelines, para 156.
  17. Technology rights within the meaning of the TTBER solely encompass relevant technology rights held by the licensor in the Member States. Otherwise, there are no technology rights to be transferred within the meaning of the TTBER (cf TTBER Guidelines, para 44).
  18. Cf article 1(1)(c) in conjunction with article 2 TTBER.
  19. Newly inserted article 2(3) TTBER; Recital (9) TTBER.
  20. TTBER Guidelines, para 58 et seq.
  21. TTBER Guidelines, para 53.
  22. Cf article 1(1)(d) Commission Regulation (EU) No. 1218/2010 of 14 December 2010 on the application of article 101(3) of the Treaty on the Functioning of the European Union to certain categories of specialisation agreements, OJ L 335/43, 18 December 2010.
  23. Cf article 1(1)(a) in conjunction with article 1(1)(m), Commission Regulation (EU) No. 1217/2010 of 14 December 2010 on the application of article 101(3) of the Treaty on the Functioning of the European Union to certain categories of research and development agreements, OJ L 335/36, 18 December 2010.
  24. Cf Recital (7) TTBER and TTBER Guidelines, para 70 et seq.
  25. Commission Notice on agreements of minor importance which do not appreciably restrict competition under article 81(1) of the Treaty establishing the European Community (de minimis), OJ C 368/13, 22 December 2001. The de minimis notice is currently under revision. The Commission wants to adapt the notice to the developed CJEU case law, having recently established that the concept of a non-appreciable impact on competition (de minimis) does not apply when the agreement contains so-called by object restriction (Case C-226/11, Expedia Inc v Autorité de la concurrence, et al, 13 December 2012 [published in GRUR Int. 2013, 285]). Furthermore, for reasons of legislative simplification, the Commission plans to implement dynamic referrals to the various block exemption regulations; this shall ensure, that the de minimis notice does not need to be updated every time any regulation is revised.
  26. TTBER Guidelines, para 79.
  27. Cf definition in article 1(1)(n) TTBER; TTBER Guidelines, para 27 et seq.
  28. Recital (10) TTBER; TTBER Guidelines, para 82.
  29. Recital (11) TTBER; TTBER Guidelines, para 84.
  30. TTBER Guidelines, para 19 et seq, 86 et seq. Cf Commission Notice on the definition of relevant market for the purpose of community competition law, OJ C 372/5, 9 December 1997.
  31. TTBER Guidelines, para 156.
  32. Recital (14) TTBER; Nordemann in Loewenheim/Meessen/Riesenkampff, Kartellrecht, 2nd ed 2009, recital 183; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. I. 4. b) recital 29.
  33. Bauer in Liebscher/Flohr/Petsche, Handbuch der EU-Gruppenfreistellungsverordnungen, 2nd ed 2012, 2. Teil section 2 D. recital 67.
  34. Röhling, in Münchener Kommentar, EU-Wettbewerbsrecht, 2007, EC No. 772/2004 article 4 recital 2.
  35. TTBER Guidelines, para 99; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 4 recital 10 et seq.
  36. TTBER Guidelines, para 103; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 4 recital 16 et seq.
  37. TTBER Guidelines, para. 105; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 4 recital 24 et seq.
  38. TTBER Guidelines, para 115 et seq; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 4 recital 66 et seq. Cf article 5 para 2 TTBER for non-competitors.
  39. Cf definition in article 1(2)(o) TTBER.
  40. TTBER Guidelines, para 95, 156; Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 4 recital 99.
  41. TTBER Guidelines, para 95.
  42. Cf TTBER Guidelines, para 156.
  43. TTBER Guidelines, para 94.
  44. Case T-17/93 Matra [1994] ECR II-595, para 85; TTBER Guidelines, para 94.
  45. TTBER Guidelines, para 128 et seq.
  46. Bauer in Liebscher/Flohr/Petsche, Handbuch der EU-Gruppenfreistellungsverordnungen, 2nd ed 2012, 2. Teil § 2 E. recital 101; TTBER Guidelines, para 128.
  47. Revised Guidelines, para 128; Klawitter in Wiedemann, Kartellrecht, 2nd ed 2008, 4. Kap. section 13 C V recital 258.
  48. Cf TTBER Guidelines, para 129 et seq.
  49. Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 5 recital 1; Recital (15) TTBER.
  50. TTBER Guidelines, para 131.
  51. Cf TTBER Guidelines, para 133 et seq.
  52. Cf Commission Decision No. 76/29/EEC of 2 December 1975 relating to a proceeding under article 85 of the EEC Treaty (AOIP v Beyrard), OJ L-6/8, 13 January 1976; TTBER Guidelines, para 141. In regard to agreements between competitors, such a provision constitutes a hard-core restriction (article 4, 1(d) TTBER).
  53. Röhling, in Münchener Kommentar, EU-Wettbewerbsrecht, 2007, EC No. 772/2004, Introduction, recital 17.
  54. According to case law of the Court of Justice of the European Union (CJEU), there is no general presumption of anti-competiveness of non-challenge clauses, cf. Case C-68/86, Bayer v Süllhofer, 27 September 1988, ECR 1988, I-5249, recital 14 et seq (also published in GRUR Int. 1989, 56).
  55. See also Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004 article 5 recital 12.
  56. European Commission, Draft Commission Regulation C(2013) 921 draft on the application of article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements.
  57. 2004 TTBER, article 5(1)(c); 2004 TTBER Guidelines, para 113.
  58. TTBER Guidelines, para. 138.
  59. TTBER Guidelines, para 136.
  60. TTBER Guidelines, para. 137.
  61. TTBER Guidelines, para 139.
  62. TTBER Guidelines, para 139.
  63. In the 2004 TTBER Guidelines, the Commission stated that a termination right in favour of the licensor ensures that ‘the licensor is not forced to continue dealing with a licensee that challenges the very subject matter of the licence agreement’ (2004 TTBER, para 113); cf also Fuchs in Immenga/Mestmäcker, EU-Wettbewerbsrecht, 5th ed 2012, IV. F. EC No. 772/2004, article 5 recital 15; Bechtold/Bosch/Brinker/Hirsbrunner, EG-KartellR, 2nd ed 2009, EC No. 772/2004, article 5 recital 7.
  64. TTBER Guidelines, para 242.

Quinn Emanuel Urquhart & Sullivan LLP

An der Alster 3
20099 Hamburg
Germany
Tel: +49 40 89728 7000
Fax: +49 40 89728 7100

Nadine Herrmann
nadineherrmann@quinnemanuel.com

www.quinnemanuel.com

Quinn Emanuel Urquhart & Sullivan LLP is generally recognised as one of the premier firms in the United States for high-stakes business litigation. With 670+ lawyers in 16 offices in nine countries globally, we are the largest law firm in the world dedicated solely to business litigation and arbitration. Our European offices form a dynamic team of attorneys who collaborate strategically to offer effective national and cross-border litigation, arbitration and investigation advice. Our approach is lean, muscular, and powerful: we work together to develop the litigation strategy that is most effective for our clients – be it execution of a single, national solution, implementation of a pan-European approach, or coordination of an integrated, global strategy. Our business is winning cases – and we do.

Next Chapter: Germany: Merger Control

Back to top

Law Business Research Ltd

87 Lancaster Road, London
W11 1QQ, UK
Queen's Award logo American Bar Association strategic partner logo

Copyright © 2014 Law Business Research Ltd. All rights reserved. | http://www.lbresearch.com

87 Lancaster Road, London, W11 1QQ, UK | Tel: +44 207 908 1188 / Fax: +44 207 229 6910

http://www.globcompetitionreview.com | editorial@globalcompetitionreview.com