COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on compulsory licensing for crisis management and amending Regulation (EC) 816/2006

EN EN
EUROPEAN
COMMISSION
Brussels, 27.4.2023
SWD(2023) 121 final
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the document
Proposal for a Regulation of the European Parliament and of the Council
on compulsory licensing for crisis management and amending Regulation (EC) 816/2006
{COM(2023) 224 final} - {SEC(2023) 173 final} - {SWD(2023) 120 final} -
{SWD(2023) 122 final}
Offentligt
KOM (2023) 0224 - SWD-dokument
Europaudvalget 2023
1
Table of contents
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT............................................................... 4
1.1 The political context.................................................................................................................. 4
1.2 The legal context ....................................................................................................................... 6
1.3 Compulsory licence as an incentive or replacement of voluntary agreements .......................... 7
2 PROBLEM DEFINITION .................................................................................................................... 8
2.1 What is the problem?................................................................................................................. 8
2.2 Drivers of the problem ............................................................................................................ 11
2.2.1 Divergent national schemes on compulsory licensing........................................................12
2.2.2 Inadequate territorial reach of compulsory licensing..........................................................16
2.2.3 No dedicated forums to deal with compulsory licensing that could bolster EU resilience in
times of crisis ......................................................................................................................................18
2.3 Consequences of the problem.................................................................................................. 19
2.4 How likely is the problem to persist? ...................................................................................... 20
3 WHY SHOULD THE EU ACT? ........................................................................................................ 21
3.1 Legal basis............................................................................................................................... 21
3.2 Subsidiarity: Necessity of EU action....................................................................................... 21
3.3 Subsidiarity: Added value of EU action.................................................................................. 21
4 OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 22
4.1 General objectives................................................................................................................... 22
4.2 Specific objectives................................................................................................................... 22
5 WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 23
5.1 What is the baseline from which options are assessed? .......................................................... 23
5.2 Description of the policy options ............................................................................................ 24
5.2.1 Option 1: Recommendation on compulsory licensing for crisis management....................27
5.2.2 Option 2: Harmonisation of national laws on compulsory licensing for crisis management
28
5.2.3 Option 3: Harmonisation plus a binding EU-level measure on compulsory licensing for
crisis management...............................................................................................................................29
5.2.4 Option 4: EU-level compulsory licensing to complement existing EU crisis instruments .31
5.3 Discarded options.................................................................................................................... 33
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 34
6.1 Option 1 – Recommendation on compulsory licensing for crisis management ...................... 34
6.1.1 Improve the key features of compulsory licensing.............................................................34
6.1.2 Territorial reach of compulsory licensing...........................................................................34
6.1.3 Support to EU resilience.....................................................................................................34
6.1.4 Impacts per stakeholder group............................................................................................35
6.2 Option 2 – Harmonisation of national laws on compulsory licensing for crisis
management ............................................................................................................................ 36
6.2.1 Improve the key features of compulsory licensing.............................................................36
6.2.2 Territorial reach of compulsory licensing...........................................................................36
2
6.2.3 Support to EU resilience.....................................................................................................36
6.2.4 Impacts per stakeholder group............................................................................................37
6.3 Option 3 – Harmonisation plus a binding EU-level measure on compulsory licensing .......... 38
6.3.1 Improve the key features of compulsory licensing.............................................................38
6.3.2 Territorial reach of compulsory licensing...........................................................................38
6.3.3 Support to EU resilience.....................................................................................................38
6.3.4 Impacts per stakeholder group............................................................................................39
6.4 Option 4 – EU-level compulsory licensing to complement existing EU crisis
instruments .............................................................................................................................. 40
6.4.1 Improve the key features of compulsory licensing.............................................................40
6.4.2 Territorial reach of compulsory licensing...........................................................................40
6.4.3 Support to EU resilience.....................................................................................................41
6.4.4 Impacts per stakeholder group............................................................................................41
6.5 Common impacts..................................................................................................................... 42
6.5.1 Impacts on fundamental rights ...........................................................................................42
6.5.2 Social and environmental impacts......................................................................................43
6.5.3 Economic and competitiveness impacts .............................................................................44
6.5.4 Summary of cost and benefits specific to the compulsory licensing procedures................45
7 HOW DO THE OPTIONS COMPARE?............................................................................................ 47
7.1 Comparison of options against the effectiveness and efficiency criteria................................. 47
7.2 Comparison of impacts of options on stakeholders................................................................. 49
7.3 Coherence with other EU policies and proportionality ........................................................... 50
8 PREFERRED OPTION ...................................................................................................................... 51
8.1 REFIT and the application of the ‘one in, one out’ approach.................................................. 53
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 53
ANNEX 1: PROCEDURAL INFORMATION............................................................................................ 55
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT)................................................ 57
ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 68
ANNEX 4: ANALYTICAL METHODS ..................................................................................................... 72
ANNEX 5: LEGAL BACKGROUND AND THE KEY LEGAL PROVISIONS ....................................... 78
ANNEX 6: SUPPLEMENTARY EVIDENCE ............................................................................................ 87
ANNEX 7: SUPPLEMENTARY LEGAL ANALYSIS: THE PRINCIPLE OF EXHAUSTION IN
THE SINGLE MARKET.................................................................................................................. 135
ANNEX 8: SME TEST .............................................................................................................................. 138
3
Glossary
Term or acronym Meaning or definition
Charter EU Charter of fundamental rights
CJEU Court of Justice of the European Union.
