CommitteeReports


recognising that these restrictions do not cause competition problems;


• by recognising that there is nothing inherently anti-competitive about granting rights to commercialise IP in different technical fields, territories, markets or customers;


• by recognising that it is permissible for a licensor to require an exclusive licensee not to commercialise products that compete with the licensed product; and


• by recognising that royalties on combination products (where part of a product is no longer protected by a patent) are not anti-competitive.


to “technology markets”. The general approach of any new regulation should be to provide a clear “safe harbour” for most technology transfer agreements that are encountered in practice, based upon criteria that can be readily applied by any commercial lawyer or business executive, without the need to consult an economist. The CLLS nevertheless appreciates that it is difficult to avoid criteria based on market shares, as a proxy for a fuller economic analysis and expect the parties as a minimum to identify whether there are competitors in any market and their respective market shares. However, technology markets are a theoretical and sometimes impractical concept and the TTBER would be more business-friendly if this was not part of the assessment as to whether the safe harbour is available. We also accept the need for the TTBER to be limited to bilateral agreements and to leave parties to assess their multiparty agreements by reference to guidelines. In order for the existing guidelines to be easier for small and medium sized enterprises (SMEs) to use, we suggest that the Commission could consider having separate Guidelines for bilateral and multilateral agreements and possibly incorporating the latter into the Horizontal Guidelines.


CLLS believes that the regime should be liberalised (and certainly not added to):


• by removing the list of excluded restrictions altogether and


4 • City Solicitor • Issue 77


The single biggest issue is assessing the relevant market and market share, as this is often difficult, complex, time- consuming and therefore expensive, but even after completing such an assessment the parties may have little certainty as to how the Commission might be expected to approach the same facts. We suggested that the Commission considers:


(1) whether the market share test remains essential in all cases;


(2) whether the market share thresholds should be raised for both competing and non- competing undertakings, to give parties greater comfort from headroom;


(3) whether, even if it does, for licence agreements between small or medium-sized undertakings, the default should be simply that these are accepted as being for the benefit of promoting innovation and within the TTBER safe harbour, unless the technology transfer arrangement contains a listed “black-listed” or “hardcore” restriction;


(4) whether the default should also be that a small or medium- sized undertaking falls within the TTBER safe harbour, even if it has developed a new, market-leading technology in which it may be seen as dominant, again provided the technology transfer arrangement contains no listed “black-listed” or “hardcore” restrictions;


(5) whether there should be a more lenient regime for technology reaching the end of its economic life, where it is about to come off- patent and become public domain; and


(6) if market share criteria are retained, more guidance on how to calculate market-share is to be welcomed, together with practical examples in the guidelines. Perhaps, there may be scope for the Commission to provide a quick view system to verify a party’s understanding on a set of facts.


Guidance should also be given to the types of arrangements which the Commission will consider so serious a breach of Art 101 as to warrant the prospect of enforcement action being taken. Again, this will guide business to when it is necessary to undertake full economic and legal analysis in relation to what otherwise may be a routine licence agreement being concluded. The Commission could provide a document setting out its enforcement priority in relation to technology arrangements that fall foul of Art 101 TFEU.


The Committees would also like to thank the Intellectual Property Lawyers Association for their work and input which was invaluable.


The working party consisted of Robert Bell (Speechly Bircham), Howard Cartlidge (Olswang) and Philip Wareham (Hill Dickinson) from the Competition Law Committee and Joel Smith (Herbert Smith) of the Intellectual Property Law Committee, with useful input from across the members of the wider Committees. The full submission is on the CLLS Website.


Joel Smith, Chairman, Herbert Smith LLP


Revenue Law Committee


The Revenue Law Committee continues to focus on commenting on tax matters relevant to the work and clients of City firms, in particular, responding to HMRC and HM Treasury consultations.


Following the publication of the Report of the GAAR (General Anti-Avoidance Rule) Study Group chaired by Graham Aaronson QC in November 2011,


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