Compulsory licensing of patents
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Summary
This initiative (COM(2023) 224; 2023/0129(COD)) proposes an EU-level framework for granting compulsory licences for patents in crisis situations, to ensure the availability of crisis-relevant products and technologies in the internal market. It sets out conditions, procedure and safeguards for issuing an EU compulsory licence, including remuneration for the patent holder and limits on scope and duration. The proposal is intended to complement (not replace) national compulsory licensing systems by providing a Union tool where cross-border supply needs arise in a crisis.
Who is affected?
Patent holders and other right holders whose protected inventions are needed for crisis-relevant products, and companies seeking to manufacture/supply those products under a compulsory licence. Member State authorities and the European Commission would be involved in triggering, granting, and supervising an EU compulsory licence under the proposed procedure.
Scope
Applies to the granting and operation of EU compulsory licences for patents (and related rights as defined in the final text) where necessary to address a crisis affecting the Union and to secure supply of crisis-relevant products across the internal market.
Key Points
- Creates a Union-level mechanism to grant compulsory licences in defined crisis contexts to address cross-border supply needs.
- Sets procedural steps and criteria (necessity, proportionality, last resort/availability of voluntary licensing, and defined scope/duration).
- Provides for remuneration/compensation to right holders and safeguards against misuse, including limits on quantities, territory and time.
- Envisages coordination with Member States and interaction with existing national compulsory licensing regimes.
- Includes provisions on transparency, monitoring, and termination/adjustment of the licence when crisis conditions change.
Key Deadlines
- — Commission proposal published
- — Committee referral announced in Parliament, 1st reading
- — Parliament ITRE committee involved
- — Referral to associated committees announced in Parliament
- — Vote in committee, 1st reading
- — Committee report tabled for plenary, 1st reading
- — Debate in Parliament
- — Parliament plenary vote, 1st reading
- — Committee referral announced in Parliament, 1st reading
- — Awaiting Council's 1st reading position
Related Regulations
Frequently Asked Questions
Who must comply with the proposed compulsory licensing of patents regulation?
Patent holders and other right holders whose inventions are needed for crisis-relevant products, as well as companies seeking to manufacture or supply such products under a compulsory licence, must comply. Member State authorities and the European Commission are also involved in the process.
What is the main purpose of this regulation?
The regulation aims to establish an EU-level framework for granting compulsory licences for patents in crisis situations, ensuring the availability and cross-border supply of crisis-relevant products and technologies within the internal market.
What situations trigger the use of an EU compulsory licence under this proposal?
An EU compulsory licence can be triggered in defined crisis contexts, such as public health emergencies or other significant disruptions, where voluntary licensing is insufficient to secure the supply of essential products or technologies across Member States.
How does this regulation interact with national compulsory licensing systems?
The EU compulsory licensing mechanism is intended to complement, not replace, national systems. It provides a Union-level tool specifically for cross-border supply needs during crises, coordinating with Member States to avoid duplication or conflict.
What are the key obligations for patent holders under this regulation?
Patent holders must allow the use of their protected inventions under the terms of an EU compulsory licence if granted, and are entitled to fair remuneration. They must also cooperate with authorities and licensees as required by the licence terms.
What procedural steps are involved in granting an EU compulsory licence?
The procedure involves an assessment of necessity, proportionality, and the exhaustion of voluntary licensing options. The Commission, in coordination with Member States, determines the scope, duration, and safeguards of the licence.
What safeguards are included to protect patent holders?
Safeguards include limits on the scope, quantity, territory, and duration of the licence, as well as requirements for adequate remuneration. There are also provisions to prevent misuse and to adjust or terminate the licence if crisis conditions change.
What penalties or consequences apply for non-compliance?
While the specific penalties will be detailed in the final regulation, non-compliance may result in enforcement actions by Member State authorities or the Commission, including possible withdrawal of the licence or legal sanctions.
How does the regulation ensure transparency and monitoring?
The regulation includes provisions for transparency in the granting and operation of compulsory licences, as well as ongoing monitoring and reporting requirements to ensure that the licence is used appropriately and only as long as necessary.
What practical steps should companies take to comply with this regulation?
Companies should monitor for relevant crisis declarations, assess their patent portfolios and supply chains for crisis-relevant products, and prepare to engage in voluntary licensing negotiations. They should also establish processes to respond promptly to compulsory licensing procedures if triggered.
Key Terms
- Compulsory Licence
- A legal authorization granted by a public authority allowing a party to use a patented invention without the consent of the patent holder, under specific conditions.
- Crisis-Relevant Products
- Goods or technologies deemed essential to address a crisis affecting the Union, such as medical supplies during a health emergency.
- Remuneration
- Fair compensation paid to the patent holder for the use of their invention under a compulsory licence.
- Proportionality
- A principle requiring that the scope and impact of the compulsory licence are limited to what is strictly necessary to address the crisis.
- Voluntary Licensing
- The process by which a patent holder agrees to license their rights to others through negotiation, prior to any compulsory measures.
- Scope and Duration
- The defined limits of a compulsory licence, specifying which products, territories, quantities, and timeframes are covered.
- Safeguards
- Measures built into the regulation to protect the interests of patent holders and prevent misuse of compulsory licences.
- Cross-Border Supply
- The distribution of crisis-relevant products across multiple EU Member States, which may necessitate an EU-level compulsory licence.
- Monitoring and Reporting
- Ongoing oversight and documentation of the use and impact of compulsory licences to ensure compliance and appropriateness.
- Termination/Adjustment
- Procedures for ending or modifying a compulsory licence when the crisis situation changes or the licence is no longer justified.