EU updates Technology Transfer Block Exemption Regulation for fast-changing digital economy

The European Commission has overhauled the EU framework governing technology licensing, adopting a revised Technology Transfer Block Exemption Regulation (TTBER) and accompanying guidelines (TTGL) on 16 April that took effect on 1 May. This follows a broadly positive evaluation of the 2014 framework.

Regulation (EU) 316/2014 applies article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements. The revised regulation makes targeted but significant changes to reflect recent market and technological developments in the digital and data economy.

Businesses and their in-house legal teams with existing technology transfer agreements will want now to ensure compliance with the revised TTBER before the transitional period ends on 30 April 2027.

Technology transfer agreements

Technology transfer agreements enable one party to grant another the right to exploit technology rights for the purpose of producing goods or services. These rights include patents, design rights, software copyrights and know-how. They are a key driver of innovation and economic efficiency, as they allow technologies to be disseminated and put to productive use.

In many instances, technology transfer agreements either do not restrict competition at all or generate pro-competitive efficiencies that ultimately benefit consumers. However these agreements, or specific provisions within them, may also give rise to competition concerns. For example, they may facilitate collusion between competitors, create barriers to market entry or expansion, or reduce inter- or intra-technology competition, including by diminishing the parties' incentives to innovate.

The TTBER provides a framework of legal certainty for such agreements by block exempting those where parties have a limited market share and where the agreement does not contain hardcore or excluded restrictions; parties whose agreements do not qualify have their assessed individually. This should reduce compliance costs while safeguarding competition.

The revised regulation and guidelines will remain in force until 30 April 2038, with a one-year transitional period for existing agreements.

Scope narrows

The revised regulation preserves the core structure of its predecessor, including market share thresholds, hardcore restrictions and excluded restriction. One of the core changes in the 2026 regulation is that it clarifies that licensing agreements primarily aimed at the resale or distribution of software "whether through physical or digital channels" fall outside its scope. These are treated as distribution agreements under the Vertical Block Exemption Regulation 

It also excludes licensing negotiation groups (LNGs) arrangements, whereby technology implementers negotiate licence terms jointly, from the block exemption. However, the revised guidelines provide new guidance on their assessment.  Parties to licensing agreements will want to assess carefully whether their agreement falls within the scope of the TTBER.

Data licensing

A notable addition in the revised guidelines is new guidance on data licensing, reflecting the growing importance of data in the economy. The TTBER can apply to data licensing where the licensed data qualifies as a technology right, such as production know-how. For databases protected by copyright or the database sui generis right, the Commission will apply block exemption principles by analogy; other types of data licensing require a case-by-case assessment.

Information exchanges in the context of database licensing do not generally restrict competition by object. Where such exchanges go beyond what is necessary for the licensing agreement, the Commission will assess them under its horizontal guidelines. Data-sharing agreements mandated by the Data Act will generally be compliant, unless used to disguise anticompetitive arrangements such as price fixing or customer sharing.

Licensing negotiation groups

Although LNGs fall outside the TTBER's scope, the revised guidelines provide detailed new guidance on their assessment. The guidelines recognise that LNGs can have pro-competitive effects, such as reducing transaction costs and enabling more balanced negotiations. However, they may also raise concerns, including the exercise of excessive purchasing power or coordination between implementers in downstream markets ("Buyer Cartels").

The guidelines distinguish genuine LNGs, which operate transparently and focus on negotiating licence terms, from Buyer Cartels. Genuine LNGs are generally not considered to restrict competition by object. The Commission decided against a formal safe harbour given limited enforcement experience, but the guidelines set out risk-mitigating measures that LNGs can adopt.

Technology pools

Technology pools are arrangements where parties assemble a package of technology rights for licensing to pool members or third parties. The revised guidelines introduce changes to the soft safe-harbour conditions to ensure that the conditions these are sufficiently specific.