CL Compulsory licence
Doha Declaration WTO Declaration on the TRIPS agreement and public health
adopted on 14 November 2001
EC The European Commission
EPO European Patent Office
EU cross-border crisis Crisis affecting more than one EU country
HERA Health Emergency Preparedness and Response
IP Intellectual property
NGO Non-governmental organisation
OPC Open public consultation
RDP Regulatory data protection
SCBTH Serious cross-border threats to health
Single Market The EU single market covering EU 27 Member States
SME Small or medium-sized enterprise(s)
SMEI Single Market Emergency Instrument
SPC Supplementary protection certificates
TFEU Treaty on the Functioning of the European Union
TRIPS Agreement Agreement of the World Trade Organization (WTO) on Trade-
Related Aspects of Intellectual Property Rights
WHO World Health Organization
WIPO World Intellectual Property Organization
WTO World Trade Organization
Country codes used in the text:
AT - Austria
BE - Belgium
BG - Bulgaria
DE - Germany
DK - Denmark
CY - Cyprus
CZ - Czechia
EE – Estonia
FI - Finland
FR- France
EL - Greece
HR - Croatia
HU - Hungary
IE - Ireland
IT - Italy
LV - Latvia
LT - Lithuania
LU - Luxembourg
MT - Malta
NL – Netherlands, the
PL - Poland
PT - Portugal
RO - Romania
SK - Slovakia
SI – Slovenia
ES - Spain
SE - Sweden
4
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT
1.1 The political context
Intellectual property (‘IP’) rights, and in particular patents, are powerful tools in support
of EU innovation and the EU economic transition objectives. Patents are exclusive rights
protecting inventions. They are an important asset for inventors as they can ensure
investments and access to finance1
.
The balance between IP rights and other rights and interests has continuously been
discussed and reassessed amid societal changes, technological developments, and crises.
It is therefore not surprising that the COVID-19 crisis brought this issue once more into
the spotlight. On that occasion, the conflicting interests were on the one hand, access to
health products, and on the other hand preserving innovation incentives that are key to
the development of new health products, such as vaccines and therapeutics. However, the
pandemics also added another element to the discussion, notably on the role IP rights
could and should play in a crisis. In other words, the question was how we can preserve
the balance and incentives for innovation while ensuring swift access to critical products2
and technologies in crises. Replies differed among countries in the world.
In October 2020, several World Trade Organisation (‘WTO’) members submitted a
proposal to waive WTO members’ obligation to protect and enforce some IP rights in
relation to the prevention, containment or treatment of COVID-19. Waiving IP rights
differs from compulsory licensing. A compulsory licence (‘CL’) is an authorisation
granted by a government to a party other than the patent holder to use a patented
invention without the consent of the patent holder. The Agreement on Trade-Related
Aspects of Intellectual Property Rights (‘TRIPS Agreement’) explicitly allows
compulsory licensing, provided that some conditions, such as a limited duration and the
payment of an adequate remuneration, are met. There is no mechanism in the TRIPS
Agreement or in domestic systems of the WTO members to waive IP rights3
. The EU,
among other WTO members, did not support waiving TRIPS obligations that could result
in the suspension of IP rights in relation to COVID-19 products. There was no evidence
that IP was a barrier in the production and distribution of these products. The EU also
considered that, should voluntary agreements fail, the TRIPS Agreement already
provides for solutions through the existing flexibilities and, in particular, compulsory
licensing4
.
1
Patent applications must be published and indicate the technical details of the invention they aim at
protecting. The granting of a monopoly – limited in time – is done in exchange of sharing the technicalities
underlying the invention, based on which new research and invention can develop. This is part of the
inherent equilibrium of patent law; allowing at the same time incentive to innovate and access to
innovation.
2
In this impact assessment the notion of critical good(s)/ products(s) refers to good(s)/ product(s) that are
critical to tackle a crisis, notwithstanding the type of crisis that is being discussed.
3
Waiving IP rights would potentially consist of depriving the patent owner of its rights from the outset,
including of the right to adequate remuneration.
