The UK Government has adopted a new, UK specific Technology Transfer Agreements Block Exemption Order (“TTBEO”), which came into force on 1 May 2026, replacing the assimilated EU Technology Transfer Block Exemption Regulation (“TTBER”).1 The CMA launched a consultation on 30 April 2026 on draft guidance to accompany the TTBEO, which will close on 11 June 2026.2 The change marks a significant milestone in the post Brexit evolution of UK competition law.
For most businesses, the new TTBEO will feel familiar. The UK Government has chosen continuity over radical reform, preserving the core structure of the TTBER while introducing targeted refinements designed to better reflect UK markets, modern technology licensing practices, and enforcement priorities. At the same time, the new regime underlines the importance of actively reviewing existing and future technology transfer agreements to ensure they continue to benefit from the competition law “safe harbour”.
This briefing explains what the new TTBEO is, why it matters, what is changing, and the practical steps life sciences businesses should be taking now.
Why technology transfer matters under competition law
Technology transfer agreements3 - including licences of patents, software, know how and other intellectual property - allow technology owners to commercialise IP, enable licensees to develop new products and services, and often promote competition by spreading access to new technologies.
However, such agreements can also restrict competition if they limit output, fix prices, allocate markets or foreclose competing technologies. In the UK, these risks are addressed by Chapter I of the Competition Act 1998, which prohibits anticompetitive agreements unless they qualify for an exemption.
In the life sciences sector, block exemptions accordingly play a crucial role by providing legal certainty for technology transfer and licensing arrangements, which might otherwise raise competition law concerns. Where an agreement falls within a block exemption, it is automatically exempt from the Chapter I prohibition, removing the need for a detailed individual assessment. The TTBER has historically provided this “safe harbour” for qualifying technology transfer agreements.
TTBER versus TTBEO: What is changing in 2026?
Following Brexit, the EU TTBER was retained in UK law as “assimilated” legislation. The TTBER expired on 30 April 2026 and ahead of this deadline the European Commission adopted on 16 April 2026 a revised version of the TTBER and accompanying guidelines. However, after an extensive review, consultation and market engagement, the UK’s Competition and Markets Authority (“CMA”) recommended in September 2025 that the TTBER should be replaced with a UK specific block exemption order, rather than allowed to lapse or be fundamentally rewritten.4 In making its recommendation, the CMA expressly noted that it considered the importance of prioritising growth and investment, especially in Life Sciences (alongside other growth driving sectors identified in the UK Government’s Modern Industrial Strategy).
The UK Government accepted that recommendation and the TTBEO came into force on 1 May 2026.5 The new Order largely mirrors the existing TTBER (the CMA having recognised that material differences between the two regimes could increase the cost of, and disincentivise licensing in the UK), but with a number of important refinements.
EU comparison – why does this matter for life sciences, pharma and health businesses?
Although the UK TTBEO broadly preserves the existing TTBER safe harbour framework, divergence is emerging in practice rather than in the structure of the exemption itself, driven primarily by differences in guidance, analytical emphasis and enforcement focus.
In the EU, the revised Technology Transfer Guidelines place significantly greater emphasis on the competition law assessment of data driven licensing. This is increasingly relevant for life sciences and health businesses licensing clinical trial data, real world evidence, AI enabled diagnostics and combined IP and data assets. Unlike the UK TTBEO — which largely focuses on whether particular data related rights fall within the definition of “technology rights” and otherwise relies on general Chapter I principles — the EU guidance addresses data licensing more holistically, including its interaction with the EU’s wider data regulatory framework and the application of competition law outside the safe harbour. The UK TTBEO is not accompanied by equivalent bespoke guidance, meaning that data heavy licensing structures in the UK will often require a more bespoke, effects based competition law assessment.
The EU regime also provides additional clarity for innovation driven sectors, including confirmation that technologies generating no sales are treated as having zero market share, and that a three year grace period applies where market share thresholds are exceeded during the life of an agreement. While the UK TTBEO mirrors the extended grace period, it is accompanied by more limited contextual explanation and fewer illustrative examples.
Further, while Licensing Negotiation Groups (“LNGs”) remain outside the scope of the block exemption in both regimes, EU authorities have adopted a more pragmatic approach in guidance and enforcement practice, including the issuing of comfort letters for carefully structured collective access or negotiation models. This contrasts with the position in the United States, where collective buyer side licensing negotiations continue to attract heightened antitrust scrutiny and a material risk of per se treatment.
Practical takeaway. For multinational life sciences and health businesses, this means that licensing structures which are UK compliant may raise different or more nuanced issues in the EU, and materially different risks in the US. Cross border licensing, data driven collaborations and portfolio wide strategies should therefore be assessed on a jurisdiction by jurisdiction basis, rather than by relying on UK TTBEO compliance alone.
|
What stays the same?
For many businesses, the most striking feature of the new TTBEO is how much remains unchanged:
- Scope of agreements: The exemption will continue to apply to bilateral technology transfer agreements, including licences of patents, software copyright, know how and related IP for the production of goods or services.
- Core structure: The familiar framework of market share thresholds, hardcore restrictions (which remove the benefit of the exemption entirely), and excluded restrictions (which fall outside the exemption but do not invalidate the rest of the agreement) is retained.
- Policy objective: The overarching aim remains to protect agreements that are “essentially benign or beneficial” while allowing the CMA to intervene where licensing arrangements harm competition.
The CMA found broad stakeholder consensus that the TTBER has worked well in practice and that legal certainty in this area is critical to innovation and investment.
The new UK regime: What are the key changes?
Although not revolutionary, the new TTBEO introduces several key changes.
