MEPs adopt new patent rules to ensure the supply of critical products in crises

EU license allowing other company to produce patent-protected products in emergencies

Covers public health crisis and internal market emergency

Guaranteed financial compensation for patent-holders

New rules aim to boost the EU’s technological sovereignty and competitiveness by securing access to key patent-protected products and technologies in emergency situations.

On Tuesday, Parliament adopted new rules ensuring that emergency products covered by patents and similar intellectual property protection mechanisms become immediately available to EU countries during crises.

For public health and internal market crises

Following a declaration of a cross-border health crisis or internal market emergency, the European Commission will be authorised to issue special permission allowing the production of vaccines and other crisis-relevant products by other companies than the patent-holder. The new law will not apply to defence products. An EU compulsory license can only be used as a last resort in situations when even voluntary agreements to use a protected invention could not ensure access to crisis-relevant products. The scope and duration of the compulsory license will have to be clearly defined and limited to ensure the adequate supply of crisis-relevant products in the EU.

Remuneration for patent owners and fines for obligation breaches

Patent owners will be entitled to compensation for the use of their intellectual property, and the amount and timeframe of payments will be specified in the compulsory license. The new law also ensures that trade secrets will remain protected. The licensee or company given permission to produce patent-protected products will have to clearly label them and only produce such amount as are necessary to ensure an adequate supply in the EU. The export of such goods will be prohibited. Should a licensee breach their obligations, the Commission will be able to impose a fine of up to €300,000, and in the case of small or medium-sized enterprise of up to €50,000.

Advisory body

The Commission will be assisted in this process by a competent advisory body which will help to identify all intellectual property rights covering the crisis-relevant product, the corresponding right holders as well as potential licensees, gather their opinions and expert views, and facilitate exchange of information.

Quote

Following the plenary vote, rapporteur of the Legal Affairs Committee Adrián Vázquez Lázara (EPP, ES) said: "Today’s vote in Strasbourg sends a strong political message: Parliament is ready to act in times of crisis. As the only patents package regulation to be adopted, this file shows our ability to build consensus. This regulation equips Europe with a necessary last-resort tool to ensure access to critical products when citizens need them most."

Next steps

The regulation will enter into force 20 days after its publication in the Official Journal.

Background

In response to a European Parliament resolution of November 2021, which called on the Commission to assess the possibility of introducing compulsory licencing at the EU level, the European Commission presented a proposal in April 2023. It is a part of the EU patent package focusing on completion of the Single Market for patents.