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REPORT (COM(2023)0224 – C90151/2023 – 2023/0129(COD))

On the proposal for a regulation of the European Parliament and of the Council on compulsory licensing for crisis management and amending Regulation (EC) 816/2006

A-9-2024-0042

Committee on Legal Affairs · Rapporteur: Adrián Vázquez Lázara

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Parliament's amended version of the proposed regulation on compulsory licensing for crisis management sets rules for granting Union compulsory licences as a last resort when no voluntary agreement is reached within four weeks, covering crisis-relevant products in cross-border crises. It requires the Commission to identify rights-holders before granting a licence, allows trade secret disclosure when strictly necessary, and sets remuneration based on total gross revenue without a fixed cap. It also amends Regulation (EC) 816/2006 to streamline compulsory licensing for export to countries with public health problems.

Committee position. The Committee on Legal Affairs proposes amendments to the Commission proposal, focusing on last-resort licensing, rights-holder identification, trade secret disclosure, and judicial review.

Key points

  1. A Union compulsory licence may be granted only if no voluntary agreement is reached within four weeks between rights-holder and potential licensee.
  2. The licence must be strictly limited in scope, duration, and territory, and must not exceed the duration of the crisis or emergency mode, in principle not exceeding 12 months unless renewed.
  3. The Commission must identify all applicable intellectual property rights and rights-holders before granting the licence; it cannot grant a licence without identifying them.
  4. The rights-holder must be given an opportunity to comment and negotiate a voluntary agreement before a licence is granted.
  5. The advisory body must include representatives of national authorities responsible for compulsory licensing and may invite Parliament observers.
  6. Remuneration is determined based on total gross revenue and other factors, without a fixed maximum percentage.
  7. The Commission may order disclosure of trade secrets strictly necessary for the licence's purpose, with safeguards for confidentiality and adequate compensation.
  8. Licensees must keep detailed accounts, maintain confidentiality of trade secrets, and avoid using them beyond the licence's scope or duration.
  9. The Commission may impose fines and periodic penalty payments for non-compliance, and the Court of Justice has unlimited jurisdiction to review licensing decisions and penalties.
  10. Member States must notify the Commission of national compulsory licences granted for public interest or national crisis.
  11. Regulation (EC) 816/2006 is amended to require applicants to indicate multiple applications, provide evidence of prior negotiation, and allow authorities to request proof of exportation.
  12. The Commission must assess the Annex listing crisis mechanisms every two years and propose updates if needed.

Who is affected

  • Rights-holders of patents and other intellectual property: may be subject to compulsory licences and ordered to disclose trade secrets, with compensation.
  • Potential licensees: may obtain compulsory licences to manufacture crisis-relevant products, but must comply with strict conditions and confidentiality.
  • Member States: must notify the Commission of national compulsory licences and may be involved in advisory bodies.
  • Importing countries with public health problems: benefit from streamlined compulsory licensing for export under amended Regulation (EC) 816/2006.

Figures and deadlines

  • four weeks: period for voluntary agreement negotiations before a compulsory licence may be granted.
  • 12 months: maximum duration of a compulsory licence in principle, unless renewed.
  • thirty days: period for efforts to obtain authorisation before applying for a compulsory licence under Regulation (EC) 816/2006.
  • two years: interval for Commission assessment of the Annex.
  • twelve months: period after entry into force before the regulation applies.

Legal basis: Articles 114 and 207 of the Treaty on the Functioning of the European Union