Article 8 Excluded restrictions

(1)

Subject to article 9 (3), a technology transfer agreement must not contain an excluded restriction.

(2)

An excluded restriction means—

(a)

any direct or indirect obligation on the licensee to grant an exclusive licence or to assign rights, in whole or in part, to the licensor or to a third party designated by the licensor in respect of the licensee’s own improvements to, or the licensee’s own new applications of, the licensed technology rights;

(b)

subject to paragraph (3), any direct or indirect obligation on a party to the technology transfer agreement not to challenge the validity of intellectual property rights held by the other party which have effect in the United Kingdom;

(c)

if the undertakings party to the technology transfer agreement are not competing undertakings, any direct or indirect obligation—

(i)

limiting the licensee’s ability to exploit its own technology rights, or

(ii)

limiting the ability of either of the parties to the agreement to carry out research and development, unless the restriction is indispensable to prevent the disclosure of know-how licensed under the agreement to third parties.

(3)

In the case of an exclusive licence under a technology transfer agreement, provision permitting termination of the agreement in the event of the licensee challenging the validity of any of the licensed technology rights is not an excluded restriction falling within paragraph (2)(b).

(4)

In this article “exclusive licence”, in relation to a technology transfer agreement, means a licence under which the licensor itself is not permitted to produce products on the basis of the licensed technology rights and is not permitted to license the licensed technology rights to third parties, whether in general or for a particular use or in a particular territory.