1. Refined definition of “technology rights”
The new TTBEO removes “utility models” from the definition of technology rights, reflecting the fact that UK law does not recognise them. At the same time, it expands coverage to include “database rights” and “copyright in databases”, acknowledging the growing importance of data driven licensing models. Importantly, this means that the new TTBEO would exempt a broader scope of intellectual property rights than its EU counterpart.
2. A new alternative test for technology markets
Under the assimilated TTBER, automatic exemption applies if certain thresholds are met, including certain market share thresholds.6 One of the most significant developments is the introduction of an alternative to the existing market share thresholds. In effect, in addition to meeting the existing market share thresholds, an agreement may qualify for exemption where there are at least three independently controlled, substitutable competing technologies.
The new TTBEO also includes a new mechanism for calculating market share, whereby if the market shares for the calendar year preceding the technology transfer agreement are not an accurate representation of the parties’ market strength on the relevant market(s), market shares are to be calculated as an average of the parties’ market shares for the three preceding calendar years.
Further, the “footprint” now applies to both parties to the agreement (previously only applied to a licensor’s market share). The “footprint” approach means that when calculating a market share, this should be done by aggregating the sales of: (i) the licensor, and (ii) all its licensees’ products incorporating the licensed technology. The ‘footprint’ approach is used due to the practical difficulties in calculating a licensor’s market share based on royalty income alone.
This reflects the CMA’s recognition that market share calculations can be artificial or misleading in fast moving, innovation driven sectors. The new test is designed to make the exemption more practical and flexible, particularly in emerging technology markets.
3. Active and passive sales clarified
The TTBEO introduces explicit definitions of “active sales” and “passive sales”, aligned with the UK Vertical Agreements Block Exemption Order (“VABEO”).7 This alignment is intended to promote consistency across UK competition law and reduce uncertainty where technology licences interact with distribution arrangements. The TTBEO also amends the Research and Development Agreements Block Exemption Order so that the definition of passive sales is aligned with the definitions set out in the TTBEO and the VABEO.
4. CMA information gathering and withdrawal powers
The new TTBEO gives the CMA clearer powers to request information from parties to technology transfer agreements and, in exceptional cases, to withdraw the benefit of the block exemption on a case by case basis. In particular, the new TTBEO obliges parties to provide information within 10 working days following receipt of a request for information from the CMA. Failure to respond without reasonable excuse can result in the cancellation of the application of the block exemption for the agreement in question. These powers are intended as a safeguard rather than a routine enforcement tool and the CMA must consider representations from the parties.
5. Grace period extended from two to three years
If parties to an agreement who previously met the market share and/or ‘three or more competing’ thresholds at the time of entering into an agreement no longer satisfy those criteria, they have a three-year grace period before the agreement falls outside of the scope of the automatic exemption, recognising that most early-stage technologies usually experience significant fluctuations in their market shares.
What is not in scope?
The CMA also discussed whether to introduce changes to allow technology pools and licensing negotiation groups to be covered by the new TTBEO. Ultimately, however, the view was taken not to include these within the TTBEO’s scope given that these are generally not covered by the block exemption, as such arrangements usually involve more than two parties. Businesses should therefore undertake a careful analysis when considering the competition aspects of such pooling / group arrangements.
Transitional arrangements and duration
The new TTBEO applies for 12 years (ceasing to have effect at the end of 31 December 2038), providing long term certainty for businesses. Importantly, there is a one-year transitional period following the expiry of the assimilated EU TTBER on 30 April 2026. This reduces the risk of sudden non compliance and gives businesses breathing space to update legacy agreements. Full compliance with the new TTBEO will be required by 30 April 2027.
Practical implications for businesses and legal teams
While the new regime is broadly familiar, legal and commercial teams should consider the following actions:
- Audit existing agreements: Identify technology transfer agreements that rely on the TTBER and assess whether they will continue to qualify under the new definitions and tests.
- Review market analysis approaches: Consider whether the new “three competing technologies” test may be more appropriate than traditional market share calculations in certain sectors.
- Update templates and guidance: Standard licensing templates should be refreshed to reflect the new UK TTBEO and the CMA’s evolving guidance.
- Monitor CMA guidance: Carefully review the CMA’s proposed guidance in this area. The CMA has indicated that further guidance will follow, particularly on which agreements will fall within and outside of scope of the new TTBEO, the application of the new tests and identify when certain arrangements are likely to benefit from individual exemption.
Looking ahead
The adoption of the UK new TTBEO is a clear signal that the UK intends to maintain a stable, pro innovation competition framework, while tailoring the details to domestic legal and economic realities. For businesses engaged in technology licensing, the message is reassuring. The new regime offers continuity, flexibility and legal certainty, provided agreements are actively reviewed and kept compliant.
Please reach out to a member of the Stephenson Harwood Competition team in case you have any questions on what the new TTBEO may mean for your business.
1 See: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202600877 and https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:C_202602323.
2 See here.
3 A ‘technology transfer agreement’ for these purposes is an agreement in which one party (the licensor) authorises another (the licensee) to use certain industrial property rights (such as patents, design rights, software copyrights and know-how) for the production of goods or services. They therefore relate to the licensing or the assignment of technology rights between two parties.
4 Consultation on the CMA’s proposed recommendation on the Assimilated TTBER - GOV.UK
5 See: The Competition Act 1998 (Technology Transfer Agreements Block Exemption) Order 2026
6 These current thresholds are as follows:
• In case of a horizontal relationship (i.e., the agreement is between competing businesses), the parties’ combined market share must not exceed 20% on relevant market(s); and/or
• In case of an agreement between non-competing parties, the parties each have a market share which does not exceed 30% on relevant market(s).
7 See Article 7(10) of the TTBEO.
