The new UK TTBEO: Navigating a bespoke regime for Technology Licensing

On 1 May 2026, the legal framework for technology licensing in the UK entered a new chapter. With the expiry of the “assimilated” EU Technology Transfer Block Exemption Regulation (TTBER), the UK has officially transitioned to its own bespoke regime: the Competition Act 1998 (Technology Transfer Agreements Block Exemption) Order 2026, or the TTBEO.

While the TTBEO largely preserves the familiar architecture of the previous regime (including the 20% and 30% market share safe harbours), it introduces several deliberate recalibrations. For many licensing arrangements – including those in the tech, life sciences and pharma sectors – that continuity will be welcome: the UK regime continues to preserve the core block exemption framework on which parties have long relied for patent and know-how licensing. There are, however, notable points of divergence.

Data-driven innovation: making the implicit explicit

A notable departure from the previous EU regime is the inclusion of copyright in a database and database rights within the definition of “technology rights”. Unlike the EU, the UK has decided to embed these rights directly into the statutory definition. With a growing number of collaborations now involving the licensing of large datasets (particularly those supporting AI-focused products), this development offers opportunities for a more robust “safe harbour” for licences of database rights.  

Market dynamics: the “Rule of Three”

Calculating market shares in nascent, fast-moving or R&D heavy markets has always been a challenge. Where market shares cannot be reliably determined, an agreement can still qualify for the block exemption if there are at least three independently controlled, substitutable technologies available to third parties.

This “innovation competition” test offers a pragmatic solution. However, the Order requires there to be three independently controlled substitutable technologies available in addition to the technology being licensed. In practice, this is a “Rule of Four”. In highly specialised or early-stage R&D sectors (including novel technology and AI-related R&D, as well as nascent modalities and rare disease areas in life sciences) finding a fourth independent player may be a tall order. For the most innovative ‘pioneering’ technologies, the safe harbour may therefore remain out of reach, leaving companies reliant on the same complex self-assessments they were hoping to avoid. 

Modern commercial realities: know-how and sales

The TTBEO also modernises the definition of know-how to include information that is significant and useful for the sale of products, not just their production. This may be relevant for digital and software businesses, where deal value can lie in implementation support, integration expertise and route-to-market know-how as much as in the code or underlying IP itself.

To benefit from the safe harbour, the information must still satisfy the classic cumulative criteria: it must be secret, significant, and described (identified) in a sufficiently comprehensive manner. This broader scope may allow more complex hybrid agreements - those combining technology transfer with sophisticated route-to-market strategies - to fall within the block exemption, provided the technology rights remain the primary focus of the deal. Pure R&D agreements, however, remain primarily a matter for the separate R&D block exemption regime and the TTBEO does not displace that boundary – a distinction that is particularly relevant in life sciences and other sectors, where licences often sit alongside broader development, manufacturing or commercialisation obligations.

Field of use: continuity as a strategic tool

The TTBEO’s treatment of field of use restrictions is consistent with the EU approach. Field of use restrictions remain within the safe harbour, allowing a licensor to license the same technology to different partners for distinct applications – for example,  “human medicine” versus “animal health” or a dataset for “medical diagnostics” versus “drug discovery” – provided the fields are defined by technical characteristics rather than as a mask for customer allocation.  

A shield, not a sword: termination-on-challenge

The law retains its position on prohibitions on a party’s ability to challenge the validity of the other party’s IP rights as excluded restrictions.  The UK has maintained a caveat for exclusive licences, allowing “termination-on-challenge clauses”.  This means that, in an exclusive licence, a clause allowing the licensor to terminate the agreement if the licensee challenges the validity of the other party’s IP rights remains exempted. However, a no-challenge clause itself (even in an exclusive licence) remains an excluded restriction. This reflects the different position of an exclusive licensor, who may otherwise be compelled to continue funding a licensee who has turned hostile.

Improvements and grant-backs

The TTBEO continues to hold the line on exclusive grant-backs. Any obligation on a licensee to grant back an exclusive licence or to assign rights in improvements to the licensor (or a person of the licensor’s choice) remains an excluded restriction (but which may, as before, still be capable of individual exemption depending on the circumstances). Non-exclusive grant-backs, however, remain within scope. This is because they are seen as encouraging a virtuous circle of innovation where the licensor can benefit from a licensee’s improvements, without restricting the licensee’s own commercial freedom. This will remain a familiar and useful pattern, including in technology, software, and life sciences collaborations, and other instances where development work may generate formulation, manufacturing or other follow-on improvements.

Procedural teeth: the 10-Day rule 

The TTBEO includes enhanced procedural powers for the CMA. The Order grants the CMA authority to request information regarding a specific agreement, with a strict 10-working-day deadline for response; failure to comply without a reasonable excuse may result in the block exemption being withdrawn for that agreement. Businesses relying on the TTBEO should therefore maintain clear records of the basis on which the exemption conditions are considered to be met, including the competition analysis underlying reliance on the safe harbour.

What you should consider doing now

• Review data licensing templates: Agreements involving dataset licensing should be reviewed to see if they can now benefit in the UK from the TTBEO’s expanded safe harbour, which may not be available under the equivalent EU regime.
• Record “Rule of Three” assessments in deal documents: For technologies where market share is contested or unclear, documenting the existence of at least three viable competitors at the outset of a deal will provide a vital fallback for compliance should the position be challenged several years down the line.
• Check the R&D / licensing boundary: Where an arrangement combines technology licensing with broader collaboration obligations, confirm whether it properly falls within the TTBEO or whether the R&D block exemption framework is the more relevant starting point.
• Update “passive sales” language: The TTBEO aligns its definitions of active and passive sales with the UK’s Vertical Agreements Block Exemption Order. Ensure that licensing templates are consistent with these UK-specific definitions, particularly where they diverge from the EU’s approach to online sales.
• Manage the transition: Existing agreements that were exempt under the old regime have a one-year transitional period (until 30 April 2027). This provides a window for a structured portfolio review to ensure all ongoing arrangements align with the new UK standards. For life sciences businesses in particular, that review may usefully focus on indication-based field-of-use language, challenge clauses in exclusive licences, and grant-back provisions in long-term platform, co-development and manufacturing arrangements.
• Consider whether divergence can be used strategically: For businesses with cross-border licensing portfolios, differences between the UK and EU regimes may create opportunities for more tailored territorial or drafting approaches, rather than relying on a single pan-European model.

The TTBEO reflects a considered update to the technology licensing framework: broadening the definitions of technology and know-how in ways that may benefit data-rich and innovation-focused businesses, while introducing a more active CMA enforcement mechanism. For most businesses, the core framework will feel familiar, but the UK-specific adjustments – and their points of divergence from the EU – will require attention at the drafting and portfolio-management stage.

To read more about the EU’s new Technology Transfer Block Exemption, read our blog, Updating the Playbook: The EU’s Revised TTBER and What It Means for Technology Licensing. If you would like to discuss implications of the UK’s TTBE Order, the EU’s revised TTBER and/or their interaction for your technology licensing arrangements, please get in touch with your usual Freshfields contact.