UK CMA Guidance on Technology Transfer Block Exemption

The Competition and Markets Authority (CMA) published on 10 November 128-page guidance on technology transfer agreements and competition law, with an accompanying overview, explaining how the Technology Transfer Block Exemption Order 2026 (TTBEO) applies. The order took effect on 1 May 2026, replacing the assimilated EU-based exemption that expired on 30 April, and runs until 31 December 2038. Licences of patents, design rights, software, database rights and know-how used to make goods or provide services can fall within it; agreements with more than two parties and technology pools do not.

Market shares first

Competitors must not exceed a combined 20% share of the relevant product and technology markets; for non-competitors, each party must stay within 30%. Product and technology markets are assessed separately, and licensed technology with no sales in the previous year counts as 0%. Where a threshold is met at first and exceeded later, a 3-year grace period runs from the end of the year it was first exceeded. If technology market shares are hard to measure, the exemption can still apply where at least 3 independently controlled technologies that users see as interchangeable exist besides the licensed one.

Clauses that remove the exemption for the whole agreement

Between competitors: price fixing, output limits (with limited exceptions), market or customer allocation, restrictions on the licensee using its own technology, and restrictions on either party's own R&D unless needed to protect confidential know-how from disclosure to third parties. Between non-competitors: fixed or minimum resale prices, most passive sales restrictions, and stopping retail members of a selective distribution network from selling to end users. Any such hardcore restriction takes the whole agreement outside the exemption.

Three types of clause assessed separately

• Exclusive grant-backs: requiring the licensee to transfer ownership of improvements, or grant an exclusive licence over them, to the licensor; non-exclusive grant-backs can be exempt.
• No-challenge clauses: preventing a party from challenging the validity of the other's IP rights. The exception is that, in an exclusive licence, the licensor may terminate if the licensee brings a validity challenge.
• Between non-competitors, limits on the licensee using its own technology or on either party's R&D, unless needed to stop licensed know-how reaching third parties. These clauses are not exempt themselves, but the rest of the agreement can remain exempt if they can be separated from it.

Transition for older agreements

Agreements exempt under the old rules immediately before 1 May 2026 that would not meet the TTBEO conditions are treated as exempt until 30 April 2027; obligations that were already excluded restrictions are not covered.

J&C recommends: anyone licensing patents, software or know-how to a UK business, or taking such a licence in the UK, can check each agreement against the guidance roadmap: whether the parties are competitors, whether either market share threshold is exceeded and whether there is a hardcore restriction. Review grant-back, no-challenge and R&D clauses separately and keep grant-backs non-exclusive where possible. Agreements signed before 1 May 2026 that relied on the old exemption should be checked against the new conditions before 30 April 2027, raising any changes early.

Source: assets.publishing.service.gov.uk | www.gov.uk