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Exemption for R&D agreements

This regulation provides a block exemption regulation for research and development (R&D) agreements and, in doing so, aims to ensure an effective protection of competition whilst providing adequate legal security for parties to R&D agreements.

ACT

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.

SUMMARY

Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) is not applicable to research and development (R&D) agreements *. In accordance with Regulation (EEC) No 2821/71, however, this regulation provides an exemption for R&D agreements which contain provisions relating to the assignment or licensing of intellectual property rights in order to carry out the joint R&D, paid-for R&D or joint exploitation, so long as those provisions are not the primary object of such agreements, but are instead directly related to and necessary for their implementation. The regulation also block exempts the joint exploitation of the results of R&D carried out by the parties under the regulation. This regulation replaces Regulation (EC) No 2659/2000, which expired on 31 December 2010.

Conditions for exemption

To be exempted, the agreement must state that all the parties have full access to the final results of the R&D, including any resulting intellectual property rights and know-how, for the purposes of further R&D and exploitation. If the parties limit their rights of exploitation, access to the results for the purposes of exploitation may be limited accordingly.

Where the agreement only provides for joint R&D or paid-for R&D, each party must have access to any pre-existing know-how of the other parties concerned, if this know-how is indispensable for the exploitation of the results. This exchange of pre-existing know-how may be compensated, but the compensation must not be so high as to effectively prevent such access.

Any joint exploitation may only concern results which are protected by intellectual property rights or constitute know-how and which are indispensable for the manufacture of the contract products or the application of the contract technologies.

Market share threshold and duration of exemption

Where the parties to the R&D agreement are not competing undertakings, the exemption provided for by this regulation is applicable for the duration of the R&D. Where the results are jointly exploited, the exemption continues to apply for seven years after the contract products or contract technologies are first put on the EU market.

Where the parties are competing undertakings, the exemption is applicable only if, at the time the R&D agreement is entered into:

  • in the case of joint R&D agreements, the combined market share of the parties does not exceed 25 % on the relevant product and technology markets;
  • in the case of paid-for R&D agreements, the combined market share of the financing party and all the parties with which the financing parties has entered into R&D agreements, relating to the same contract products or contract technologies, does not exceed 25 % on the relevant product and technology markets.

At the end of the seven years duration, the exemption shall continue to apply as long as the combined market share of the parties does not exceed 25 % on the relevant markets.

Hardcore restrictions

The exemption does not apply to R&D agreements which, directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object:

  • the restriction of the freedom of the parties to carry out R&D in an unrelated field;
  • the restriction of the freedom of the parties to pursue R&D in a related field after the completion of the R&D agreement concerned;
  • the limitation of output or sales, with certain exceptions.

Excluded restrictions

The exemption does not apply to the following obligations contained in R&D agreements:

  • the obligation not to challenge the validity of related intellectual property rights after completion of the R&D;
  • the obligation not to grant licences to third parties to manufacture the contract products or to apply to contract technologies, unless the agreement provides for the exploitation of the results by at least one of the parties and such exploitation takes place in the internal market vis-à-vis third parties.
Key terms used in the act
  • Research and development agreement: an agreement entered into between two or more parties, relating to the conditions under which the parties pursue:
    • joint research and development of contract products or contract technologies and joint exploitation of the results of that research and development;
    • joint exploitation of the results of research and development of contract products or contract technologies jointly carried out pursuant to a prior agreement between the same parties;
    • joint research and development of contract products or contract technologies excluding joint exploitation of the results;
    • paid-for research and development of contract products or contract technologies and joint exploitation of the results of that research and development;
    • joint exploitation of the results of paid-for research and development of contract products or contract technologies pursuant to a prior agreement between the same parties;
    • paid-for research and development of contract products or contract technologies excluding joint exploitation of the results.

REFERENCES

ActEntry into force – Date of expiryDeadline for transposition in the Member StatesOfficial Journal

Regulation (EU) No 1217/2010

1.1.2011 – 31.12.2022

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OJ L 335, 18.12.2010

Last updated: 25.05.2011
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