When research and development agreements between companies do not distort competition


In June 2023, the European Commission adopted new block exemption regulations for horizontal agreements between companies.

The legal framework

Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices affecting trade between EU Member States that may prevent, restrict or distort competition.

Article 101(3) recognises that some restrictive agreements may produce objective economic benefits that outweigh their negative effects in terms of distortion of competition, and allows those agreements to be exempted from these prohibitions.

Article 101(3) can be applied in individual cases or to categories of agreements and concerted practices by way of block exemption regulation.

Regulation (EU) 2023/1066

On 1 June 2023, the Commission Regulation (EU) 2023/1066 on the block exemption of certain categories of research and development agreements entered into force, replacing the previous Regulation 1217/2010.

The stated aim of the new Regulation is to facilitate research and development while effectively protecting competition (recital 4), based on the assumption that

  • cooperation in research and development is more likely to promote technical and economic progress if the parties cooperate and contribute complementary skills, goods or assets;
  • consumers generally benefit from an increase in the volume and efficiency of research and development by benefiting from the introduction of new or improved products, technologies or processes, from a more rapid introduction of such products, technologies or processes onto the market or from price reductions brought about by new or improved products, technologies or processes.

What are research and development agreements

Article 1(1)(1) defines 'research and development agreement' as any agreement relating to the conditions under which the parties carry out research and development and the ways in which the results of the research and development are to be exploited, where

"research and development" means the activity aimed at the acquisition of know-how relating to existing products, technologies or processes, the carrying out of theoretical analyses, systematic studies or experiments, including experimental production and the production of demonstration models, technical testing of products or processes, the establishment of the necessary facilities up to the level of demonstration models and the obtaining of intellectual property rights for the results.

Access to final results and intellectual property rights

The research and development agreement shall provide that

  • all parties have full access to the final results of the activities carried out for the purpose of further research and development and for their exploitation,
  • access must be granted as soon as the results are available,
  • and must include all resulting intellectual property rights and know-how.

Access to pre-existing know-how

The agreement must provide for each party to have access to any pre-existing know-how of the other parties if such know-how is indispensable for the exploitation of the results.

The advantage for the parties participating in the agreement, especially if they are small or medium-sized enterprises, is undeniable given the difficulty for such parties to meet the costs of research alone, which is an increasingly important factor in remaining competitive, especially in the market for high-tech products.