The European Commission has just adopted a revised block exemption regulation to apply from May 1, 2014 to software, know-how or patent user licenses concluded for the production of goods and services.

The market share thresholds to obtain a block exemption in the current regulation, namely 
20 percent (agreements between competitors) and 30 percent (agreements between non-competitors), are maintained in the revised version. There is also no significant change to the list of hardcore restrictions in agreements between competitors; it has just been simplified.

On the other hand, certain clauses have been excluded from the scope of the block exemption, and their lawfulness will now have to be examined on a case-by-case basis: (i) restrictions of passive sales between licensees in agreements between non-competitors; (ii) termination clauses in non-exclusive license agreements allowing the licensor to end the agreement if the licensee challenges the validity of the intellectual property rights and (iii) all clauses containing exclusive grant back obligations for licensees for improvements of the licensed technology, with no distinction being made between severable and non-severable improvements.

Although the regulation does not make any important changes to the current rules, the clarifications and recommendations in the new guidelines with regard to the creation of patent pools and their resulting licensing arrangements are a welcome addition.