From 1 May 2026 technology transfer agreements that meet specified criteria are automatically exempt from the prohibition of agreements between businesses that prevent, restrict or distort competition pursuant to Chapter 1 of the Competition Act 1998 (the ‘Chapter 1 Prohibition’).  With some minor changes, this exemption will be a continuum of an exemption that existed in the UK since Brexit and has existed under EU law for many years.

Published 7 January 2026

Technology transfer agreements are agreements involving the licensing or assignment of ‘technology rights’. Technology rights are know-how, patents, design rights (whether registered or unregistered), rights in semiconductor topographies, supplementary protection certificates, plant breeders’ rights granted in accordance with Part 1 of the Plant Varieties Act 1997, copyright in software, and copyright in a database and database right.

Parties to a technology transfer agreement typically do not need to concern themselves with the Chapter 1 Prohibition unless their combined share of a market relevant to the technology agreement is at least 20%, if the parties are competitors, or 30% if not competitors.

Points to note that are different under the new regime:

• removed from the definition of technology rights compared to the current law are rights in utility models, as these are not protected under UK law (they are protected under EU law).  Added to the definition are copyright in a database and database rights, reflecting the increased significance of data in the modern economy
• the new regime introduces the concepts of ‘active sales’ and ‘passive sales’.  Under the new exemption restrictions on active and passive sales included in technology transfer agreements are exempt, so allowing the technology agreement to mirror similar restrictions in a related distribution agreement
• a new market share metric is introduced.  Under the new exemption the 20% or as relevant 30% threshold test is not met if the parties fall below the threshold in relation to their share of the product market relevant to the agreement and, either is also below the threshold in relation to the market for the technology itself or (the new element) there are three or more independent competing technology rights

Technology transfer agreements that meet the current law but would not meet the conditions in the new regime will be considered exempt from the Chapter 1 Prohibition until 30 April 2027.