European Parliament and EU government negotiators have reached an agreement on new legislation aimed at ensuring the availability of crisis-relevant products, such as vaccines or chips, during emergencies. The new rules will allow the EU to issue special permissions for the production of patent-protected goods without needing authorization from the rights-holder.
This special permission, known as a compulsory license, can be issued by the European Commission in clearly defined emergencies, such as cross-border health crises or internal market emergencies. It would only be used as a last resort when a voluntary agreement between rights-holders and licensees cannot be reached. The law will not apply to defense-related products. During this process, the Commission must identify all related intellectual property rights and their holders.
The regulation ensures that rights-holders are entitled to appropriate remuneration for their patents’ use by licensees. The amount and timeframe for payment will be determined by the Commission and specified in the compulsory license. Trade secrets disclosure is not required under this regulation.
The new rules also clarify obligations for licensees, including limits on production quantities and labeling requirements for products manufactured under compulsory licenses. Breaches of these obligations could result in fines up to €300,000, with smaller penalties for small or medium-sized enterprises.
An advisory body will provide non-binding opinions on granting EU compulsory licenses. Rights-holders and licensees will be consulted throughout the process and notified about any termination or expiry of a compulsory license.
Adrián Vázquez Lázara (EPP, ES), rapporteur of the Legal Affairs Committee, commented: “I am proud to see this regulation adopted. 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.”
Once formally approved by both Parliament and member states, the regulation will come into effect one day after its publication in the Official Journal.
The proposal was presented by the European Commission in April 2023 as part of efforts to complete the Single Market for patents following a call from a European Parliament resolution in November 2021.
