European Commission Consults on New Rules for Patents and Know-how
On Dec. 6, 2011, the European Commission (EC) started a consultation on the
application of the EU competition law rules to “technology transfer agreements”
(TTAs). TTA is the EC’s term for patent, know-how and software copyright
licensing agreements, as well as similar agreements.
The current regime consists of a “block exemption regulation”, which creates
a safe harbor under EU competition law for certain TTAs, plus guidelines on the
application of the block exemption and on the assessment under EU competition
law of agreements that fall outside the block exemption. These rules, which came
into force in 2004, expire in May 2014, and the EC is seeking views on how to
This consultation is important for any business that is or might be a
licensor or licensee under a TTA in the EU, because the results of the
consultation will set in place the EC’s competition law enforcement policy in
this area for several years to come.
EU Court Supports Cartel Damage Claimants
The EU’s General Court (its second highest court of appeal) has held that a
party seeking damages for loss caused by the operation of a cartel is entitled
to the EC’s index of its case file.
The EC fined the members of a hydrogen peroxide cartel in 2006. In 2008, in
preparation for filing a private claim for damages in a national court, a third
party representing purchasers sought access to the index. The request was made
under EU Regulation 1049/2001, which allows for public access to certain
documents held by EU bodies such as the EC. The EC rejected this request, on the
basis that disclosure would negatively impact its ability to investigate cartels
in the future.
In overturning this rejection, the court noted that “the purpose of
Regulation 1049/2001 is to give the public the fullest possible right of access
to documents held by the [EU] institutions”. The judgment is important because
it strengthens the ability of claimants to obtain documents from the EC so as to
substantiate claims for damages arising out of cartels. The EC will be very
disappointed by the result.
European Commission Looks at Joint Development Agreement and Potential Ambush
On Dec. 16, 2011, the EC started a competition law investigation concerning
agreements between Honeywell and DuPont for the development of a new refrigerant
for air conditioning systems in cars, known as 1234yf. The previous refrigerant,
R134a, no longer met EU rules due to its global warming potential. 1234yf was
selected following a process conducted under the auspices of a trade body
representing the automotive industry.
The EC is now investigating whether joint development, licensing and
production arrangements entered into between Honeywell and DuPont in relation to
the new refrigerant restrict competition. This is a reminder that horizontal
agreements of this nature can raise concerns under EU competition law and need
to be considered carefully.
The EC is also investigating whether Honeywell engaged in deceptive conduct
during the evaluation of 1234yf, specifically by not disclosing its patents and
patent applications while the refrigerant was being assessed and then by failing
to grant licences on fair and reasonable (so called “FRAND”) terms. This would
be, if ultimately upheld, a type of “patent ambush”.
Agency Under EU Competition Law; The EC Investigates E-books
It appears that the application of the agency principle under EU competition
law will be tested in the online world as a result of an EC investigation,
announced on Dec. 6, 2011, into sales of e-books in the EU. The EC stated that it
is examining “the character and terms of the agency agreements entered into” by
certain publishers and retailers for the sale of e-books in the EU.
Under EU competition law, a “true agent” is seen as part of the principal in
whose name it sells. Therefore, the principal can control the prices at which
the agent sells, as well as the customers it sells to and its other terms and
conditions of trade. A true agent is essentially one that does not take on
material risk when concluding or negotiating contracts for its principal.
The investigation is just the latest in a string of cases involving
technology and related markets. The EC is watching these closely and continually
stresses that competition law will continue to be applied, while taking into
account the dynamic nature of the markets.
Additional EU/UK competition law news coverage can be found in our
We publish a newsletter and bulletins on
U.S. antitrust developments, as well as regular publications on
numerous other topics.