CMA issues final guidance on technology licensing deals under new UK block exemption

The Competition and Markets Authority issued final guidance on Tuesday explaining how competition law applies to technology transfer agreements, with a shorter overview for businesses new to the rules.

Technology transfer agreements are those in which one party authorises another to use industrial property rights, such as patents, design rights, software copyrights and know-how, to produce goods or services.

The guidance covers the Technology Transfer Block Exemption Order 2026, which came into force on 1 May 2026 and replaced the assimilated EU-derived regulation that expired on 30 April 2026.

A block exemption treats a whole category of agreements as exempt from the Chapter 1 prohibition in the Competition Act 1998, provided set conditions are met, so firms need not justify each deal separately.

The Department for Business and Trade said the order “essentially maintains the existing exemption regime” while making some limited changes to tailor the rules to the UK.

The CMA recommended on 30 September 2025 that the Secretary of State replace the old regulation with a UK order, and the Secretary of State gave effect to that with minor modifications.

Before that, the CMA ran a call for inputs from 26 July 2024 to 6 September 2024, then consulted on a proposed recommendation from 14 March 2025 to 11 April 2025.

That consultation drew 12 responses, nine of them non-confidential, and the department said the vast majority agreed the old regulation should be replaced by a UK order.

The CMA’s proposal was for an order lasting 12 years, with utility models removed from the definition of technology rights and database rights added.

It also proposed definitions of active and passive sales, and replacing market share thresholds for technology markets with a condition that at least three independently controlled substitutable technologies exist besides the parties’ own.

Under the earlier regime, the exemption applied where parties’ market shares were below 20% for competitors and 30% for agreements between non-competitors, according to the department.

The department said the grace period for agreements that later breach the market share conditions has been increased to three years from two.

The order itself says that where an agreement met the market share condition when it was signed but later ceases to, the exemption is cancelled only from the end of three consecutive calendar years after the breach year.

The department said the impact on business is limited relative to renewing the exemption unchanged, and that a statutory review clause is included in the order.

The CMA’s review was set up to test whether the old regulation still met its purpose and served the interests of UK businesses and consumers.

The order also lets the CMA require information from a party claiming the exemption and cancel the exemption for an agreement by written notice in set circumstances.

Breach of the market share or hardcore restriction conditions cancels the block exemption for the agreement concerned, the order states.