28.3.2014 Official Journal of the European Union L 93/17 COMMISSION REGULATION (EU) No 316/2014 of 21 March 2014 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation No 19/65/EEC of the Council of 2 March 1965 on application of Article 85(3) of the Treaty to certain categories of agreements and concerted practices ('), and in particular Article 1 thereof, Having published a draft of this Regulation, After consulting the Advisory Committee on Restrictive Practices and Dominant Positions, Whereas: G) Regulation No 19/65/EEC empowers the Commission to apply Article 101(3) of the Treaty by regulation to certain categories of technology transfer agreements and corresponding concerted practices to which only two undertakings are party which fall within Article 101(1) of the Treaty. Pursuant to Regulation No 19/65/EEC, the Commission has, in particular, adopted Commission Regulation (EC) No 772/2004 (3. Regulation (EC) No 772/2004 defines categories of technology transfer agreements which the Commission regarded as normally satisfying the conditions laid down in Article 101(3) of the Treaty. In view of the overall positive experience with the appli- cation of that Regulation, which expires on 30 April 2014, and taking into account further experience acquired since its adoption, it is appropriate to adopt a new block exemption regulation. This Regulation should meet the two requirements of ensuring effective protection of competition and () O] 36, 6.3.1965, p. 533/65. () Commission Regulation (EC) No 772/2004 of 7 April 2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements (O] L 123, 27.4.2004, p. 11). providing adequate legal security for undertakings. The pursuit of those objectives should take account of the need to simplify administrative supervision and the legis- lative framework to as great an extent as possible. Technology transfer agreements concern the licensing of technology rights. Such agreements will usually improve economic efficiency and be pro-competitive as they can reduce duplication of research and development, strengthen the incentive for the initial research and devel- opment, spur incremental innovation, facilitate diffusion and generate product market competition. The likelihood that such efficiency-enhancing and pro- competitive effects will outweigh any anti-competitive effects due to restrictions contained in technology transfer agreements depends on the degree of market power of the undertakings concerned and, therefore, on the extent to which those undertakings face competition from undertakings owning substitute technologies or undertakings producing substitute products. This Regulation should cover only technology transfer agreements between a licensor and a licensee. It should cover such agreements even if the agreement contains conditions relating to more than one level of trade, for instance requiring the licensee to set up a particular distribution system and specifying the obligations the licensee must or may impose on resellers of the products produced under the licence. However, such conditions and obligations should comply with the competition rules applicable to supply and distribution agreements set out in Commission Regulation (EU) No 330/2010 (°). Supply and distribution agreements concluded between a licensee and buyers of its contract products should not be exempted by this Regulation. (®) Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices (O] L 102, 23.4.2010, p. 1).