We have made it, folks! We have reached the final post in Gravely Group’s series on the Information Blocking Exceptions from the ONC Final Rule! (Don’t worry, though! This may be the last of the eight exceptions, but Gravely Group will continue to post new Information Blocking content.) We wrap up the Information Blocking Exceptions that deal with how an Actor fulfills requests for access, exchange, or use of electronic health information (EHI) with a summary of the Licensing Exception.

The Licensing Exception considers when an Actor’s Practice of licensing interoperability elements in order to access, exchange, or use EHI will not be considered information blocking. This exception sets forth the conditions that permit an Actor to license interoperability elements on reasonable and non-discriminatory terms as part of fulfilling a request to access, exchange, or use EHI.

First, what are “interoperability elements?” Interoperability elements are defined as hardware, software, integrated technologies or related licenses, technical information, privileges, rights, intellectual property, upgrades, or services that:

1. May be necessary to access, exchange, or use EHI; and
2. Is/Are controlled by the Actor, including the ability to confer all rights and authorizations necessary to use the element(s) to enable the access, exchange, or use of EHI.

Next, there are three categories of conditions that an Actor’s licensing of interoperability elements for the access, exchange, or use of EHI must meet under the Licensing Exception:

1. Conditions for Negotiating a License;
2. Conditions for Licensing; and
3. Additional Conditions related to the provision of interoperability elements.

 A Note on Terminology: We use the phrase “licensing request” below to mean, specifically, a request to license interoperability elements for purposes of accessing, exchanging, or using EHI. ONC makes it clear in their commentary in the Final Rule that requests to license interoperability elements “must always be based on a need to access, exchange, or use EHI at the time the request is made,” and not on prospective intent or for other purposes, such as development.^[1]

Negotiating a License Conditions

The Negotiating a License Conditions include strict timeframes in which licensing negotiations must take place. When an Actor receives a licensing request, the Actor must:

1. Begin licensing negotiations with the requestor within 10 business days of receipt of the request; and
2. Negotiate a license with the requestor within 30 business days, subject to the Licensing Conditions below.

Licensing Conditions

The license granted by the Actor must meet the following conditions:

1. The license must provide all of the rights necessary to enable and achieve the intended access, exchange, or use of EHI via the interoperability elements.
2. If the Actor charges a royalty for the license, the royalty must:

1. Be reasonable and non-discriminatory;
2. Be based solely on the independent value of the Actor’s technology to the licensee’s products and not on any strategic value stemming from control over essential means of accessing, exchanging, or using EHI; and
3. Not include the costs of developing intellectual property (IP), if the Actor has already recovered any such development costs under the Fees Exception.^[2]

3. All of the terms of the license must be non-discriminatory and must:

1. Be based on objective, verifiable criteria that are uniformly applied across similar classes of requestors and requests; and
2. NOT be based, in any part, on any anti-competitive interests (e.g., whether the requestor is a competitor) or on the revenue or other value the requestor may derive from the access, exchange, or use of EHI via the interoperability element(s).
3. The licensing terms must not require the licensee (or its agents or contractors) to do any of the following:

• Refrain from competing with the Actor in any product, service, or market
• Deal exclusively with the Actor in any product, service, or market
• Obtain additional licenses, products, or services that are unrelated to or can be unbundled from the interoperability elements requested
• License, grant, assign, or transfer any of the licensee’s intellectual property to the Actor
• Pay any type of fee, whatsoever, except the reasonably royalty described in #2, above, unless all of the requirements of the Fees Exception are satisfied

5. The Actor may require a reasonable non-disclosure agreement (NDA), if:

1. The NDA is no broader than necessary to prevent unauthorized disclosure of the Actor’s trade secrets;
2. The NDA states, with particularity, all information the Actor claims as trade secret(s); and
3. The information claimed as trade secret(s) in the NDA actually meets the definition of a trade secret under applicable law.

Additional Conditions

In addition to the Negotiating and Licensing Conditions above, the Actor must not engage in any Practice that has the purpose or effect of:

1. Impeding the efficient use of the interoperability element(s) to access, exchange, or use EHI for any permissible purpose;
2. Impeding the efficient development, distribution, deployment, or use of an interoperable product or service for which there is an actual or potential demand; andand/or
3. Degrading the performance or interoperability of the licensee’s products or services, unless necessary to improve the Actor’s technology AND only after having afforded the licensee a reasonable opportunity to update its technology to maintain interoperability.

UP NEXT …That concludes Gravely Group’s series summarizing the Information Blocking Exceptions, but that’s not all we have in store for our readers. Gravely Group has been working on a special Information Blocking Decision Tool that is designed to guide Actors, as well as other stakeholders impacted by the ONC Information Blocking Regulations, through a step-by-step Information Blocking analysis.

We will also continue to post summaries and other resources to the main Information Blocking Resource Page.

Keep checking back for new content!

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^[1] 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health Certification Program, 85 Fed. Reg. 25642, 25889 (May 1, 2020), available at: https://www.federalregister.gov/d/2020-07419 (italics in original).
^[2] Note, also: If an Actor licenses the interoperability element(s) through a standards-developing organization in accordance with that organization’s policies for licensing “standards-essential technologies,” on terms that are consistent with the requirements of the Licensing Exception, the actor may charge a royalty that is consistent with those policies.