News - April 27, 2023

European Commission proposes EU-wide override of patents in emergencies 

In legislation put forward today, the Commission has proposed introducing a pan-EU compulsory license that could apply to products such as essential drugs in a future pandemic.

The European Commission published proposals to introduce a Union compulsory license for crises management and an EU-wide unitary SPC and a unified SPC grant procedure. The proposals form part of the ‘EU Patent Package’, outlined in the Commission’s 2020 Intellectual Property Action Plan. The Commission’s proposal on compulsory licensing includes a new Regulation and the introduction of new articles to Regulation (EC) No 816/2006, adding the possibility for the Commission to trigger a compulsory license that is applicable in the entire EU. The “last resort” mechanism would remove the need for individual member countries to issue a compulsory license on the EU level and is intended to be fully compliant with the international requirements laid down in the TRIPS Agreement.

The Regulation lays down the scope, legal basis and conditions for granting a Union compulsory license, including:

  • The trigger for the Commission to grant a Union compulsory license is defined as where a crisis mode or an emergency mode has been activated or declared.
  • The Union compulsory license extends to the following intellectual property (IP) rights in force in one or more Member States: Patents, including published patent applications, utility models or supplementary protection certificates.
  • The Commission shall grant the union compulsory license by means of an implementing act. The Commission will be required to give the rights-holder and licensee an opportunity to comment on the possibility to reach a voluntary licensing agreement, the need for a Union compulsory license and the conditions under which it is granted, including the amount of remuneration.
  • The compulsory license will be strictly limited to the relevant activities of crisis-relevant products in the EU, will only be granted against payment of an adequate remuneration to the rights-holder (to be determined by the Commission) and is limited to the territory of the EU. The export of products manufactured under a Union compulsory license is prohibited.

While the Commission’s main objective with this piece of the proposed legislation is to introduce a more efficient and coordinated system across the EU, it is another move towards further weakening the value of intellectual property rights. Together with the proposal on the revision of the general pharmaceutical legislation, it is another indicator that the development of an innovation-friendly environment is not a priority, contrary to statements in the Intellectual Property Action Plan.

The Commission’s proposal on EU-wide unitary supplementary protection certificates (SPC) and a unified SPC grant procedure includes a proposed new Regulation on unitary SPCs and recasting of Regulation (EC) No 469/2009 on SPCs for medicinal products. These proposals aim to address the inefficiencies that exist due to the inconsistencies between national procedures for granting SPCs and to address the concerns with transparency. The conditions for obtaining a unitary certificate are the same as those of the existing SPC regime, and the proposals do not amend the substantive elements of the current SPC regime.

The Commission also proposes to establish a centralised procedure for the granting of supplementary protection certificates (SPCs) for medicinal products, with amendments to Regulation (EC) No 469/2009. This is intended to allow applications to obtain SPCs in the designated Member States by filing a single “centralised SPC application” that would undergo a single centralised examination procedure. The filing of a centralised application is only possible on the basis of a European patent, including a unitary patent, and for products with a centralised marketing authorisation. When these conditions are met, a national application filed with a national competent authority will be rejected and only a centralised application is possible.

In our response to the IP Action Plan, EUCOPE has advocated for any EU-wide SPC to be optional to allow flexibility for owners to decide how to best obtain, utilise and enforce their IP rights and it is a positive that this flexibility is reflected in the Commission’s proposals. As a next step, these proposals will be subject to the Ordinary Legislative Procedure, with the European Parliament and Council examining the Commission proposals and adopting their positions.

For further information on this matter or to join EUCOPE’s IP advocacy efforts, please contact Matias Olsen.