EUR-Lex - 31975D0570 - EN

(b) The users of the process benefit by improvements made as a result of cooperation on know-how between licensees and by the favourable influence on prices of competition between licensees.

(c) In the absence of the agreements only Lareco - a Heidemaatschappij subsidiary - would have worked the process ; the beneficial effects would have been smaller and there would have been no exchange of know-how and no competition between the licensees.

(d) The licensees are in competition with each other, and there are other competing processes.

The first point to be made is that what is objected to is not the patent licensing agreements themselves but only the anticompetitive provisions in the second subparagraph of Clause 11 (1) and the decisions taken jointly under that subparagraph. These therefore are the only provisions requiring appraisal in the light of Article 85 (3).

An undertaking by a patentholder to restrict his own freedom to grant licences is not of the essence of his rights as patentholder, even where the licensees have gone to the trouble and expense of improving the invention. There might be justification for differences in royalties, but there is none for a restriction of capacity.

The provisions objected to do not contribute to improving the production or distribution of goods or to promoting technical or economic progress. On the contrary, by allowing the number of firms authorized to exploit the patented process to be restricted they hinder wider use of the process and prevent know-how from being enriched by a broader range of experience. This process is already well known and widely used in the Netherlands ; confining its exploitation to a limited number of licensees has no beneficial economic effect such as might be expected of an exclusive licence having the prime purpose of facilitating penetration of a new market.

As the first test of Article 85 (3) is not satisfied, there is no need for the Commission to consider the others. In point of fact, however, the agreements fail the other tests too. Far from allowing consumers a fair share of the benefit derived by the firms concerned from the agreements, the agreements hinder the development of competition and prevent users from being supplied on more favourable terms. The agreements do not contribute to attaining the economic objectives in the first subparagraph of Article 85 (3), so the question of their indispensability does not arise. Despite the assertions of the undertakings concerned, the clause objected to enables them to eliminate competition from all other Dutch or foreign firms in installing drainage systems in the Netherlands by the patented process. In many cases vertical and horizontal drainage processes are not interchangeable. Selection of one or other of the processes depends on a number of circumstances, particularly the configuration of the soil and subsoil, the depth of the water table, and whether buildings are already standing on the land to be drained or are to be put up during the operation. Moreover, contracts for major projects frequently stipulate that the horizontal process must be used while in other cases the specification as regards, for instance, the maximum width of the trench to be dug means that no other process can be used and that undertakings which are not licensed to exploit the patented process cannot tender. Even if, as the firms concerned argue, there are a large number of drainage firms in business in the Netherlands, the fact remains that very few of them have the material or financial resources needed to carry out large projects ; consequently competition, already considerably reduced, is virtually eliminated by the agreements in question.

Prelimary examination has shown, then, that the agreements do not satisfy the tests of Article 85 (3) of the Treaty establishing the EEC.

IV. Application of Article 15 (6) of Council Regulation No 17

The infringement of Article 85 began on the day on which the agreements between Heidemaatschappij and its licensees were concluded, that is to say on 17 June 1971 for the agreements with Lareco, Mos and De Ruiter and on 17 July 1971 for the agreements with Reinders and Wessemius, which merged into a single firm in March 1973.

The firms did not notify the agreements until 6 August 1974, and then only in anticipation of the possible liability as a result of the action brought against them before the Arnhem District Court for breach of Articles 85 and 86 of the EEC Treaty and from the filing of a complaint with the Commission.

In their reply to the statement of objections against them the firms in question offered to call witnesses in support of their arguments. These witnesses need not be heard until the administrative procedure in connection with a final decision, for with the additional material obtained from the reply there is now enough evidence for a provisional Decision to be taken.

The effect of this Decision will be to remove the immunity given by notification of the agreements from the imposition of fines under Article 15 (2) (a) of Regulation No 17,

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