The Gazette 1989

GAZETTE

SEPTEMBER

1989

the validity of intellectual property rights held by the parties in the Common Market relevant to the R + D programme, are restricted as to the quantity of products they may manu- facture or sell or in the de t e rmi na t i on of prices or customers or freedom of market or to allow manufacture by third parties or are required to refuse unreasonably to meet demand from purchasers or to make it difficult for purchasers to obtain products. The Regulation, like Regula- tion 417/85, expires on 31 December, 1997. 5. Selective Distribution and Motor Vehicle Agreements Regulation 123/85 relates to certain categories of motor vehicle distribution and servicing agreements to which two under- takings are party and in which one agrees to supply the other only within a particular territory of the Common Market or only the other and a specified number of other undertakings for the resale of motor vehicles and spare parts. The dealer can be obliged among other things not to modify contract goods, not to manufacture competing goods, not to sell competing new vehicles or spare parts or use competing parts for mainten- ance, not to subcontract dis- tribution or servicing or repairs to other dealers without consent, not to maintain distibution branches outside the dealer's territory or seek customers or entrust distribution to others outside his territory or supply to a reseller contract goods unless the reseller is an undertaking within the distribution system, to observe certain minimum standards, to order goods from the supplier only at certain times or within certain periods, to sell mi n imum quantities, keep certain minimum stocks, demon- s t r a t i on vehicles, perform guarantee work, free servicing, use only specified spare parts and to inform customers of use of parts from sources other than the supplier. The dealer must provide services in respect of contract goods sold in another territory of the Common Market

by another dealer in the d i s t r i bu t i on ne two r k. The supplier cannot unreasonbly apply minimum requirements for distribution and servicing and must distinguish between cate- gories of goods (i.e. vehicles and parts) in calculating discount and must supply any car in its current range marketed in the Member State of the dealer. The Regulation expires on 30 June 1995. 6 . Patent Licences Regulation 2349 / 84 provides block exemption to certain categories of patent licensing agreements between two under- takings; such agreements may relate to national patents, European or Community patents as well as associated non- patented know-how. Such agree- ments may include obligations on the licensor not to license third parties or to exploit the licence itself, and obligations on the licensee to procure goods or services from the licensor, to pay a minimum royalty, restrict exploitation to particular appli- cations, not to exploit the patent after expiration of the agreement, to mark products with details of the patentee, to ensure minimum quality standards and to inform the licensor of infringements of the patent. A number of pro- visions cannot be included in agreements if the block exempt- ion is to apply, including, for example: prohibition on the licensee challenging the validity of the licensor's patent or other intellectual property rights, the duration of the licensing agreement beyond the term of the patent, restriction on either party competing with the other in respect of research and development, manufacture or sales, the charging of royalties on products not entirely or partially patented or manufactured by patented process, restriction as to the quantity of products either party may produce, freedom as to pricing and discounts, an obligation to assign improve- ments or new applications of the licensed patent, or a requirement to take further unwanted licenses. Agreements between mem- bers of a patent pool or com-

petitors in a joint venture or reciprocal agreements between competitors in relation to unpro- tected products are excluded from block exemption. The Regulation expires on 31 December 1994. 7. Franchise Agreements Regulation 4087/88, which took effect on 1st February 1989, grants a block exemption to franchise agreements between two undertakings, the franchisor and the franchisee, for the retailing of goods or the provision of services to end users, or a combination of these activities. It also covers cases where the relationship between the franchisor and the franchisee is made through a third under- taking, the master franchisee. However, the Regulation does not cover wholesale franchise agreements or industrial franchise agreements. The exemption from Article 85(1) will operate where there is an obligation on the franchisor, in a defined area, not to grant the right to exploit all or part of the franchise to third parties or itself supply the franchisor's goods to third parties, and an obligation on the franchisee to refrain from seeking customers for the goods or services outside the defined area. The Regulation allows the presence of certain obligations on the franchisee in order to protect the franchisor's intellect- ual property rights, for example: to sell goods or provide services according to specifications laid down by the franchisor, not to engage in any similar business in the area which would compete with a member of the franchised ne twor k, to use its best endeavours to sell the goods or provide the services and to offer for sale a minimum range of goods and achieve a minimum turnover. The exemption will apply even where the franchisee is obliged not to disclose to third parties the know-how provided by the franchisor or to communicate to the franchisor any experience gained in exploiting the franchise or not to use know-how licensed by the franchisor for purposes other than the exploitation of the franchise.

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