- At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
- Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
- Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
- Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
- Our Corporate Practice has a reputation for delivering sound legal advice, backed up with extensive industry experience and credentials, to get the best results from technology and digital media transactions.
- In the fast-changing world of employment law our clients need practical, commercial and cost-effective advice. They get this from our team of employment law professionals.
- Our team of leading IP advisors deliver cost-effective, strategic and commercial advice to ensure that your IP assets are protected and leveraged to add real value to your business.
- Our litigation practice advises on all aspects of dispute resolution, with a particular focus on ownership, exploitation and infringement of intellectual property rights and commercial disputes in the technology sector.
- We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
- We work alongside companies, many with disruptive technologies, that seek funding, as well as with the venture capital firms, institutional investors and corporate ventures that want to invest in exciting business opportunities.
- Our regulatory specialists work alongside Kemp Littles corporate and commercial professionals to help meet their compliance obligations.
- With a service that is commercial and responsive to our clients needs, you will find our tax advice easy to understand, cost-effective and geared towards maximising your tax benefits.
- At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
- We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
- Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
- We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
- We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
- For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
- Our focus on technology makes us especially well positioned to give advice on the legal aspects of digital marketing. We advise on high-profile, multi-channel, cross-border cases and on highly complex campaigns.
- The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
- Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
- Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
- We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
- Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
- Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
- Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
- Kemp Little is trusted by some of the worlds leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
- HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
- FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they dont give away to get you started.
European Commission Publishes Second Consultation on Revisions to the Technology Transfer Block Exemption
1. On 20 February 2013 the European Commission published its second consultation on revising the Technology Transfer Block Exemption Regulation (“TTBER”). The TTBER applies to bilateral technology transfer licences where the licensor permits the licensee to use the licensed technology to produce goods or services.
2. The TTBER aims to recognise the pro-competitive benefits of intellectual property licensing by providing both competing and non-competing licensors and licensees with a safe harbour within which they can licence their technology. The original proposal to amend the TTBER was instigated by the impending expiry of the current TTBER on 30 April 2014. The Commission first consulted on revising the current TTBER on 6 December 2011. The deadline for submitting comments to the European Commission for the current consultation is 17 May 2013.
3. On the whole the changes proposed in the draft TTBER attempt to clarify the scope of application of the TTBER which is to be applauded. Other more substantive changes appear to suggest the European Commission is taking a slightly stricter approach to agreements between non-competitors and to restrictions on the licensee’s ability to challenge the validity of the licence or obligations on the licensee to grant back an exclusive licence to the licensor.
Summary of key changes
4. Key changes include:
a. A clarification of the scope of application of the TTBER which should apply for the purpose of producing goods or services.;
b. A clarification and broadening of the definition of technology transfer agreements to include agreements that relate to the purchase of products or the assignment of other intellectual property rights (“IPRs”) provided they are directly related to the production of contract products;
c. A 20% market share threshold will apply to non-competitors where the licensee holds competing technology which it uses for in-house production and which is substitutable for the licensed technology; and
d. Exclusive grant-backs and termination by the licensor on a challenge of the validity of the licensed technology will fall outside the TTBER.
Changes in more depth:
Application of the TTBER: new clarifications
5. The TTBER will be clarified (albeit in the recitals) to state that it only applies to agreements where the licensor permits the licensee to exploit the licensed technology for the purpose of producing goods or services. This means that the TTBER should not apply to agreements whose purpose is the mere reproduction and distribution of software copyright protected products. Such agreements are more akin to distribution agreements and therefore may the Vertical Agreements Block Exemption Regulation may apply.
6. The Commission specifies that the TTBER will only apply if the Research and Development Block Exemption Regulation or the Specialisation Block Exemption Regulation does not apply.
7. The new TTBER will clarify that, in addition to applying to technology transfer agreements for the purposes of producing contract products by the licensee, it also applies to subcontracting agreements for the production of contract products by the licensee’s sub-contractors.
8. The TTBER proposes a new test for determining whether certain provisions (concerning purchases of material or equipment from a licensor or the use of the licensor’s trademark) which are additional to the main technology transfer agreement fall under the TTBER. The determining factor is now whether the provisions are "directly and exclusively related" to what the licensee produces with the licensed technology. As a result, provisions will be exempted under the TTBER even if the input purchased from the licensor is of greater value than the licensed technology.
Scope of the TTBER: revised definitions
9. A new definition of “technology” is proposed which replaces references to numerous different licences at various points in the current TTBER (see for example the old definition of “reciprocal and non-reciprocal agreement”);
10. The Commission also proposes a broader definition of “technology transfer agreement” which is described as a “technology licensing agreement” including any “agreement containing provisions which relate to the purchase of products by the licensee or which relate to the licensing or assignment of other IPRs or know-how to the licensee provided those provisions are directly and exclusively related to the production of the contract products” In the current TTBER, the provisions must not “constitute the primary object of the agreement and [must be] … directly related to the production of the contract products”. The change in wording means that it is no longer necessary to be assured that the ancillary purchases or IPR assignments are of lesser value than or constitute the ‘primary object’ of the contract.
