EU & UK technology licensing rules: What's changing from May 2026

On 16 April 2026, the European Commission adopted the revised Technology Transfer Block Exemption Regulation (TTBER) and accompanying Technology Transfer Guidelines. The new rules came into force on 1 May 2026 and apply until 30 April 2038. 

The UK equivalent (the Technology Transfer Agreements Block Exemption Order (TTBEO)) came into force on the same day. The UK Competition and Markets Authority (CMA) is currently consulting on draft guidance (UK Draft Guidance). 

Both regimes have a one year transitional period (ending on 30 April 2027) for existing agreements which comply with the previous rules. However, new agreements entered into from 1 May 2026 must comply with the new rules. 

What you need to know

• Under the TTBER, a licensor authorises a licensee to use technology rights (such as patents, design rights, software copyrights, know-how, and other technology rights) for the production of goods and services.
• The European Commission has introduced several key changes: refined market share calculation rules for technology markets, dedicated guidance on data licensing (of particular interest to data providers), stricter conditions for technology pool safe harbours, and a new analytical framework for licensing negotiation groups (LNGs). However, the European Commission did not ultimately adopt the formal LNG safe harbour it had initially proposed.
• Regulatory frameworks are diverging: the UK now operates a standalone block exemption with structurally different safe harbour criteria. Businesses with cross-border licensing portfolios need tailored compliance strategies for each jurisdiction.

What you need to do

• Review your existing technology transfer agreements for compliance with the revised TTBER and TTBEO. A one-year transitional period covers agreements already in force on 30 April 2026 that complied with the outgoing Regulation (EU) 316/2014. Agreements that do not satisfy the new conditions by 30 April 2027 will lose the benefit of the block exemption.
• Assess data licensing agreements in light of the revised TTBER and Guidelines, particularly where licensed data involves databases protected by copyright or the database sui generis right.
• For businesses operating across the EU and UK, monitor divergences between the two regimes and build contractual flexibility to accommodate differing requirements.

On 16 April 2026, the European Commission adopted the revised TTBER and accompanying Technology Transfer Guidelines (EU Guidelines). The revised TTBER replaces Regulation (EU) 316/2014 and came into force on 1 May 2026. The new rules apply until 30 April 2038.

The revised TTBER and EU Guidelines are the result of a comprehensive four-year review. Beginning in November 2022, the European Commission evaluated the framework that has been in place since 2014 (2014 framework) through public consultation, stakeholder workshops, and expert studies on data licensing. The final revised TTBER and EU Guidelines reflect the evidence and feedback the European Commission gathered throughout this process.

Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits agreements between undertakings that restrict competition. The TTBER creates a "block exemption" (a regulatory safe harbour that automatically exempts qualifying technology transfer agreements from this prohibition, provided they meet certain conditions). Under a technology transfer agreement, a licensor authorises a licensee to use specified technology rights (including patents, design rights, software copyrights, know-how, and other technology rights) to produce goods and services. The EU Guidelines explain how to interpret the TTBER and how to assess technology transfer agreements that fall outside the block exemption under Article 101 TFEU.

The block exemption applies to agreements between competitors where their combined market share does not exceed 20%, and to agreements between non-competitors where each party's market share does not exceed 30%. To address the practical difficulties of applying these thresholds in technology markets, the revised TTBER introduces several clarifications on calculating market shares:

• New technologies start at zero: the TTBER now clarifies that technologies that have not yet generated sales of contract products hold a market share of zero. This means newly developed technologies that parties have not yet commercialised automatically fall within the thresholds, providing legal certainty for early-stage licensing. 
• Extended grace period: where parties' combined market shares rise above the relevant threshold after they enter into an agreement, the block exemption does not immediately fall away. Under the revised TTBER, the exemption remains in effect for a transitional period of three consecutive calendar years, calculated from the end of the year in which parties first exceeded the threshold. This is a longer grace period than under the previous version of the TTBER and offers parties greater flexibility where market conditions shift, particularly in dynamic sectors where the introduction of new technologies can cause market shares to fluctuate. 
• Footprint methodology clarified: the revised TTBER provides additional detail on how to calculate market shares in technology markets. The calculation is based on the technology's "footprint" at the product level: the combined sales of all products incorporating the licensor's technology (whether the licensor itself or its licensees sell them) as a proportion of total sales of all competing products on the relevant market. Notably, this denominator includes products manufactured using in-house (unlicensed) technologies. The European Commission adopted this approach for practical reasons: royalty income data is often difficult to obtain and may understate a technology's true market position where cross-licensing or tied product arrangements reduce royalty payments. The footprint methodology nonetheless provides a workable proxy for a technology's actual competitive position, as the denominator includes all products competing on the relevant market – including those manufactured using in-house technologies – thereby reflecting not only actual competition but also the potential competitive constraint from firms that could enter the licensing market as alternative technology sources. 

