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Compulsory licensing for crisis management and amending Regulation (EC) No 816/2006

TA-9-2024-0143 · P9_TA(2024)0143 · PE753.706

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Parliament's amended version of the proposed regulation on compulsory licensing for crisis management. It allows the Commission to grant a Union-wide compulsory licence for crisis-relevant products when no voluntary agreement is reached within four weeks, as a last resort during a listed crisis or emergency mode. The licence covers patents, published patent applications, utility models and supplementary protection certificates. It is non-exclusive, limited in scope and duration, and requires adequate remuneration to the rights-holder, capped at 4% of total gross revenue. The Commission is assisted by an advisory body, which may be the one set up under the relevant crisis mechanism or an ad hoc body. The rights-holder must be heard and may propose a voluntary agreement before a licence is granted. Products made under the licence are for the Union market only; export is prohibited. Customs authorities monitor and suspend suspected exports. The Commission can impose fines and periodic penalty payments for non-compliance. The regulation also amends Regulation (EC) No 816/2006 to allow a single Union compulsory licence for exporting pharmaceutical products to countries with public health problems, avoiding multiple national licences.

Key points

  1. A Union compulsory licence may be granted only if no voluntary agreement is reached within four weeks between the rights-holder and a potential licensee.
  2. The licence is a last resort, non-exclusive and non-assignable, limited to what is necessary for the crisis, and valid only for the duration of the crisis or emergency mode.
  3. The Commission must consult an advisory body, which can be the one from the relevant crisis mechanism or an ad hoc body composed of national authorities that grant compulsory licences.
  4. The rights-holder must be notified and given the opportunity to comment before a licence is granted, and may propose a voluntary agreement.
  5. The licence must specify the intellectual property rights, the licensee, the duration, the remuneration, and the crisis-relevant product, including its commodity code.
  6. Remuneration to the rights-holder is determined by the Commission and must not exceed 4% of the total gross revenue from the licensed activities.
  7. The licensee must label products as made under the licence, keep records, and ensure they are distinguishable from the rights-holder's products.
  8. Export of products made under the licence is prohibited; customs authorities must suspend suspected exports and notify the Commission.
  9. The Commission may require the disclosure of trade secrets strictly necessary for the licence's purpose, with safeguards for confidentiality and adequate compensation.
  10. Fines up to 6% of annual turnover and periodic penalty payments up to 5% of daily turnover can be imposed for non-compliance.
  11. Member States must notify the Commission of any national compulsory licences granted for crisis purposes.
  12. Regulation (EC) No 816/2006 is amended to allow a single Union compulsory licence for exporting pharmaceuticals to countries with public health problems.

Who is affected

  • Patent holders and holders of utility models or supplementary protection certificates may be subject to compulsory licensing without their consent.
  • Manufacturers and potential licensees can apply for a Union compulsory licence to produce crisis-relevant products.
  • Customs authorities are responsible for enforcing the export prohibition on products made under a Union compulsory licence.
  • Member States' national authorities that grant compulsory licences are involved in the advisory body and must report national licences.
  • Exporters of pharmaceutical products to countries with public health problems can benefit from a single Union licence instead of multiple national ones.

Figures and deadlines

  • 4 weeks for voluntary agreement negotiations before a compulsory licence can be granted.
  • 4% of total gross revenue as the maximum remuneration for the rights-holder.
  • 10 working days for the Commission to decide on suspended exports.
  • 6% of total turnover as the maximum fine for non-compliance.
  • 5% of average daily turnover as the maximum periodic penalty payment per day.
  • 5 years limitation period for imposing fines and periodic penalty payments.
  • 12 months maximum duration for an immediately applicable implementing act in urgent cases.
  • 30 days for prior negotiation efforts under Regulation (EC) No 816/2006.

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