GENERAL PREAMBLE OF THE BLOCK EXEMPTION COMMUNIQUÉ
RELATING TO TECHNOLOGY TRANSFER AGREEMENTS1
Technology transfer agreements which involve intellectual property rights —
referring to patents, utility models, industrial designs, integrated circuit topographies,
plant breeders’ rights or software rights — and know-how, may bring about various
economic efficiencies such as encouraging research and development activities,
preventing waste of resources through duplication of research and developments,
facilitating the dissemination of the knowledge and technology resulting from the
aforementioned research and development activities, increasing competition by new
and higher quality products brought to market. In addition to the aforementioned
economic efficiencies, as intellectual property rights bestow monopolistic powers to
their holders, technology transfer agreements involving such rights, considering also
certain other provisions they contain, may lead to the restriction of competition to a
certain extent; therefore the said agreements may result in being dealt with under
competition law.
Technology transfer agreements whereby the above mentioned intellectual
property rights are licensed are basically regulated within the framework of the
legislation relating to those rights. The said legislation allows for provisions, such as
granting of exclusive licenses, which may be restrictive of competition under certain
circumstances, to be included in technology transfer agreements. In this context,
considering the existence of legal arrangements for intellectual property rights, which
are within the scope of the said agreements, and the powers bestowed by these
arrangements to the right holders, the interface between such powers and
competition law regulations must be specified. This Communiqué provides for the
conditions whereby the provisions, contained in technology transfer agreements,
which are restrictive of competition under Article 4 of the Act on the Protection of
Competition No. 4054, are granted exemption when they are accepted to satisfy the
requirements under Article 5 of the Act No. 4054.
1 This part relating to general preamble has not been published on the Official Gazette.
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In determining whether technology transfer agreements which are restrictive of
competition satisfy the requirements of exemption, the power, held especially by
those undertakings which are party to such agreements, within the relevant product
and technology market, must be taken into account. In other words, the existence of
substitutable technologies and substitutable products at the disposal of the
competitors of the aforementioned undertakings gains importance.
In the assessment of technology transfer agreements, paying attention to the
distinction whether the agreement is between competitors or not is quite important. It
is less likely for technology transfer agreements between non-competitors to affect
competition adversely than those that are between competitors. Therefore rules to be
applied to technology transfer agreements between competitors and between non-
competitors, and especially factors such as market share thresholds and limitations
which would exclude the agreement from the coverage of block exemption needed to
be differentiated.
Where the market shares of the undertakings which are party to technology
transfer agreements exceed the market share thresholds set forth under this
Communiqué, a detailed examination needs to be made so that it can be determined
whether the said agreements are caught by Article 4 of the Act No. 4054 and whether
they satisfy the requirements of exemption under Article 5. In making this
assessment, all of the legal and economic factors related to the agreements,
particularly the structure of the relevant technology and product market must be
taken into account.
This Communiqué aims at the protection of competition within the market and
provision of legal certainty to undertakings. To that end, the Communiqué gives the
general conditions of block exemption for technology transfer agreements and
enumerates the provisions which would prevent the said agreements from qualifying
for the block exemption. In addition to these, rather than the approach whereby an
agreement is excluded from the scope of the block exemption as a whole in relation
to certain obligations, it would be appropriate to adopt the practice whereby the
relevant obligations only are disqualified from block exemption and thus the
agreements containing these continue to qualify for the block exemption. Whereas
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the existence of issues such as market share thresholds, obligations which leave the
agreement out of the scope of the block exemption and obligations which are unable
to qualify for block exemption is generally sufficient to protect competition within the
market, the exemption will be withdrawn where it is established that an agreement or
networks of agreements which qualified for exemption under this Communiqué still
do not satisfy the requirements under Article 5 of the Act No. 4054.
Although this Communiqué covers only those technology transfer agreements
between a licensor and a licensee, the provisions not constituting the main purpose
of the agreement however directly relating to the implementation of the technology
concerned by the agreement, which are contained in these agreements, shall also be
covered by the exemption. This Communiqué shall also apply where technology
transfer agreements cover issues related to more than one level of trade such as the
obligations the licensee must impose on resellers, for example in relation to setting
up of a certain distribution system. However, in such a case, such obligations need to
be in conformity with the relevant Competition Board regulations. This Communiqué
shall not apply to supply and distribution agreements between licensee and their
buyers.
