UK Watchdog Proposes Tech Licensing Framework Post-Brexit: A Detailed Analysis
Introduction
In a significant move to reshape the UK’s post-Brexit regulatory landscape, the Competition and Markets Authority (CMA) has recommended replacing the EU-era Assimilated Technology Transfer Block Exemption Regulation (TTBER) with a new, UK-specific framework. This proposal aims to modernize competition rules, providing clearer guidelines for technology licensing agreements and fostering innovation and investment in the UK. (Reuters)
Background: The TTBER and Its Role
The TTBER, retained in UK law after Brexit, currently allows companies to share and license technology—such as patents, know-how, and software copyrights—under certain conditions without breaching competition law. This regulation has facilitated technology transfer agreements that can benefit innovation, investment, and growth. However, some clauses within such agreements can also have negative effects on competition, prompting the need for a revised framework. (ICLG Business Reports)
The CMA’s Proposed UK Technology Transfer Block Exemption Order (TTBEO)
The CMA’s proposal introduces a 12-year UK-specific exemption order to replace the expiring TTBER. Key features of the proposed TTBEO include:
- Updated Definitions: Removal of outdated references like “utility models” and inclusion of newer rights such as database copyrights to align with UK law.
- Exemption Criteria: Agreements could qualify for exemption either by meeting existing market share thresholds or by demonstrating the presence of at least three competing technologies.
- Transitional Period: A one-year transitional period following the expiry of the TTBER on 30 April 2026, during which existing agreements that meet the conditions of the TTBER will continue to benefit from its terms until 30 April 2027.
- Enhanced CMA Powers: The CMA would have robust powers to investigate and, where appropriate, withdraw the benefit of the block exemption on a case-by-case basis. (Lexology)
Consultation and Industry Feedback
The CMA conducted a consultation process, receiving 12 responses, including feedback from major industry players such as Nokia, patent licensing platform Avanci, and law firm Dentons. None of the respondents recommended that the TTBER should be allowed to lapse without being replaced. Six respondents noted that doing so would create a “negative impact.” While the respondents praised the TTBER for working “well overall,” they suggested various changes for consideration in the proposal of the replacement block exemption order. (ICLG Business Reports)
Implications for Businesses and Innovation
The proposed TTBEO aims to provide businesses with greater clarity and flexibility while ensuring that licensing deals do not harm competition. By updating outdated references and aligning with modern rights, the new framework seeks to foster innovation and investment in the UK. The introduction of a transitional period ensures a smooth transition for existing agreements, minimizing potential disruptions.
Conclusion
The CMA’s recommendation to replace the EU-era TTBER with a UK-specific framework marks a pivotal step in modernizing the UK’s competition rules post-Brexit. By aligning with current technological advancements and providing clearer guidelines, the proposed TTBEO aims to create a conducive environment for innovation and investment. As the UK continues to navigate its post-Brexit regulatory landscape, such initiatives are crucial in establishing a competitive and forward-thinking economy.
The UK’s Competition and Markets Authority (CMA) has proposed replacing the EU-derived Assimilated Technology Transfer Block Exemption Regulation (TTBER) with a new, UK-specific framework for technology licensing agreements. This move aims to modernize post-Brexit competition rules and provide clearer guidelines for businesses.
Key Features of the Proposed Framework
- Duration and Scope: The new framework would offer a 12-year exemption, allowing companies to share and license technology—such as patents or software—without breaching competition law.
- Market Share Thresholds: Exemptions could be granted based on market share thresholds or the presence of at least three competing technologies.
- Updated Terminology: The framework proposes removing outdated references like “utility models” and introducing modern rights such as database copyrights.
- Flexibility and Clarity: The goal is to provide businesses with greater clarity and flexibility while ensuring that licensing deals do not harm competition.
Case Studies and Industry Feedback
- Nokia: As a major player in the telecommunications sector, Nokia’s participation in the consultation process indicates a vested interest in the proposed changes.
- Sisvel International: This patent firm, known for its role in licensing intellectual property, also engaged in the consultation, highlighting the importance of the new framework for patent licensing.
- Avanci: An independent licensing marketplace, Avanci’s involvement suggests that the proposed changes could impact the way technology licensing is conducted in the marketplace.
These consultations reflect a broad interest from various stakeholders in the technology sector, underscoring the significance of the proposed regulatory changes.
Industry Reactions
While specific comments from the consulted companies have not been publicly disclosed, the CMA’s initiative aligns with the government’s broader objective to tailor post-Brexit regulations to foster innovation, investment, and economic growth. The inclusion of modern rights and updated terminology suggests a move towards a more flexible and future-proof regulatory environment.
Broader Implications
This proposed framework is part of the UK’s ongoing efforts to reshape its regulatory landscape post-Brexit. By moving away from EU-derived regulations, the UK aims to create a more tailored and dynamic environment for technology licensing, which could serve as a model for other sectors seeking to modernize their regulatory approaches.