4
Discussions at WTO level led to a Ministerial Decision in June 2022, which provided clarifications of
existing flexibilities and waived one of the conditions for the production of COVID-19 vaccines, namely
the requirement that a CL is granted “predominantly for the domestic market”. It also waived the
application of Article 31bis of the TRIPS Agreement which provides for a specific procedure applicable to
export. This means that COVID-19 vaccines manufactured under a CL issued under the Decision can be
5
In that context, the Commission IP Action Plan5
of 2020 underlined ‘the need to ensure
that effective systems for issuing compulsory licences are in place’. The Commission
undertook to ‘explore with Member States the possibility of creating an emergency co-
ordination mechanism, to be triggered at short notice when Member States consider
issuing a compulsory licence’. Finally, the 2023 Commission Work Programme6
provides that the Commission will establish clear rules for the compulsory licensing of
patents.
In its resolution of November 20217
, the European Parliament called on the
Commission ‘to analyse and explore possible options for ensuring effectiveness and
better coordination of compulsory licensing in the EU. The Council8
confirmed that the
EU stood ready to discuss the flexibilities of compulsory licensing for the domestic
market and export purposes to third (non-EU) countries9
. It also confirmed the need to
explore possible IP tools and options to better coordinate the management of cross-
border crises. At the same time, the Commission announced its willingness to table
proposals to ensure the EU’s resilience to crises and new mechanisms to guarantee well-
functioning supply chains in the Single Market and abroad. In that respect, reference can
be made to two key EU proposals:
 Proposal for a regulation establishing a Single Market emergency instrument10
(‘SMEI’);
 In the context of the setting-up of HERA, the regulation on serious cross-border
threats to health11
(‘SCBTH’) and the regulation on a framework of measures for
ensuring the supply of crisis-relevant medical countermeasures in the event of a
public health emergency at Union level (‘HERA’)12
.
These proposals qualify as crisis instruments, setting-up emergency mechanisms to
ensure the supply of and access to critical goods notably in the Single Market. Other
instruments, such as the Chips Act13
, also include crisis measures. None of the above
instruments explicitly includes the use of compulsory licensing to address a crisis. The
rationale was that IP rights apply across sectors in a uniform way. Yet, EU crisis
instruments rarely apply to all sectors. For instance, despite a large material scope, the
SMEI proposal does not apply to the health sector. Embedding compulsory licensing in
(sector-specific) EU crisis instruments would run the risk of creating different rules on
exported to other eligible countries in a much faster and simplified manner. Discussions are still ongoing as
regards possible extension of the Decision to COVID-19 therapeutics and diagnostics (see Annex 5C).
5
IP action plan, COM(2020) 760 final, 25.11.2020.
6
Commission Work programme of 2023, available here.
7
The resolution on the intellectual property action plan to support the EU’s recovery and resilience
(2021/2007(INI)).
8
Council conclusions8
of 18 June 2021, available here.
9
Where reference is made hereinafter to exports to third countries or non-EU countries, this refers to third
countries covered by Regulation (EC) No 816/2006.
10
Proposal for a regulation of the European Parliament and of the Council establishing a Single Market
emergency instrument and repealing Council Regulation No (EC) 2679/98.
11
Regulation (EU) 2022/2371 of 23 November 2022 on serious cross-border threats to health and repealing
Decision No 1082/2013/EU.
12
Council Regulation (EU) 2022/2372 of 24 October 2022 on a framework of measures for ensuring the
supply of crisis-relevant medical countermeasures in the event of a public health emergency at Union level.
13
Proposal for a regulation establishing a framework of measures for strengthening Europe's
semiconductor ecosystem (Chips Act).
6
compulsory licensing across domains. Nevertheless, this initiative would be closely
linked to crisis instruments as to ensure they are fully coherent and complementary.
Finally, this initiative complements the launch of the Unitary Patent system (expected
in June 2023). The Unitary Patent is a major step towards the completion of the Single
Market for patents and an EU-level compulsory licence is part of this harmonisation
coordinated effort. Against this backdrop of the increasing completion of the Single
Market for patents, the envisaged initiative on compulsory licensing is therefore at the
crossroads between the different EU crisis instruments and the international obligations
and discussions on IP rights and compulsory licensing.
1.2 The legal context
A compulsory licence14
refers to the possibility for a government to allow a third party to
use a patent without the authorisation of the right holder, subject to certain conditions
aiming at preserving the legitimate interests of the patent holders. The TRIPS Agreement
sets the international legal obligations as regards compulsory licensing. It provides two
types of compulsory licensing schemes: (i) compulsory licensing for the domestic market
(article 31), which applies to all types of products and (ii) compulsory licensing for the
export, which only applies to pharmaceutical products (article 31bis).
Article 31 allows the granting of a compulsory licence, for any type of product. In this
context, the compulsory licence must be predominantly for the supply of the domestic
market of the WTO Member authorising the use. The TRIPS Agreement does not list
the grounds on which a compulsory licence can be granted but provides several
conditions under which a compulsory licence can be authorised (see Annex 5D). As for
the EU legal context, there is no harmonisation of compulsory licensing for the domestic
market, including as regards European patents with a unitary effect15
. EU countries have
all implemented compulsory licensing schemes but for different grounds and following
different procedures, in accordance with the flexibilities left at international level.