Among the other agreements to which the Communiqué shall not apply are
also the license agreements made through pooling of technologies in order to grant
license to third parties as a package. License agreements drawn up for the purpose
of having an undertaking carry out research and development activities shall not be
dealt with under this Communiqué either.
In consideration of the explanations given above, the Competition Board
decided that this Communiqué be published.
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BLOCK EXEMPTION COMMUNIQUÉ ON TECHNOLOGY TRANSFER AGREEMENTS
(Communiqué No: 2008/2)
Purpose
ARTICLE 1 – (1) The purpose of this Communiqué is to determine the conditions for granting block exemption to technology transfer agreements from the
application of the provisions of Article 4 of the Act No. 4054 dated 07.12.1994 on the
Protection of Competition.
Scope
ARTICLE 2 – (1) This Communiqué shall apply to technology transfer agreements in which the licensor authorizes the licensee to use the licensed
technology for the production of contract products and which fall under the scope of
Article 4 of the Act No. 4054.
Basis
ARTICLE 3 – (1) This Communiqué has been prepared depending on Article 4 and 5 and subparagraph (f) of Article 27 of the Act No. 4054.
Definitions
ARTICLE 4 – (1) For the purposes of this Communiqué the following definitions shall apply:
a) Technology transfer agreement means an agreement in which the relevant intellectual property rights and know how are licensed individually or mixedly.
Agreements containing provisions which relate to the sale and purchase of
products or which relate to the licensing or assignment of other intellectual
property rights shall be regarded to fall under this definition, provided that
those conditions do not constitute the primary object of the agreement and are
directly related to the production of the contract products.
b) Product means all products or services including intermediary goods and services.
c) Contract products means products produced with the licensed technology.
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d) Intellectual property rights means a patent, utility model, industrial design, integrated circuit topography, plant breeder’s right and related applications and
software rights.
e) Know-how means a confidential, substantial and identified package of knowledge resulting from experience and testing.
In this definition
1) Confidential means that know-how is not generally known or easily accessible as a whole or when pieced together or combined,
2) Substantial means that know-how is significant and useful for the production of the contract products,
3) Identified means that know-how is described in a sufficiently comprehensive and detailed manner so as to verify that it satisfies the
conditions for confidentiality and substantiality.
f) Competing undertakings (competitors) means undertakings which compete on the relevant technology and/or the relevant product market. In this context:
1) Competing undertakings on the relevant technology market are
undertakings which grant licenses related to competing technologies
(actual competitors on the technology market). The relevant technology
market covers technologies which are regarded by the licensees as
interchangeable with or substitutable for the licensed technology, in
respect of the technologies' characteristics, their license fees and their
intended use,
2) Competing undertakings on the relevant product market means
undertakings which, at the time of the conclusion of the technology
transfer agreement,
1. are already active on both the relevant product market and the
relevant geographic market (actual competitors on the relevant market)
or
2. would, from a realistic point of view, undertake the necessary
additional investments or necessary switching costs in order to timely
enter the relevant product market or the relevant geographic market in
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response to a small but significant increase in relative prices ( potential
competitors on the relevant market).
g) Selective distribution system means a distribution system where the licensor licenses the production of the contract products only to licensees
selected on the basis of specific criteria and where these licensees undertake
not to sell the contract products to unauthorized distributors.
h) Exclusive territory means a territory in which only one undertaking is allowed to produce and sell the contract products with the licensed technology. On the
other hand, the fact that a license is given to another person for the production
of contract products within the related territory in order to create an alternative
source of supply for a specific customer does not prejudice the exclusivity
nature of that territory.
i) Exclusive customer group means a group of customers to which only one undertaking is allowed to actively sell the contract products produced with the
licensed technology.
j) Severable improvement means an improvement that can be used without infringing the right on the licensed technology.
(2) The terms ‘undertaking’, ‘licensor’ and licensee shall include their connected undertakings.
(3) Connected undertakings means
(a) undertakings in which a party to the agreement, directly or indirectly:
1) has the power to exercise more than half the voting rights, or
2) has the power to appoint more than half the members of the
supervisory board, board of management or bodies legally representing the
undertaking, or
3) has the right to manage the undertaking's affairs;
(b) undertakings which directly or indirectly have, over a party to the
agreement, the rights or powers listed in (a);
(c) undertakings in which an undertaking referred to in (b) has, directly or
indirectly, the rights or powers listed in (a);
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(d) undertakings in which a party to the agreement together with one or more
of the undertakings referred to in (a), (b) or (c), or in which two or more of the
latter undertakings, jointly have the rights or powers listed in (a);
(e) undertakings in which the rights or the powers listed in (a) are jointly held
by:
1) parties to the agreement or their respective connected undertakings
referred to in (a) to (d), or
2) one or more of the parties to the agreement or one or more of their
connected undertakings referred to in (a) to (d) and one or more third parties.