While the UK TTBEO has retained the market share thresholds for technology markets from the assimilated TTBER, it has also introduced an alternative threshold based on competing technologies to address "practical challenges" in calculating market shares for the licensed technology rights. Agreements may benefit from the TTBEO where the below conditions are met: 

• Condition 1: the parties' combined market shares on any relevant market for the contract products must not exceed 20% (for competitors) or 30% (for non-competitors); and
• Condition 2: either (i) the parties' combined market share of any relevant market for the licensed technology rights does not exceed 20% (for competitors) or 30% (for non-competitors) OR (ii) there are three or more independently controlled competing technologies. 

Other changes to the TTBER

• Aligned sales definitions: the revised TTBER now includes definitions of "active sales" and "passive sales", aligned with the definitions in the Vertical Block Exemption Regulation (Regulation (EU) 2022/720) (see our March 2026 update), which governs supply and distribution agreements between undertakings operating at different levels of the production or distribution chain.

• Revised potential competitors test: the European Commission has revised the definition of potential competitors to reflect developments in the Court of Justice of the European Union's (ECJ) case law, in particular the Generics (UK), Lundbeck, Servier and EDP rulings. The assessment of potential competition must rest on consistent facts taking into account market structure, and requires "real and concrete possibilities" of market entry within a sufficiently short timeframe (normally no more than three years). 

The EU Guidelines now include a dedicated section on data licensing (Section 3.2.1.3), responding to the proliferation of data licensing arrangements that fell outside the 2014 framework. This guidance is particularly relevant for companies whose business models depend on licensed data (including companies active at the intersection of AI, data analytics, and digital platform) where data access often shapes competitive outcomes. Key points include:

• Existing technology rights: the revised TTBER does not cover the licensing of data as such. However, data licensing falls within the revised TTBER's scope where the licensed data constitutes one of the technology rights the regulation recognises; for example, where the data qualifies as production know-how. 
• Databases protected by copyright or sui generis rights: the European Commission will apply the principles of the revised TTBER and EU Guidelines when parties license databases that enjoy protection under either copyright laws or the sui generis database right under the Database Directive (Directive 96/9/EC). The sui generis right is a specific form of intellectual property protection that grants the maker of a database the right to prevent extraction or re-utilisation of a substantial part of its contents, irrespective of whether the database itself qualifies for copyright protection. For other types of data licensing that do not involve such protected databases, the European Commission requires a case-by-case assessment.
• Field of use restrictions in data licensing: consistent with the earlier guidelines, the EU Guidelines confirm that the TTBER covers field of use restrictions that limit a licensee's use of licensed technology to one or more technical fields of application, product markets or industrial sectors. Data licensors seeking to grant narrow use rights will need to ensure that such a clause is consistent with these requirements, and does not amount to a disguised customer or territorial restriction, which remain hardcore restrictions under Article 4(1)(c) and Article 4(2)(b) of the revised TTBER.
• Information exchange in database licensing: database licensing may involve the exchange of commercially sensitive information; either because the database itself contains such information, or because implementing the licensing agreement requires sharing commercially sensitive information not contained in the database. Where the licensing agreement itself does not fall within the Article 101(1) prohibition (because it has neutral or positive competitive effects), an ancillary information exchange also falls outside that prohibition, provided the exchange is objectively necessary to implement the agreement and is proportionate to its objectives. Where the exchange is not objectively necessary or proportionate (or where the exchange is itself the main object of the agreement) the European Commission will apply the Horizontal Guidelines on information exchange. In particular, an exchange restricts competition by object where it is capable of removing uncertainty regarding the timing, extent, and details of modifications to the parties' market conduct. In many cases, however, information exchange in database licensing does not restrict competition by object. Where it does not, the European Commission will assess whether the exchange has restrictive effects, considering factors such as the nature of the information, the characteristics of the exchange, market characteristics, and any measures the parties implement to reduce competition law risks.
• Data Act safe harbour and other Union legislation: the EU Guidelines operate without prejudice to the GDPR and other applicable Union data law; Article 101 continues to apply to the extent undertakings retain discretion on implementation. Where European Union legislation mandates data licensing, the European Commission will account for that obligation when applying the TTBER and EU Guidelines. Data-sharing agreements that Chapter II of the Data Act (Regulation (EU) 2023/2854) mandates will generally fall outside the Article 101(1) prohibition and/or satisfy Article 101(3), unless parties use them to disguise agreements that restrict competition by object (such as price fixing, customer allocation, or illicit exchanges of commercially sensitive information).

