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).

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.

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