General Conditions for Exemption
ARTICLE 5 – (1) The exemption granted by this Communiqué shall apply to technology transfer agreements which are entered between a licensor and a licensee
and which relate to the production of contract products. The exemption shall continue
to apply for as long as the protection granted to the intellectual property right
regarding the licensed technology is valid and in case of know-how, as long as the
know-how remains secret. In cases where the know-how becomes publicly known
because of the licensee, it shall continue to apply for during the term of the
agreement.
(2) Where the undertakings party to the agreement are competitors, the
exemption provided for in this Communiqué shall apply on condition that the total
market share of the parties does not exceed 30 % on the affected relevant
technology and product market.
(3) Where the undertakings party to the agreement are not competitors, the
exemption provided for in this Communiqué shall apply on condition that the total
market share of the parties does not exceed 40 % on the affected relevant
technology and product market.
(4) In terms of paragraphs 1 and 2, the market share on the relevant
technology market is defined depending on the presence of the licensed technology
on the relevant product market. The market share of the licensor on the relevant
technology market shall be the total market share of the contract products produced
by the licensor and the licensees on the relevant product market.
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Restrictions that render technology transfer agreements out of the scope of the block exemption
ARTICLE 6 – (1) Where a technology transfer agreement includes any of the restrictions laid down in this Article, the agreement shall not benefit from the block
exemption as a whole.
(2) Where undertakings party to the agreement are competitors, the exemption
provided for in this Communiqué shall not apply to the agreements which directly or
indirectly, individually or in combination with other factors that are under the control of
the parties have as their object:
a) The restriction of a party’s right to determine its sales prices.
b) The restriction of production and sales volumes of contract products.
c) The allocation of markets and customers except the following cases:
1) The obligation on the licensor and/or the licensee to or not to produce with
the licensed technology on one or more technical fields of use or product
markets or territories.
2) The obligation on the licensor not to give a license to a third party and not to
use the subject of the license on a particular territory.
3) The restriction of the active sales by the licensor and/or the licensee into the
territory or the customer group reserved for the other party. However, the
parties cannot be restricted directly or indirectly from making sales to third
parties which are present in their territories and which make sales into the
other territories or customer groups within the country.
4) The restriction of active sales by the licensee into a territory or a customer
group allocated by the licensor to another licensee. However, the parties
cannot be restricted directly or indirectly from making sales to third parties
which are present in their territories and which make sales into the other
territories or customer groups within the country.
5) The obligation on the licensee to produce the contract products only for its
own use. However the licensee shall not be restricted from actively or
passively selling the contract products as spare parts for its own products.
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6) The obligation on the licensee to produce the contract products for a
specific customer provided that the license is given in order to create an
alternative source of supply for that customer.
d) The restriction of a licensee’s right to use its own technology or the restriction of a
party’s right to carry out research and development activities unless such restriction
is necessary in order to prevent the disclosure of the licensed know-how to third
parties.
(3) Where undertakings party to the agreement are not competitors, the
exemption provided for in this Communiqué shall not apply to the agreements which
directly or indirectly, individually or in combination with other factors that are under
the control of the parties have as their object:
a) Restriction of a party’s right to determine its sales prices. On the other hand, it is
possible to determine the maximum sales price or recommend a sales price provided
that it does not develop into a fixed or minimum sales price as a result of pressure or
incentive from any of the parties.
b) The restriction of the territory into which, or of the customers to whom, the licensee
may passively sell the contract products, except the following cases:
1) The restriction of passive sales into an exclusive territory or to an exclusive
customer group reserved for the licensor.
2) The restriction of passive sales into an exclusive territory or to an exclusive
customer group allocated to another licensee during the first two years that
this other person is selling the contract products in that territory or to that
customer group.
3) The obligation on the licensee to produce the contract products for only its
own use. However, the licensee shall not be restricted from actively or
passively selling the contract products as spare parts for its own products.
4) The obligation on the licensee to produce the contract products for a
particular customer provided that the license is given in order to create an
alternative source of supply for that customer.
