The Competition Act 1998 (Research and Development Agreements Block Exemption) Order 2022

Hardcore restrictions U.K.

10.—(1) The R&D agreement must not, directly or indirectly, in isolation or in combination with other factors under the control of any of the parties to the agreement, have as its object—

(a) the restriction of the freedom of a party to the agreement to carry out research and development independently or in cooperation with third parties—

(i) in a field unconnected with a field to which the R&D agreement relates, or

(ii) in a field to which the R&D agreement relates or in a connected field, after the completion of the joint research and development or paid-for research and development;

(b) the limitation of output or sales, subject to the exceptions set out in paragraph (2);

(c) the fixing of prices when selling a contract product or licensing a contract technology to third parties, subject to the exceptions set out in paragraph (3);

(d) the restriction of the geographical area in which, or of the customers to whom, the parties may make passive sales of a contract product or license a contract technology, subject to the exception set out in paragraph (4);

(e) the imposition of a requirement not to make any, or to limit, active sales of a contract product or contract technology in particular geographical areas or to customers which have not been exclusively allocated to one of the parties by way of specialisation relating to exploitation;

(f) the imposition of a requirement that a party to the agreement refuse to meet demand for a contract product from customers in a geographical area allocated to another party to the agreement, or from customers otherwise allocated to one or more of the parties to the agreement by way of specialisation relating to exploitation, if those customers would market the contract product concerned in another geographical area within the United Kingdom;

(g) the imposition of a requirement to make it difficult for users or resellers to obtain a contract product from other resellers within the United Kingdom.

(2) An R&D agreement which provides for joint exploitation of the results does not breach the condition in paragraph(1)(b) by—

(a) setting production targets, where the joint exploitation of the results includes the joint production of a contract product;

(b) setting sales targets, where the joint exploitation of the results—

(i) includes the distribution of a contract product or the licensing of a contract technology, and

(ii) is carried out by a joint team, organisation or undertaking or is jointly entrusted to a third party;

(c) providing for practices constituting specialisation relating to exploitation; or

(d) restricting the freedom of a party to the agreement to produce, sell, assign or license a product, technology or process which competes with a contract product or contract technology during the period for which the parties have agreed to carry out joint exploitation of the results.

(3) An R&D agreement which provides for joint exploitation of the results does not breach the condition in paragraph(1)(c) by fixing prices charged to immediate customers or fixing licence fees charged to immediate licensees where the joint exploitation of the results—

(a) includes the distribution of a contract product or the licensing of a contract technology, and

(b) is carried out by a joint team, organisation or undertaking or is jointly entrusted to a third party.

(4) An R&D agreement does not breach the condition in paragraph(1)(d) by requiring or providing for the results of the research and development to which it relates to be licensed on an exclusive basis to another party to the agreement.

(5) In this article—

“active sales” means—

(a)

actively targeting customers by for instance calls, e-mails, letters, visits or other direct means of communication,

(b)

targeted advertising and promotion, by means of print or digital media, offline or online, including online media, digital comparison tools or advertising on search engines targeting customers in specific geographical areas or customer groups,

(c)

advertisement or promotion that is only attractive for the buyer if it (in addition to reaching other customers) reaches a specific group of customers or customers in a specific geographical area (and is considered active selling to that customer group or customers in that geographical area),

(d)

offering on a website language options different to the ones commonly used in the geographical area in which the distributor is established, or

(e)

using a domain name corresponding to a geographical area other than the one in which the distributor is established;

“digital comparison tools” means online intermediary services used by end users to compare prices, quality or other characteristics of, and potentially to switch or purchase, goods or services from a range of businesses;

“passive sales” means—

(a)

sales in response to unsolicited requests from individual customers, including delivery of goods or services to such customers without the sale having been initiated through advertising actively targeting the particular customer group or geographical area,

(b)

general advertising or promotion that reaches customers in other distributors’ geographical areas or customer groups (whether exclusive or not) but which is a reasonable way to reach customers not in those other distributors’ geographical areas or customer groups (whether exclusive or not), for instance to reach customers in a supplier’s own geographical area, in that, for example, it would be attractive for the buyer to incur the costs of the general advertising or promotion concerned even if it would not reach customers in other distributors’ geographical areas or customer groups (whether exclusive or not), or

(c)

[F1 participating in a public procurement exercise undertaken in accordance with the Procurement Act 2023.]

Textual Amendments

F1 Words in art. 10(5) substituted (24.2.2025) by The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (S.I. 2025/163), regs. 1(2), 27(2)

Commencement Information

I1 Art. 10 in force at 1.1.2023, see art. 1(b)