Under Article 31bis of the TRIPS Agreement, a country can grant a compulsory licence
to the extent necessary for the purposes of production and the export of a
pharmaceutical product. The EU implemented this new disposition in its legal order
through the adoption of regulation (EC) No 816/200616
. The EU may only act as an
exporter to the countries with no or limited manufacturing capacity. The mechanism
under Article 31bis of the TRIPS Agreement was only used once, in the Canada-Rwanda
case (see Annex 5F). In the context of Regulation (EC) No 816/2006, EU countries
remain the main points of contacts for granting the compulsory licence, checking whether
the conditions are respected and when it is terminated. The role of the Commission
remains limited to the case where the export of the product under a compulsory licence
would be directed to an importing country which is not a WTO member. In such case, the
14
The term “compulsory licence” is found in national patent laws but not in the TRIPS Agreement where
article 31 refers to the “use [of patents] without authorization of the right holder”.
15
Recital 10 of Regulation EU No 1257/2012 of 17 December 2012 implementing enhanced cooperation in
the area of the creation of unitary patent protection provides that: “compulsory licences for European
patents with unitary effect should be governed by the laws of the participating Member States as regards
their respective territories.”
16
Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on
compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to
countries with public health problems.
7
importing country must make a notification to the Commission instead of the WTO.
Regulation (EC) No 816/2006 was never used nor evaluated.
Two other EU legislations provide for a compulsory licensing scheme. First, the
Regulation on Community plant variety rights17
provides for the possibility for the
Community Plant Variety Office to grant a compulsory licence on a community plant
variety right, on application by a Member State, by the Commission or by an
organisation set up EU level18
. Second, the Biotech Directive19
provides for the
possibility, where a plant breeder cannot use a plant variety without infringing a patent,
to apply for a compulsory licence.
1.3 Compulsory licence as an incentive or replacement of voluntary agreements
Compulsory licensing is often presented as a ‘last resort mechanism’20
. In the vast
majority of cases, voluntary agreements are the most efficient solution to ensure the
manufacturing and supply of critical products. Stakeholders generally highlight the
importance of voluntary agreements to scale-up the manufacturing of critical products. A
large majority of respondents to the public consultation (74%, N=55) also considered that
compulsory licensing is a last-resort mechanism that should be available only where
voluntary arrangements have failed or are unavailable21
. However, when voluntary
agreements are not available, be it because such agreements do not offer a viable solution
to address a crisis in a timely22
or adequate23
manner or because the IP owner is not
willing to voluntarily license its rights, compulsory licence can have an:
 incentive role: The threat of a compulsory licence can incentivise the IP owner to
grant a voluntary agreement, in particular when the IP owner has refused the
licensing or the proposed conditions;
 enabling role: Should voluntary agreements still not be available or adequate to
address the crisis and should another manufacturer be able to produce and deliver
17
Plant variety rights cover varieties of all botanical genera and species that are distinct, uniform, stable,
and new. In addition, the variety must be designated by a denomination in accordance with the provisions
of Article 63 of Regulation No 2100/94 of 27 July 1994 on Community plant variety right. Regulation No
2100/94 of 27 July 1994 on Community plant variety right.
18
Article 29 of Regulation No 2100/94. A compulsory exploitation of rights shall be granted on grounds of
public interest. Three grounds in particular can constitute a public interest: a) the protection of life or health
of humans, animals and plants; b) the need to supply the market with material offering specific features; c)
the need to maintain the incentive for continued breeding of improved varieties (see Article 41(2) of the
Commission Regulation (EC) No 874/2009). An application for a compulsory licence was submitted to the
Community Plant Variety Office in March 2017 but ultimately denies as the ground of public interest was
not proven (see Decision of the Community Plant Variety Office of 28 March 2018, no. NCL001).
19
Article 12 of Directive 98/44/EC of 6 July 1998 on the legal protection of biotechnological inventions.
20
Article 31 of the TRIPS Agreement requires that efforts must be made to obtain authorisation from the
right holder on reasonable terms and conditions and that such efforts proved unsuccessful. However, there
are no specific rules on what those terms and conditions are or what type and length of efforts are required.
Also, this requirement can be waived in “the case of a national emergency or other circumstances of
extreme urgency or in cases of public non-commercial use”.
21
However, views on this issue are contrasted among stakeholders: although all (4) public authorities and
almost all companies and business association (85%, N=34) agreed with the last resort approach, 4 out of 6
NGOs having replied to the public consultation disagreed.
22
E.g. when the voluntary agreement would not ensure the manufacturing and delivery of the critical goods
in a timely manner (e.g. several months or years depending on the nature of the crisis).
23
E.g. when the voluntary agreements would not ensure a sufficient production of critical goods to tackle
the crisis.
