The European Parliament and EU government negotiators have reached agreement on new legislation ensuring availability of crisis-relevant products, such as vaccines or chips, during emergencies.
The new rules will ensure the EU is able to secure necessary supply of crisis-relevant products and technologies that are otherwise protected by patents.
The new bill was welcomed by Parliament’s rapporteur Adrian Vazquez MEP: “It strikes a crucial balance between protecting intellectual property rights and ensuring that, in times of crisis, essential technologies and products can be made available swiftly across the Union.”
The legislation means the EU will be able to issue special permission for the production of patent-protected goods during cross-border emergencies, without needing the authorisation of the rights-holder. This would allow the immediate production, for example, of vaccines or therapeutics also by other companies than the one holding the patent.
This special permission, known as compulsory license, can be issued by the European Commission in clearly defined emergencies, such as a cross-border health crisis or internal market emergency, with specified scope, territorial coverage and duration. It would be used only as a last resort and only in cases where a voluntary agreement between rights-holder and licensee could not be reached. The new law will not apply to defence-related products. In the process of launching the compulsory license procedure, the Commission will have to identify all related intellectual property rights and their holders.
The rights-holder would also be entitled to appropriate remuneration for the use of their patent by the licensee. The amount and timeframe for payment would be determined by the Commission and specified in the compulsory license. The regulation does not require the disclosure of trade secrets.
The new rules also clarify obligations for licensees, e.g. not to produce more products than a set maximum amount and to label the products manufactured under compulsory license. Should a licensee breach the agreed obligations, such as producing more products than allowed or exporting them from the EU, the Commission can impose a fine not exceeding €300,000 and in the case of small or medium-sized enterprise not exceeding €50,000.
A competent advisory body, or if such an organisation does not exist, an ad-hoc advisory body will issue its non-binding opinion on the need to grant an EU compulsory license. Rights-holders and licensees will also be consulted during the process and notified of the termination or expiry of a compulsory license.