Technology pools: a tighter safe harbour

Technology pools are arrangements whereby, as the EU Guidelines describe, "two or more parties assemble a package of technology rights for licensing to pool contributors and/or third parties". Technology pools can generate efficiencies by reducing transaction costs and avoiding cumulative royalties, but they also raise competition concerns where they facilitate collusion or exclude competitors. The 2014 framework established a "soft safe harbour" – a set of conditions under which the creation, operation, and licensing-out of a pool generally falls outside the Article 101(1) TFEU prohibition, irrespective of the parties' market position. The EU Guidelines strengthen this safe harbour in two key respects:

• Transparency on pooled rights and essentiality: pools must now effectively disclose to potential and existing licensees (i) the individual rights included in the pool and (ii) the methodology they use to assess their essentiality. Effective disclosure of rights should include at least the patent number or application number and the country of registration. Effective disclosure of the essentiality methodology should include at least an explanation of the scope of essentiality checks, the content of those checks, and the criteria the pool uses to select the assessors. This responds to concerns the evaluation identified regarding insufficient specificity of previous safe harbour conditions. 
• No double dipping and FRAND licensing: the revised safe harbour requires pools to include provisions ensuring that licensees do not pay more than once for the same technology rights (known as "double dipping"). Double dipping occurs where a licensee pays royalties under both a bilateral licence with an individual right holder and a pool licence covering the same technology. In addition, the European Commission has clarified that the existing condition requiring pools to license out on FRAND (fair, reasonable and non-discriminatory) terms applies to the licences granted by the pool itself, meaning that FRAND obligations now clearly attach to both the terms on which technologies are contributed to the pool and the terms on which the pool licenses the technology package to third-party licensees. 

The EU Guidelines now provide guidance on licensing negotiation groups (LNGs): arrangements in which technology users band together to negotiate licence terms collectively, most commonly in the context of standard-essential patents (SEPs). Key features of the EU Guidelines include:

• Pro- and anti-competitive effects: the EU Guidelines describe the possible pro-competitive effects of LNGs (including reduced transaction costs and more balanced licensing negotiations) as well as the potential anti-competitive effects (including the exercise of excessive purchasing power and coordination in downstream markets). 
• Genuine LNGs vs buyer cartels: the EU Guidelines distinguish between genuine LNGs (which operate transparently, disclose their membership, and limit their activity to the negotiation of licensing terms) and buyer cartels. Genuine LNGs generally do not restrict competition by object. Both the European Commission and the German Federal Cartel Office have already issued comfort letters for the Automotive Licensing Negotiation Group, signalling enforcement tolerance where LNGs are carefully structured. 
• Market power thresholds: the EU Guidelines also provide a framework for assessing restrictive effects, centred on market power: the European Commission indicates that market power is unlikely to exist if the LNG members' combined share of demand on relevant technology markets does not exceed 15% and their combined share of supply on relevant downstream markets does not exceed 15%. Above these thresholds, a detailed effects assessment is required. 
• Practical risks: the EU Guidelines address specific risks such as coordinated delays during licensing negotiations (coordinated hold-outs) and the potential for LNGs to restrict third-party implementers' access to technologies. Businesses participating in or forming LNGs should review their operating rules against this framework.

Notably, the European Commission decided not to include a safe harbour for LNGs in the final EU Guidelines, despite having proposed one in the draft published for consultation in September 2025. The European Commission concluded that, given relatively limited enforcement experience with LNGs, a safe harbour risked either failing to address all possible competition concerns (under-enforcement) or being too prescriptive and deterring pro-competitive LNGs (over-enforcement). Instead, the European Commission incorporated the substance of the proposed safe harbour conditions into the final Guidelines as measures that LNGs can adopt to reduce the risk of infringing Article 101 TFEU but without the legal certainty that a formal safe harbour would provide.

Notably, the UK has taken a different approach and the UK Draft Guidance does not include any specific guidance on LNGs. The CMA's consultation document states that it is not aware of any LNGs currently operating in the UK and therefore considers it more appropriate to assess LNGs on a case-by-case basis. The CMA notes that it may revisit this approach if there is an increase in market practice or enforcement activity in relation to LNGs. 

Other changes to the EU Guidelines

• Settlement agreements and pay-for-delay: the EU Guidelines (Section 4.3) codify the ECJ's case law on "pay-for-delay" settlement agreements (Generics (UK), Lundbeck, Servier, Krka, Cephalon), clarifying that such arrangements restrict competition by object where the parties cannot explain the value transfers other than by reference to their commercial interest not to compete on the merits. 
• Competitors and non-competitors: the European Commission has updated the guidance on the distinction between competitors and non-competitors (Section 2.2.5) to reflect recent case law on potential competition and blocking positions.
• Withdrawal scenarios: the EU Guidelines (Section 3.6) include additional examples of scenarios that may merit withdrawal of the block exemption, such as the use of most-favoured-licensee clauses or supra-competitive royalties resulting from cumulative cross-licensing. 

While the EU and UK frameworks are broadly aligned, there are notable differences between the two regimes which are set out in the table below.