8
the goods to tackle the crisis, the public authority could decide to grant to this
manufacturer a compulsory licence allowing/ ramping up production capacity.
These roles can only be fulfilled where there is an efficient, credible, and flexible
compulsory licensing scheme in place.
2 PROBLEM DEFINITION
2.1 What is the problem?
When a crisis strikes and the solution lies in using a certain product or technology, this
product or technology may be protected by IP rights, for example by patents24
. As more
than 100 000 new patents are granted by the European Patent Office (‘EPO’) alone every
year25
, there are high chances that an innovative technology needed in crisis could be
patent protected. Public authorities willing to rely on such product and/or technology
need to secure the IP rights by seeking an agreement with the patent holder26
(e.g. in case
of the European Patents (‘EP’) among roughly 103 000 companies27
). Yet, voluntary
solutions may not always be available nor adequate, in particular in the context of a
crisis, when patent-protected products should be accessible under tight time constraints.
The need to resort to a compulsory licence in a crisis is supported (82%, N=61) by
stakeholders who participated in the open public consultation (‘OPC’) run within the
context of this initiative (see Figure 1)28
.
Figure 1: Do you consider it important that public authorities are entitled to allow production of certain products
and/or use of certain technologies necessary to tackle a crisis through a compulsory licence?
Source: OPC, N=74
However, the current settings of the compulsory licensing system in the EU make this
legal instrument unfit to address cross-border crisis29
, in a timely manner. This is because
24
Vaccines and therapeutics provide a good example of the importance of patented inventions as a solution
to address a crisis, as illustrated by the COVID-19 crisis.
25
Patent Index 2021 – Statistics at glance, EPO 2022, status: 1.2.2022, page 8.
26
Or entering into a manufacturing and purchase agreement with the patent owner, or ensuring the
conclusion of a licensing agreement, allowing a licensee to manufacture the critical goods or using the
critical technology.
27
Based on PatentSight® query of all patents active in EPO (“active in” understood as the authority in
which at least one member of the patent family is active; this includes both pending applications that are
still under prosecution and granted patents that are still in force) that resulted in 103 052 unique owners.
The analysis was based on 525 329 patent families active at 12/08/2022.
28
This is true for all groups of stakeholders. For instance, 72.5% (N=29) of the companies and business
associations, all NGOs, all citizens and three out of four public authorities agree.
9
EU compulsory licensing schemes have territorial limitations and are based on a
patchwork of national laws that makes a coordinated and timely implementation of
compulsory licences practically impossible.
This can be illustrated by a crisis striking several Member States, but where
manufacturing capacities for the critical product are in other Member States. In such
case, each step of the manufacturing process where IP rights are involved, should be
authorised by the patent owner, usually through a licensing agreement, or - in the absence
of voluntary agreements – a compulsory license. However, such compulsory licence is
needed for each Member State and for each IP relevant step (be it manufacturing,
exporting or importing). In case of an EU cross-border crisis, the issuance of multiple
national compulsory licences with e.g. different scope (e.g. covering different patents
and/or different products), procedures and conditions30
would be necessary. In addition,
great uncertainties would remain as to whether it can be exported from one Member State
to another Member State and in what quantities. Finally, depending on the national
procedures and conditions, these compulsory licences could be granted and implemented
at different times (see section 2.2.1 below).
In a hypothetical example under the current rules, if two Member States needed a product
manufactured in another two Member States, four compulsory licences might be need to
secure access to such product (i.e. two compulsory licences to export and two
compulsory licences to import). As shown in Figure 2, the number of compulsory
licences needed for five countries in crisis with manufacturing capacities spread over five
other countries, could reach ten31
.
Figure 2: Hypothetical number of compulsory licences needed for a patented product, depending on the number of
manufacturing and importing Member States (up to 5 and 5 Member States only, respectively)
Source: own elaborations
The above example might seem excessive (up to ten compulsory licences needed for a
single product), yet it is likely to occur in practice. The average number of Member
States in which European Patents for COVID-related products32
were active equals 5.18,
whereas for all patents the intra-EU geographic spread was 4.35 (Member States)33
. This
29
The terms „a cross-border crisis” or „a crisis affecting the Single Market” will be used interchangeably.
30
Additional explanation and illustrative examples are provided in Figure 15 and Figure 16 in Annex 6.
31
The scenario assumes a CL per country. In practice, the numbers may be lower if some of the importing
countries were able to manufacture the necessary components, or higher if some additional CLs were
necessary between the manufacturing countries, for example for other items necessary in production.
32
Based on WIPO PatentScope COVID-19 Index (https://patentscope.wipo.int/search/en/covid19.jsf)
33
The results of the analysis by selected IPC groups and subgroups are presented in Table 18 (Annex 6).
For further details on the methodology, please see Annex 4.
10
means that licensing of patent rights for a given product in the EU might require a
coordinated action among four to five Member States.
