UK competition regulator issues final guidance on licensing patents, software and databases

Britain's competition regulator has published its final guidance on how competition law treats licensing deals for technology, from patents and software to databases. The Competition and Markets Authority (CMA) released the guidance and an accompanying overview on November 10, closing a case it opened in July 2024. The guidance explains the Competition Act 1998 (Technology Transfer Agreements Block Exemption) Order 2026, which took effect on May 1, and states that it replaces the European Commission's 2014 guidelines on technology transfer agreements.

The Competition Act's Chapter I prohibition bans agreements between businesses that restrict competition in the UK, unless they bring enough benefits to qualify for an exemption. A block exemption gives a whole category of agreements an automatic safe harbor if they meet its conditions. After Brexit, the EU's 2014 regulation for technology transfer stayed in UK law as an “assimilated” block exemption until it expired on April 30, 2026. The CMA recommended in September 2025 that a UK order replace it, and the government made the order on March 25, 2026, giving effect to the recommendation with what it called some minor modifications. The order runs until the end of 2038.

What the safe harbor covers

As the CMA defines it, a technology transfer agreement is one in which a licensor allows a licensee to use technology rights to make goods or provide services. The order lists those rights: patents, know-how, design rights, semiconductor topography rights, supplementary protection certificates, plant breeders' rights, copyright in software, and copyright in a database and database right. It applies only to agreements between two parties; technology pools are dealt with separately in the guidance.

Where data fits

The guidance is explicit that the order does not cover the licensing of data as such. Data is included only where it falls within the order's definitions, which take in copyright in a database and database right, or where it counts as know-how. For other data licenses, the CMA says it will decide case by case whether to apply the order's principles, which it says may not suit every such agreement because data differ in their characteristics, the rules that apply to them and how they are collected or generated. The principles will generally be appropriate, it adds, where licensing data is directly tied to producing or selling products. A footnote points to the CMA's 2025 recommendation for its reasons for extending the order's scope.

The regulator also draws a line on information sharing. If competitors use a data license as cover for swapping competitively sensitive information in order to restrict competition, the CMA says it will not assess the deal using the guidance's principles.

Clauses that lose the exemption

For licensing deals between competitors, the overview lists price fixing, output limits, dividing territories or customers, and restrictions on a party's own technology or research as hardcore restrictions, with some exceptions. Between non-competitors, setting fixed or minimum resale prices, many restrictions on passive sales and certain limits within selective distribution networks fall in the same category. Exclusive grant-backs, which make a licensee hand over or exclusively license its improvements, and clauses barring a party from challenging the other's intellectual property are excluded restrictions, though a licensor may keep the right to end an exclusive license if the licensee mounts a challenge.

An agreement outside the safe harbor is not necessarily unlawful, the CMA says, but needs an individual assessment. If the Chapter I prohibition is infringed, the agreement or its restrictions may be void and unenforceable, the CMA can impose significant fines, and affected parties can sue for damages. The CMA's overview says it will usually be necessary to seek legal advice on how the order applies to a given agreement.

The CMA says it will keep the order's application under review and may revise the guidance. The order itself requires the government to review it and publish a first report within five years of May 1, 2026.