11. The Commission proposes to include new definitions of a) “relevant market”(product and geographic market) b) “relevant product market” (the contract products and its substitutes; c) “relevant geographic market” (the geographic area where the relevant undertakings are involved in the supply and demand of the licensed technology); and d) “relevant technology market” (licensed technology and its substitutes)”
12. The definition of “competing undertakings on the relevant market where the technology is licensed” has been changed and extended a) to reflect the new definitions of the relevant market and b) to include competitors who license out competing technologies without infringing each other’s IPRs as well as those who misappropriate each other’s know-how.
13. Similarly the new definition of “competing undertakings on the relevant marketwhere the contract products are sold” is extended to cover both actual and potential competitors. These are undertakings who in the absence of the technology transfer agreement are both active on the relevant market(s) on which the contract products are sold without infringing each other’s IPRs (actual competitors) or who would not just as a mere theoretical possibility in response to a small but permanent increase in price be likely to enter the market within a short period of time (potential competitors).
14. The definition of a selective distribution system is extended. It is now defined as a distribution system where the licensor undertakes to license the production of the contract products either directly or indirectly only to licensees selected on the basis of specified criteria an where these licensees undertake not to sell the contract products to unauthorised distributors within the territory reserved by the licensor to operate that system (changes in italics).
15. A new definition of exclusive licence will be introduced. It is proposed that an exclusive licence will mean that the licensee is “the only one permitted to produce on the basis of the licensed technology, in general or for a particular use or in a particular territory.”
16. The definition of “exclusive territory” will be clarified to mean the territory in which an undertaking is allowed to sell contract products, not just produce them.
Market Share thresholds
17. While the 20% and 30% market share thresholds for competing and non-competing undertakings respectively will remain the same, the TTBER will also cover situations where the licensor and the licensee are not competing undertakings but the licensee owns a competing technology which it uses for in-house production and which is substitutable for the licensed technology. In this case the parties will benefit from the block exemption where neither of them exceed a 20% market share threshold. This amendment is designed to address the risk that a licensee could foreclose competition to the downstream market by entering into an exclusive licence with the only company licensing the technology while still benefitting from the higher 30% market share for non-competitors.
18. The TTBER will be clarified to explain that market shares of the licensor should be calculated on the basis of “sales data of the contract products produced by the licensor and its licensees combined.”
19. The hard-core restrictions for competing undertakings have remained unchanged.
20. The Commission proposes to remove one of the exceptions to the list of hard core restrictions for non-competing undertakings. As a result non-competitors will no longer be able to restrict passive sales into an exclusive territory or exclusive customer group allocated by the licensor to another licensee for the first two years that this other licensee is selling the contract products in that territory or to that customer group. The only exception to this will be where such restrictions are objectively necessary for the licensee to penetrate a new market. This amendment is intended to bring the TTBER in line with the Vertical Agreements Block Exemption Regulation.
21. Under the current Article 4(3) of the current TTBER, where non-competing undertakings become competing undertakings the list of hard-core restrictions applicable to non-competing undertakings continues to apply during the life of the agreement unless there is a ‘material amendment’ to the agreement between the parties. Such an ‘amendment’ will now explicitly include the conclusion of a new technology transfer agreement between the parties in relation to the competing technologies which can be used for the production of products competing with the contract products.
22. The Commission proposes to remove the concept of “severable improvement” currently in Articles 5(1)(a) and (b) of the TTBER such that all exclusive grant-backs will now fall outside the TTBER and require individual assessment. The proposed new wording is as follows: “any direct or indirect obligation on the licensee to grant an exclusive licence or to assign rights, in whole or in part, to the licensor or to a third party designated by the licensor in respect of its own improvements to or its own applications of the licensed technology” will be an excluded restriction. This means that the offending clause can be red-lined from the remainder of the agreement without making the whole agreement fall outside the TTBER.
23. The prohibition on any direct or indirect obligation on the licensee not to challenge the validity of the IPRs held by the licensor in the EU will remain under the proposed new TTBER, however, whereas until now, the licensor was able to provide for the termination of technology transfer agreement where the licensee challenges the validity of the IPRs, this will no longer be a permissible exception.
24. The deadline for submitting comments on the draft TTBER is 17 May 2013. The current block exemption will expire on 30 April 2014.
25. The proposed TTBER would enter into force on 1 May 2014 with a one year transitional period to 30 April 2015. During this time agreements already in force on 30 April 2014 will be covered by the current TTBER if they satisfy the conditions of that TTBER.
For more information, please contact Elisabetta Rotondo or Rachel Iley.
 This definition includes know-how and the following rights or combinations of rights including the applications or applications for registration: patents, utility models, design rights, topographies of semiconductor products; supplementary protection certificates for medicinal products or other products for which such protection may be obtained, plant breeder’s certificates and software copyright.
 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004R0772:EN:NOT Article 1(1) (b) current TTBER. See also para 49 TTBER Guidelines. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2004:101:0002:0042:EN:PDF