The number of patents active in several countries are not the only element to be
considered. Additionally, multi-step value chains are predominant nowadays across
nearly all industries. The Single Market in particular is based on complex cross-border
supply chains, as products are increasingly manufactured across several Member
States34
. For example, in 2021, the share of intra-EU exports for most Member States
was between 50 % and 75 % - it exceeded 75 % in HU (78 %), SK, CZ (both 80 %) and
LU (81 %). Only in CY (27 %), IE (38 %) and MT (49 %) was the share of intra-EU
exports lower than 50 %35
. In absolute terms, the value of exported goods by Member
State to partners within the EU in 2021 ranged from EUR 751 billion for DE to EUR 0.9
billion for CY (Figure 17, Annex 6)36
. In view of the multi-dimensional links governing
the existing value chains, it is highly probable that national compulsory licences would
be needed not only for the final patented product, but also for any patented component37
of the final product that may need to be sourced from other country. For example, the
share of parts and components accounts for 50% of global trade in electrical machinery
and transport equipment and 46% of trade in machinery and electronics. Over time, it is
also worth noting that the importance of the Single Market has increased as a source of
value added (supply and demand) in the area of goods. On the supply side (Figure 3,
left), the contribution of domestic flows (i.e. within a single Member State) as source of
value added in EU production has been constantly decreasing, whereas the relative
importance of cross-border trade flows of industrial goods within the Single Market has
slightly increased. Today, Single Market flows account for more than 25% of the total
value added of EU production. A similar picture can be seen on the demand side (Figure
3, right). The relative contribution of domestic flows in terms of final demand to absorb
and pay for the total value added produced in the EU has been decreasing, while the
importance of the Single Market has increased.
Figure 3: Relative shares of the Single Market as a Source of Value Added (left) and of Final Demand (right) (goods,
1995-2018)
34
For pharmaceutical products, see: Pharma supply chains of the future, EY 2022, Figure 1, p. 2 that
depicts complex multi-country value chain of a medicinal product based on the following stages: 1. Active
pharmaceutical ingredient manufacturing, 2. Formulation, 3. Primary packaging, 4. Secondary packaging.
35
Meaning that extra-EU exports were higher than intra-EU exports.
36
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Intra-EU_trade_in_goods_-
_main_features
37
The electronics sector is one of the most internationally fragmented sectors, see Figure 18 in Annex 6,
Source: Gaulier, G., Sztulman A., Ünal D., Are Global Value Chains Receding? The Jury Is Still Out. Key
Findings from the Analysis of Deflated World Trade in Parts and Components, CEPII Working Paper
2019-01, Paris.
11
Source: Chief Economist Team (DG Internal Market, Industry, Entrepreneurship and SMEs) based on OECD TiVA
data. Note: data available only until 2018
Consequently, the already significant level of complexity in the compulsory licensing
system due to its fragmentation increases even further in view of cross-border value
chains should manufacturing capacities of patented components be also located across
different Member States. The above problem concerns compulsory licensing that would
be issued for domestic (the EU market or several Member States), as well as for export;
although the latter to a more limited extent. As regards compulsory licensing for export
of pharmaceutical products to non-EU countries facing a health crisis, the system put in
place by Regulation (EC) No 816/2006 was never used and stakeholders’ views diverge
on the reason therefore38
. Since no report was made on its application, it is difficult to
draw definitive conclusions on its effectiveness. Similarly, to what exists for the
domestic market, the cross-border value chains of manufacturing capacities could affect
compulsory licensing for export purposes to non-EU countries.
To conclude, EU compulsory licences rules are characterised by inadequate territorial
architecture, uncoordinated national procedures and decision-making, which is
especially problematic in view of cross-border value chains increasingly predominant in
the EU. This altogether results in a system which is ill-suited to address a cross-border
crisis in a timely manner.
2.2 Drivers of the problem
The identified problem, its drivers, as well as consequences are presented in Figure
Figure 4.
Figure 4: Problem tree
38
Two thirds of respondents to the OPC consider that the Regulation 816/2206 allows for speedy and
efficient procedures for granting compulsory licences to export pharmaceutical products to third countries.
Views greatly diverge depending on the group of respondents (all NGOs disagree with this view). When
asked about what elements of the regulation could be streamlined, around a third of respondents having
expressed an opinion mention the accelerated and simplified procedure (37%) and the conditions to submit
an application (30.5%). Slightly more respondents (40%) consider that the procedure set by Regulation
(EC) No 816/2006 should be made more flexible to adapt to the needs of the importing countries.
12
2.2.1 Divergent national schemes on compulsory licensing
There is no harmonisation of compulsory licensing for the EU domestic market. The
international framework includes some requirements that are mainly procedural. Outside
these requirements, WTO members (including EU countries) retain a large margin of
manoeuvre when deciding on their national compulsory licensing scheme. In the EU this
results in a fragmented landscape when it comes to compulsory licensing for crisis
management, especially concerning the trigger, the scope, the procedure and conditions
of national rules (see Table 21, Annex 6). On compulsory licensing for export purposes,
Article 31bis of the TRIPS Agreement has a more limited scope covering only
pharmaceutical products and provides for more stringent requirements. EU Regulation
(EC) No 816/2006 harmonises national laws in the field and the margin of manoeuvre
left to Member States is limited. However, its application can still slightly differ across
Member States, and in particular when it comes to national practices and conditions.
