Revised EU framework for compulsory licensing of patents – EU Commission opens call for evidence for impact assessment

European Union April 4 2022

The EU Commission has today (1 April 2022) opened a call for evidence for an impact assessment on its proposals to revise the framework for compulsory licensing of patents. The deadline for responses is midnight Brussels time on 29 April 2022. The call for evidence document is available here, and the feedback portal is accessible here.

As explained in the call for evidence, the EU is concerned about the impact of the “fragmented compulsory licensing framework” on its ability to respond to future global or EU-wide crises of health, environmental, nuclear, or industrial nature. As part of its IP action plan, the Commission is therefore examining possible initiatives regarding compulsory licensing (alongside other patent-related harmonization initiatives relating to supplementary protection certificates and standard-essential patents).

The general objective is said to be “to create a compulsory licensing system in the EU that would be less fragmented and better-suited for EU-wide crises”, and to achieve that objective the Commission is considering three broad options:

(a) no policy change;

(b) non-legislative measures (e.g. guidelines and recommendations for granting compulsory licences in times of crises at the national level, improving coordination of how national compulsory licences are issued); and

(c) legislative changes, such as (i) creating an EU coordination mechanism for compulsory licensing in times of crisis; (ii) establishing an EU-level compulsory license for use in a crisis; and (iii) streamlining compulsory licensing for export purposes for pharmaceutical products.

The Commission could also plan a combination of non-legislative and legislative measures.

As noted by the Commission, the proposals will affect IP rights holders, the public, and public authorities. There is, however, little systematic evidence on compulsory licensing because it has rarely been used and so, in addition to this call for evidence – which itself “aims to gather views, opinions, and evidence from all public and private sector stakeholders” – a study has been launched to support the impact assessment and collect data through a range of mechanisms.

In the call for evidence document, the EU Commission has been careful to acknowledge that compulsory licensing may have a significant impact on IP holders, and so should remain an “exceptional, last-resort measure, applicable in case of failure of voluntary agreements”. Its aim is for the initiative not to lead to higher burdens or risks for patent holders, “but rather a more convergent, predictable and workable regime in the exceptional cases where recourse to compulsory licensing at EU scale is necessary”. It will be interesting to see how the proposals develop to hopefully achieve that aim.

Currently, legislation on compulsory licensing of patents is fragmented in the EU. EU countries regulate their own compulsory licensing schemes even though many value chains operate across the EU. This can be a source of legal uncertainty, for both right holders and users of IP rights, as the conditions and procedures of such licences (e.g. duration, scope or licence fee setting) can vary from one country to another. In an EU-wide crisis, this can be particularly problematic. A fragmented compulsory licensing framework might not be efficient enough to tackle a crisis (e.g. cross-border production and distribution of complex products such as vaccines).

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