The essentiality requirements have been strengthened: pools are now required to disclose to potential and existing licensees both the individual rights included in the pool and the methodology used to assess their essentiality. Anti-double-dipping rules have been introduced, requiring pools to ensure licensees are not charged more than once for the same technology rights. The existing condition requiring pooled rights to be licensed on fair, reasonable and non-discriminatory (FRAND) terms has also been clarified to apply to the licences granted by the pool itself.

Market share

The 2026 TTBER also introduces changes to how market share is assessed, including a requirement to apply the thresholds on any relevant market, a three-year average option and a zero-share rule. This represents a subtle but meaningful change to the market share thresholds. Where the 2014 TTBER referred to the combined or individual market share "on the relevant market(s)", the 2026 regulation replaces this with "on any relevant market".

This means clarifies that the thresholds must be satisfied across each relevant market individually: if the applicable threshold is exceeded on even a single relevant market – whether a product, technology or geographic market – the block exemption will not apply in respect of that market. Although this largely reflects the existing interpretation, the revised wording removes any residual ambiguity and confirms a market-by-market assessment.

Parties will want to assess their market share separately for each relevant product, technology, and geographic market. If the threshold is exceeded on any one of those markets, the block exemption will not apply to that market. While this reinforces legal certainty, continuous monitoring becomes particularly important for agreements covering multiple relevant markets.

Three-year average

Where the preceding calendar year is not representative, market shares may now be calculated as an average over the three preceding calendar years.

This change provides flexibility for parties operating in dynamic markets. Those with a non-representative preceding year may relay on a more stable calculation option to avoid losing the protection afforded by the block exemption.

Zero-share rule

Technologies that have not yet generated sales of contract products are deemed to hold a zero market share providing certainty for early-stage licensing.

As such, these fall squarely within the TTBER's market share threshold. This allows start-ups and early-stage technology developers to benefit from the block exemption right away and with significant reduced compliance costs.

Three-year grace period

The grace period, during which the block exemption continues to apply after market shares exceed the thresholds, has been extended from two to three years. As such, the block exemption remains applicable where market shares exceed thresholds during the agreement's term.

Calculation in technology markets

The method for calculating market shares in technology markets has been refined. The provision now refers to "the market share of a party active on a relevant technology market" rather than "the market share of a licensor on a relevant market".

In addition, the market share must be calculated on the basis of the combined sales of that party and its licensees of products incorporating that party's licensed technology rights. Although the general formulation is broadly similar, the 2026 revision uses more precise language, moving the calculation basis from "the licensed technology rights" to "products incorporating that party's licensed technology rights".

Accordingly, parties should ensure they calculate market shares using product-level sales data that incorporates their licensed technology. This change introduces more precision. Moreover, the guidelines provide more information on the exact calculation.

Clarified hardcore restriction

The 2026 revised regulation clarifies the exception to the hardcore restriction on passive sales for non-competitors operating selective distribution systems. The restriction of sales to unauthorised distributors is now expressly limited to territories where the licensor actually operates a selective distribution system, rather than applying globally.

Updated definitions

The updated regulation revises several key definitions including those of "potential competitor", "active sales" and "passive sales" and the accompanying TTGL refine the guidance around these concepts. The updates are limited in scope and aimed at improving clarity and reflect the recently revised VBER as well as developments in case law and enforcement practice.

Osborne Clarke comment

The 2026 TTBER retains the core elements of the 2014 framework: the market share thresholds of 20% combined for competitors and 0% individual for non-competitors; the hardcore restrictions, including price-fixing, output restrictions and market allocation; and the excluded restrictions, such as exclusive cross-licences for improvements and non-challenge clauses. These all remain substantively unchanged.

Parties to existing licence agreements have until 30 April 2027 to bring agreements that were compliant under the 2014 TTBER into conformity with the new rules.

Data licensing arrangements, market share calculations and any involvement in licensing negotiation groups are areas where the new rules bring meaningful change where particular attention will be worthwhile. Early assessment will help avoid enforcement risks and ensure continued benefit from the block exemption.