Following our report last year on the CMA's call for inputs on the Assimilated Technology Transfer Block Exemption Regulation (TTBER), the CMA has now published its recommendations to the Secretary of State regarding what should happen when the TTBER expires on 30 April 2026.
But, first, some background...
- The TTBER is a legal instrument that automatically exempts certain technology transfer agreements from the Chapter I prohibition of the Competition Act 1998, provided they meet specified conditions. These agreements typically involve the licensing or assignment of intellectual property rights (e.g., patents, design rights, software copyrights, know-how) for the production of goods or services.
- The TTBER was originally an EU regulation, retained in UK law post-Brexit as the "assimilated TTBER." It is due to expire on 30 April 2026.
So, what next?
- Following its call for inputs last year, the CMA recommends replacing the TTBER with a new UK-specific Technology Transfer Block Exemption Order (TTBEO) to ensure continued legal certainty and to facilitate pro-competitive technology licensing in the UK.
- The TTBEO would have a duration of 12 years (with a
transitional period of 1 year) and largely reflect the TTBER (i.e.
by exempting "the categories of technology transfer agreements
currently exempted by the TTBER and includes the same definitions,
conditions and obligations as the TTBER (adapted as necessary for
UK purposes)") with some key amendments, including:
- removing "utility models" from the definition of "technology rights" on the basis that UK law does not provide protection for them;
- adding "copyright in a database" and "database rights" to the definitions of "technology rights", reflecting the growing importance of data in the modern economy;
- introducing definitions of "active sales" and "passive sales" which are aligned with those in the UK Vertical Agreements Block Exemption Order (VABEO) to provide clarity and consistency;
- introducing an alternative test in addition to carrying over the existing market share thresholds from the TTBER. This alternative test would mean that, if there are three or more independently controlled competing technologies, the agreement may benefit from the block exemption. This is intended to address practical difficulties in calculating market shares in technology markets;
- regarding the calculation of market share using data from the preceding year, adding provisions to the effect that, if the preceding calendar year is not representative of the parties' position in the relevant market(s), the market share is to be calculated as an average of the parties' market shares for the three preceding calendar years. This "footprint" approach for calculating market share will apply equally to both parties;
- increasing the grace period for agreements exceeding market share thresholds from two to three years, providing greater legal certainty, especially for novel technologies; and
- providing the CMA with powers to investigate and, if necessary, remove the benefit of the block exemption from individual agreements that do not meet the exemption criteria.
And how will it affect businesses?
For businesses, the TTBEO should provide continued legal certainty and a clear framework for structuring technology transfer agreements, reducing compliance burdens and facilitating innovation and the dissemination of technology. Businesses operating in both the UK and EU will benefit from broad alignment between the TTBEO and the (draft) revised EU TTBER, minimising compliance costs and legal uncertainty for cross-border technology licensing.
The CMA has promised to publish a guidance document alongside the TTBEO, both of which are expected to be in place by 30 April 2026 when the TTBER expires.
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