The Gazette 1973

(5) Dr. Helm was of the opinion that accordingly also licensor and licensee could undertake to refrain from exporting directly into one another's territory. The Commission, on the other hand, in its Davidson Rubber Co. decision of 9 June 1972, held the view that a violation of Art. 85 EEC Treaty obtains, if the Ger- man, French and Italian licensees of an American patent owner undertook to refrain from exporting into one another's territory. The Commission refused to grant an exemption under Art. 85(3). II In the following Dr. Helm dealt with the treatment of licence agreements under European cartel law : (1) According to Art. 4(2), No. 2b of Regulation 17, certain licence agreements are exempted from noti- fication. Such exemption, however, applies to a very limited number of licence agreements only. For example, the licence agreement must not contain any restraints which would bear on the licensor. Since in the Com- mission's opinion already any exclusive licence contains a restraint on the licensor, all exclusive licences would, for instance, be notifiable. In any case of doubt, licence agreements should be notified to the Commission in Brussels in order to guarantee the exemption under Art. 85(3). (2) Presumably still in 1973 the Commission will pass a regulation on group exemptions for licence agreements on patents. A preliminary announcement was published on December 24, 1962, in which the Commission listed numerous clauses regarding patent licences which it considered unobjectionable, but this announcement is not binding on the Courts. The Commission itself has already deviated from it. (3) Art. 85 EEC Treaty only applies to licence agree- ments if they may affect perceptibly trade between Member States and entail a perceptible restraint on competition. Such constituent elements may be absent in licence agreements with firms from countries outside the EEC. This was the case in the Commission's decision of 9.6.1972 Raymond-Nagoya. In this case the German subsidiary of a French company granted to a Japanese company an exclusive patent licence for the manufacture in Japan of fastening elements made of plastic attached to motor cars. This agreement con- tained several clauses, which—if trade between Member States had been affected—would have been considered to be a violation of Art. 85, EEC Treaty. The licence was an exclusive one, the Japanese enterprise was not entitled to export the licenced products into the Com- mon Market, nor was it allowed to challenge the licen- sed protection rights. The Commission considered the matter in all its aspects and decided that the agreement was not against Art. 85, as it did not affect competition within the Common Market, but only within Japan. A negative clearance was accordingly granted to this agreement. This decision does not necessarily mean that licence agreements, in which enterprises from third countries are involved as licensees, are never subject to European cartel law. If the company concerned had been Swedish instead of Japanese, it is likely that the decision would have been different. If, for example, in a licence agreement, an Irish company prohibits the Swedish licensee from mnaufacturing and selling competing pro- ducts, not merely in Sweden, but throughout the Com- mon Market, it is likely that the Swedish licensee could successfully challenge the latter clause, as a violation of Art. 85.

I l l In the following Dr. Helm spoke about some typical provision in licence agreements : (1) If a licensor grants an exclusive licence, he is not entitled to grant any further licences, nor can he exercise the patent personally any longer. Still in its announcement of December 24, 1962, the Commission was of the opinion that an exclusive licence was un- objectionable under cartel law aspects. This position was reconsidered in three recent cases. In the Burroughs Delplanque and the Burroughs-Geha cases of 22 December 1971, a Swiss enterprise, which was a sub- sidiary of the American company, Burroughs, granted the French firm Delplanque and the German firm Geha an exclusive manufacturing licence for France and Germany respectively on a carbon paper product. The licensees, however, were allowed to sell this product all over the Common Market—thus the distribution licence was non-exclusive. In the Davidson Rubber decision of 9 June 1972, an American company had granted an exclusive licence for manufacture as well as distribution to a German, French and Italian company respectively. On the Com- mission's request the enterprises amended their agree- ments in a way that any of them was allowed to sell the licenced products within the entire Common Mar- ket. In these cases, the Commission took the view that an exclusive licence, even if it relates the exclusivity to the manufacture only, may be subject to Art. 85, because the licensor was no longer able to conclude licensing agreements with other interested parties. Dr. Helm deems this view of the Commission to be wrong; if it were correct then any purchase agreement would con- tain a restraint on competition. However, according to the Commission's view the exclusive manufacturing licence need not necessarily violate Art. 85(1). In the two Burroughs decisions the Commission did grant a negative clearance, on the assumption that the exclusive manufacturing licence did not come within the European cartel prohibition because the licensees only had a small market share. In the Davidson Rubber case the Commission esta- blished a violation of Art. 85(1), because the market share of the licensees was considerable, but it granted exemption under Art. 85(3) EEC Treaty for the ex- clusive licence on the manufacture. (2) It can be agreed upon in the licence agreement that the licence terminates prior to the patent. The licensee can undertake to pay royalties. He can be pro- hibited from granting sub-licences. All restrictions of the licensee covering the period after the expiration of the licensed patents, in parti- cular the obligation to continue to pay royalties, violate Art. 85(1). (3) The Commission declared the following pro- visions to be unobjectionable : (a) The obligation to manufacture minimum quanti- ties of the licensed product. (b) Payment of a minimum sum for royalties. (c) The licensee's obligation to observe specific techni- cal quality standards prescribed by the licensor, provided they are indispensable. (d) The obligation to purchase raw materials or ini- tial products imposed upon the licensee, provided they are indispensable for a perfect utilization of the invention. (4) In contrast to this, the following provisions violate Art. 85(1): 189