The European Commission (the "Commission") is considering revisions to the rules governing the assessment of technology transfer agreements such as patent licences in advance of the expiry of the existing rules on 30 April 2014.

The Commission proposes "to update the current regime in order to strengthen incentives for research and innovation, facilitate the diffusion of intellectual property and stimulate competition."

The Existing Rules -

Broadly speaking, licensing is seen as pro-competitive as it entails the diffusion of intellectual property and the promotion of innovation. However, competition concerns can arise in relation to certain restrictions placed on licensees as to the way they are permitted to use the licensed technology. At the extreme end, an agreement between two competitors to use patents to divide markets between them would clearly be problematic.

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