Trigger
The international framework on compulsory licensing does not prescribe the reasons for
which a compulsory licence can be granted for the domestic market39
. Member States
usually allow compulsory licence when the patent is not used on their territory, in case of
dependency of patents40
or for public interest reasons41
. This latter category is relevant as
regards compulsory licensing for crisis management. Most Member States have general
provisions allowing compulsory licensing for “public interest” or “national
emergency”42
. With few examples of use across Member States, it is however difficult to
assess how these national provisions are used in practice and how they apply to crises. In
contrast to these general clauses, some Member States only allow compulsory licensing
for specific crises, typically health crises (i.e. BE, HU and IT)43
. IE is the only Member
State not providing for the possibility to grant a compulsory licence for crisis
management. In conclusion, not all Member States provide for compulsory licensing for
crisis management, some do only for certain types of crises (i.e. health) while other
provide for general basis, differently worded, for which uncertainty remains as to their
concrete application to crisis (see Table 19 in Annex 6).
Concretely, if there is an environmental crisis (e.g. flood, river pollution) affecting several
Member States and the manufacturing capacities of the critical product are spread across BE, ES
and FR. Issuance of compulsory licences would not provide a solution, as BE does not allow
compulsory licensing for crises other than health crises.
Scope
The scope of a compulsory licence refers here to the type of IP rights it covers. This has
an impact on the efficiency of the compulsory licence. For instance, ‘simple IP products’
39
Although an explicit reference is made to compulsory licensing to tackle crises. Article 31 of the TRIPS
Agreement provides indeed that in the case of a national emergency or other circumstances of extreme
urgency, the best-efforts requirement to obtain an authorisation from right holder can be waived.
40
When a patented invention cannot be exploited without infringing an invention patented beforehand.
41
This notion is generally not defined nor exemplified. Most of the time a case-by-case approach prevails,
as this is for instance the case in DE, see EPO (2018), p 30. Compulsory licence for Community plant
varieties can also be issued on a public interest ground.
42
See Table 19 (Annex 6) listing the different provisions applicable in the EU countries and based on
which a compulsory licence could be granted to tackle a crisis.
43
To be noted that FR also restricts the grounds on which a compulsory licence can be granted to public
health, national defence, and national economy.
13
such as water purification pills, valves for a respiratory device or masks can easily be
replicated based on the patent. For complex products such as vaccines, access to trade
secrets or secret know-how would be needed on top of patents. Finally, some crisis-
relevant products are developed in such a short time span that the patent has not been
granted yet. Only the patent application is available in such cases. Member States take
a different approach as regards the scope of compulsory licences:
 Patents: All Member States’ compulsory licences law apply to patents, be it national
or European patents. However, the same is not true for patent applications. A
minority of Member States expressly include patent applications44
. The Dutch
national patent law expressly excludes it45
. For the remaining Member States, their
laws do not explicitly include nor exclude patent applications, leading to legal
uncertainty. Yet, cutting-edge technologies to tackle a crisis are often new and still
subject to a patent application. The procedure to grant a patent is also lengthy
(between 3 to 5 years for the grant of a European patent). Excluding patent
applications can therefore severely affect the effectiveness of a compulsory licence.
 Supplementary protection certificates (SPCs)46
: Most national compulsory licensing
laws do not explicitly refer to SPCs47
. This leads to legal uncertainty and diverging
interpretation of similarly worded provisions48
. Where SPCs are not covered, a
consequence is that a patented product which was the subject of a compulsory
licence during the patent term may cease to be ‘exempted’ after the patent expiry,
during the SPC term (if any). In contrast, Regulation (EC) No 816/2006 explicitly
covers SPCs49
. Where SPCs are not covered (neither explicitly nor implicitly) by the
national compulsory licensing provisions in a certain Member State, its authorities
are prevented from ‘lifting’ SPC protection. Consequently, despite an existing
compulsory licence on the patent, the manufacturing of the SPC-protected product
would still require an authorisation from the SPC holder.
 Regulatory data protection (RDP): Regulatory data protection are rules enshrined in
the EU pharmaceutical legislation. Today, generic manufacturers cannot refer to the
results of pre-clinical tests and clinical trials of the originator until eight years have
elapsed from the date of authorisation of the medicinal product. This period of data
exclusivity granted to innovative companies is complemented by an overlapping 10-
44
Such as FR, IE, and MT, see “Compulsory licensing of intellectual property rights”, Center for
International Intellectual Property Studies (CEIPI), Université de Strasbourg (UNISTRA), Impact
Licensing Initiative (ILI), Ecorys Nederland BV (Ecorys), Brussels 2023, p. 41 and Table 21 in Annex 6.
