The Group Exemption on patent licensing Issued by the European Commission in 1983 (see our Information Letter N.S. 159) is due to expire on December 31, 1994.

The Commission is working on a draft to replace it. This is not yet finalized. The outlines are, however, becoming clear. It seems likely that there will be a single group exemption covering both patent and know-how licenses and that this will continue to exclude simple trademark and computer software licenses because the Commission still has insufficient experience in dealing with them. At one point there were rumors that the applicable provisions might depend upon the market share enjoyed by the parties and that restrictions on the freedom of small and medium sized companies to conclude license agreements would be minimized. It appears, however, that the Commission may now acknowledge the difficulty for a small company to determine its market share with any degree of accuracy and the resulting uncertainties that would not be welcomed by the intended beneficiaries. It thus seems likely that the new exemption will follow the format of the two exemptions that it will replace, although there are signs that the black list provisions may be somewhat watered down.

June 1994 Index