Compulsory licensing of industrial property rights – EU considers controversial mechanism

Consultation background and objectives

The aim of the public consultation is to gather information that can be used to make Member States’ legislation on the compulsory licensing of industrial property rights more uniform so that the European Union (“EU”) can respond in a more coordinated and standardized way during times of crisis.

Compulsory licenses for industrial property rights are instruments envisaged in most countries’ legislation on industrial property; however, this matter is yet to be legally standardized, even at an EU level.

Industrial property rights grant their holders exclusive rights over their subject-matter, which may or may not have a limited validity period. Patents, which are usually protected for 20 years—and may be extended for a further 5 years by supplementary protection certificates in the case of medicines and plant products, and for a further 6 months in the case of pediatric medicines—are the industrial property rights most susceptible to compulsory licensing, over which the patentholder has no say.

However, the application of this legal mechanism is so serious that it is fortunately very rare and is reserved strictly for times of crisis.

Unfortunately, there have been numerous crises in recent years. For example, during the COVID-19 pandemic, patents in the field of medicine (i.e., for vaccines, medicines and ventilator parts) were called into question and, in some cases, were subject to compulsory licensing. Consequently, against the will of patentholders, states—in the interest of public health—unilaterally decided to grant the use of patented inventions to third parties, remunerating patentholders in accordance with the applicable legal provisions of the state in question.

It must now be assessed whether this response to the COVID-19 pandemic was effective in terms of the compulsory patent licensing that Member States imposed and what can be done to improve it in the future.

> Consultation period and addressees

The European Commission has launched a public consultation inviting all stakeholders—such as national governments, citizens, large companies, and local industrial property offices—to provide their insights on this matter. These insights may include (i) analyzing each country’s national regime; (ii) providing specific proposals for creating a cohesive, fair and effective EU legal regime; (iii) giving warnings about the risk of this mechanism—which must always be used as a last resort—becoming trivialized in the future; and (iv) providing proposals for alternative mechanisms that would enable the same goals to be achieved differently.

The Commission will keep this public consultation open to all stakeholders until the end of September of this year.

> Presentation of consultation conclusions

To comply with the 2020 Intellectual Property Action Plan, the Commission must present the conclusions of this public consultation, together with the proposal for regulatory change, in 2023.