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Competition Law Issues

Competition Law Issues

Competition law must also be taken into account in developing collaborative arrangements such as Manufacturing Licences and Franchising. EU competition law prohibits agreements or concerted practices which prevent, restrict or distort competition and affect UK and/or EU trade.

However, any such arrangements may be exempt if the parties together have a turnover of less than 200 million ECU or 5% of a relevant market.

In other cases, if you confine the terms of your agreement within block exemptions covering patent and know-how licences, exclusive distribution, exclusive supply and purchase and franchising this will normally avoid the need for you to obtain individual clearance of agreements.

UK competition law requires parties to an agreement to notify certain restrictive potentially anti-competition terms to the Office of Fair Trading. However, common forms of exclusive dealing and the licensing of IPRs may well not be a problem provided certain objectionable restrictions are not imposed.

Fines and compensation claims can follow breach of competition rules. This is certainly not an area for DIY and legal clearance should be obtained to establish if there is a need to modify an agreement or alternatively to notify it to the appropriate competition authority.

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