5) The restriction of active sales to end users by a licensee carrying out
activities at the wholesale level.
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6) The restriction of sales by members of a selective distribution system to
unauthorized distributors.
c) Restriction of active or passive sales to end users by a licensee carrying out
activities at the retail level without prejudice to the right to prohibit a member of a
selective distribution system from carrying out activities at an unauthorized place.
(4) Where undertakings party to the agreement are not competitors at the time
of the conclusion of the agreement but become competitors afterwards, paragraph 3
and not paragraph 2 shall apply during the term of the agreement. However, in order
for paragraph 3 to apply, the agreement shall not be substantially amended.
Restrictions that cannot benefit from the block exemption
ARTICLE 7 – (1) Where a technology transfer agreement contains any of the restrictions laid down in this article and the related restriction is separable from the
rest of the agreement, only that restriction shall not benefit from and the rest of the
agreement shall continue to be covered by the block exemption. Where any of the
restrictions laid down in this article cannot be separated from the rest of the
agreement, the whole agreement shall not benefit from the block exemption.
(2) The exemption provided for in this Communiqué shall not apply to the
following restrictions:
a) Any direct or indirect obligation on the licensee to grant an exclusive license to the
licensor or a third party designated by the licensor in respect of its own severable
improvements on or new applications of the licensed technology,
b) Any direct or indirect obligation on the licensee to assign, partly or completely, to
the licensor or a third party designated by the licensor the rights related to its own
severable improvements on or new applications of the licensed technology,
c) The obligation on the licensee not to challenge the validity of the related
intellectual property rights that the licensor owns in Turkey. However, the right of the
licensor to terminate the technology transfer agreement in case the licensee
challenges the validity of one or more of the related licensed intellectual property
rights is reserved.
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(3) Where undertakings party to the agreement are not competitors the
exemption provided for in this Communiqué shall not apply for any obligation which
directly or indirectly:
a) restricts the licensee’s right to use its own technology
b) restricts research and development activities of any of the parties to the agreement
unless it is necessary to prevent the disclosure of the licensed know-how to third
parties.
Withdrawal of the block exemption
ARTICLE 8 – (1) The Competition Board may withdraw the exemption provided for in this Communiqué, according to Article 13 of the Act No. 4054, in
cases where the Board finds that a technology transfer agreement covered by the
exemption provided for in this Communiqué has effects incompatible with Article 5 of
the Act No. 4054 and especially that entry of third parties’ technologies to the market
is restricted for instance because of the cumulative effects created by a network of
agreements containing similar restrictions that prohibit licensees from using third
parties’ technologies. The Competition Board shall request written or oral opinions
from parties before giving its final decision on withdrawal of exemption.
(2) Where parallel networks created by similar technology transfer agreements
cover more than 50 % of the relevant market, the Competition Board may, by a
communiqué which it shall further issue, render agreements containing particular
restrictions out of the scope the exemption provided for in this Communiqué. In this
case, the concerned parties shall be given sufficient time starting from the publication
date of such communiqué to fulfill its demands before it enters into force.
Application of the market share threshold
ARTICLE 9 – (1) The market shares provided for in this Communiqué shall be calculated on the basis of market sales value. If market sales value data are not
available, estimates based on other reliable market data including market sales
volumes may be used in order to calculate the market share of the undertaking
concerned.
(2) The market shares shall be calculated on the basis of data of the year
previous to that of evaluation.
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(3) The market share belonging to the undertakings referred to in
subparagraph (d) of Article 1(3) on definitions shall be equally portioned to the
undertakings holding the rights and powers listed in subparagraph (a).
(4) If the market share is initially under the cover of the block exemption but
subsequently passes the threshold provided for in this Communiqué, the exemption
shall continue to apply until the end of the second year following the year in which the
threshold is first exceeded.
Application of the Communiqué to concerted practices and decisions of association of undertakings
ARTICLE 10 – (1) The provisions of this Communiqué shall apply to concerted practices between undertakings and decisions of association of undertakings to the
extend that it is appropriate.
Application of Article 6 of the Act
ARTICLE 11 – (1) The exemption granted according to the provisions of this Communiqué is without prejudice to the application of Article 6 of the Act No. 4054.
Entry into Force
ARTICLE 12 – (1) This Communiqué shall enter into force on the date it is published.
Execution
ARTICLE 13 – (1) The provisions of this Communiqué shall be executed by the President of the Competition Authority.