1. August 2023
On 1 July 2023 the new horizontal block exemption regulation for agreements on research and development (Regulation (EU) 2023/1066; "R&D BER") entered into force. The R&D BER is relevant for companies that carry out or intend to carry out joint or paid-for research and development of products or technologies and/or the joint exploitation of the results of such research and development (“R&D”). It has replaced Regulation (EU) No. 1217/2010 on research and development agreements that had been in force since 1 January 2011.
Block exemption regulations exempt the behaviour of companies from the prohibition of cartels (Art. 101 (1) Treaty on the Functioning of the European Union (“TFEU”)) under certain conditions and are therefore of particular importance for the cooperation between companies.
The R&D BER grants a block exemption to agreements between two or more parties on joint R&D and paid-for R&D of contract products or contract technologies and/or the joint exploitation of the results, provided that they fulfil the criteria set out in the R&D BER. The parties can establish a joint undertaking or joint team for the cooperation, but can also jointly entrust a third party with R&D or cooperate by way of specialisation (division of labour). In case of paid-for R&D, one party carries out R&D and the other finances the work.
The duration of the block exemption depends on whether the parties are competitors or not.
If the R&D agreement does not fulfil the criteria of the R&D BER, but restricts competition, it can be individually exempted from the prohibition of cartels. According to Art. 101 (3) TFEU, restrictions of competition are individually exempted from the prohibition of cartels if they improve the production or distribution of goods or promote technical or economic progress; they are indispensable for the attainment of these objectives; consumers receive a fair share of the resulting benefit; and the agreement does not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question.
The Commission has not adopted its initial proposal that parties competing in innovation must demonstrate that at least three additional competing and comparable R&D efforts exist in order for the R&D BER to apply. The Commission is of the opinion that agreements between companies which are not competing suppliers of products, technologies or processes capable of being improved, substituted or replaced by the results of the R&D and which satisfy the conditions of the R&D BER will only eliminate effective innovation competition in exceptional circumstances. Therefore, Art. 10 (2) lit. e R&D BER gives the Commission the power to withdraw the benefit of the R&D BER where the existence of the R&D agreement would substantially restrict innovation competition in a particular field;
In addition to the R&D BER, the Horizontal Guidelines were revised. The Horizontal Guidelines have been in force since their adoption and publication in the Official Journal of the EU, which took place on 21 July 2023. Chapter 2 of the new Horizontal Guidelines navigates the assessment of R&D agreements, including how to apply the R&D BER.
Overall, the changes in the revised R&D BER and in Chapter 2 of the new Horizontal Guidelines are less extensive than expected. It is favorable that the Commission has not included its most controversial proposal, namely for companies competing in innovation to have three or more additional competing and comparable R&D efforts for the R&D BER to apply. Such a change would have reduced the practicability of the R&D BER. It remains to be seen in how far the revised R&D BER will lead to more legal certainty in the future. It is valid for the next 12 years (until 30 June 2035).