Technology Transfer Agreement
With technology transfer agreements, licenses for technology are handed over. Examples of technology transfer agreements are patent license agreements, computer software copyright agreements, and mixed-form agreements where, among other things, copyright usage licenses are agreed when this is not the main purpose of the agreement. Agreements in which part of the risk related to using the technology remains with the transferal are also considered technology transfer agreements.
Technology transfer agreements generally improve economic efficiency and promote competition, as they can reduce duplication of research and development, increase incentives for companies’ initial research and development, and facilitate the diffusion of technology, creating competition in product markets. However, increasing efficiency alone is not enough, a reasonable part of the efficiency must be passed on to consumers. In addition, the agreement must not include restrictions other than those that are necessary, and the agreement must not eliminate competition from a significant part of the market for the products in question.
A technology transfer agreement or contractual restriction is prohibited if its aim is to restrict competition or if the agreement causes more harm than benefits. Whether a technology transfer agreement restricts competition must be assessed in the actual circumstances in which competition would occur without the restrictive agreement. For example, competition between traders is harmed when two competing companies enter into a license agreement to share the market between them, or when a major licensee excludes competing technologies from the market. Such agreements are of course prohibited due to their purpose and harmful effects on competition.
The block exemption regulation on technology transfer applies to technology transfer agreements between two companies that enable the production of contract products. The block exemption applies to agreements between competing companies, if the companies’ combined market share does not exceed 20 percent in the relevant market. Competing companies are companies that compete with each other in the same relevant technology or product markets. For agreements between companies that do not compete with each other, the group exemption applies when the share of both companies in the relevant market does not exceed 30 percent. The condition for granting an exemption permit is that the agreements do not contain certain restrictions that seriously hinder competition.
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