45
As reported by CEIPI(2023). Based on that, the patent court of The Hague has refused to grant a
compulsory licence for a European Patent application on the ground that the final scope of the application
was uncertain and could only be determined after the grant of the patent.
46
An SPC is an IP right that serve as an extension to a patent right, applicable, under specific conditions, to
medicinal and plant protection products that have been authorised by regulatory authorities.
47
SPCs are covered by compulsory licensing laws in HR, CZ, EE, EL, HU, LT, RO and SK. In other EU
countries, in the absence of any explicit reference or authoritative official documents of interpretative
value, legal uncertainty persists, see CEIPI(2023), page 38.
48
A questionnaire was sent to national experts to identify the scope of national compulsory licensing
schemes. Responses of the national experts show that the lack of explicit reference to SPC gives rise to
legal uncertainty and different interpretation of similarly worded provisions, see CEIPI(2023), page 40.
49
Article 1 of Regulation (EC) No 816/2006 provides that “This Regulation establishes a procedure for the
grant of compulsory licences in relation to patents and supplementary protection certificates concerning the
manufacture and sale of pharmaceutical products, when such products are intended for export to eligible
importing countries in need of such products in order to address public health problems.”
14
year market exclusivity which prevents a generic drug to be placed on the market
during this ten-year period. RDP rules are based on harmonised EU legislation50
with no margin of manoeuvre left to Member States. Where they apply, RDP rules
slow down or may even block the availability of products manufactured under a
compulsory licence as it would delay the granting of marketing authorisation for
medicinal products. In other words, a compulsory licence granted on a patent may
be defeated by RDP still in force, preventing a generic product from being placed on
the market. This can constitute a solid obstacle to the effective use of a compulsory
licence51
.
 Other IP rights, trade secrets and know-how: compulsory licensing is already
regulated at EU level as regards plant varieties (see supra, section 1.2). As regards
other IP rights, from the available information it appears that Member States do not
provide for a compulsory licence outside patent rights. Likewise, national laws
generally do not address the issue of trade secrets and know-how (which might be
needed for the manufacturing of complex products). The Spanish law is an
exception as it imposes an obligation to act in good faith in the context of a
compulsory licence, as well as a transfer of know-how to the beneficiary of a
compulsory licence.52
In conclusion, the scope of a compulsory licence has a direct influence on its
effectiveness to tackle crises. Many divergences exist across the EU in this respect.
Concretely, in the context of a cross-border crisis a FR company has developed a new product
still subject to a patent application. FR has the manufacturing capacities and the possibility to
grant a compulsory licence on a patent application. FR would therefore be able to help NL, also
experiencing the crisis. However, since the NL law does not authorise compulsory licences on
patent applications, it cannot issue a compulsory licence to import the FR products.
Procedure
Member States also take different approaches as regards the granting authority and the
granting procedure. The granting authority can be a court, an executive body
(government or ministry), an IP office or even a competition authority53
. Regulation (EC)
No 816/2006 also maintains some margin of manoeuvre for Member States as regards the
competent authority to grant a compulsory licence for export purposes to non-EU
countries.
Often, when it comes to compulsory licences for crisis management, a dedicated
authority (typically an executive body) is competent and expedited procedures are in
place. Advisory committees are also sometimes involved in the decision-making
50
See the protection periods set out in Article 14(11) of Regulation (EC) No 726/2004 and in Articles
10(1) and 10(5) of Directive 2001/83/EC.
51
In 2016, the Romanian government contemplated issuing a compulsory licence for the medicine
sofosbuvir. However, data exclusivity was only to expire in 2022. In such circumstances, issuing a
compulsory licence would have been useless as data exclusivity would still prevent the registration of a
generic version of sofosbuvir. See E. ‘t Hoen, P. Boulet and B. Baker, Data exclusivity exceptions and
compulsory licensing to promote generic medicines in the European Union: A proposal for greater
coherence in European pharmaceutical legislation, Journal of Pharmaceutical Policy and Practice (2017).
52
CEIPI(2023) p. 50 and Table 21 in Annex 6.
53
See Annex 6, Table 20.
15
process54
. Patent owners can be part of the procedure. This is the case for some national
procedures55
but also in the context of Regulation (EC) No 816/2006 where the patent
holder is being notified of an application for a compulsory licence and can comment56
.
Member States also diverge regarding the availability of an expedited procedures for the
issuance of a compulsory licence (e.g. by way of a preliminary relief57
). While some
Member States provide for such procedures, others do not, or it is at least uncertain
whether a compulsory licence based on a preliminary relief is possible because national
law is silent on this matter and there are no precedents in national case law58
. Therefore,
procedures (covering e.g. the assessment, granting or refusal of the applications) and
granting authorities vary across Member States, including as regards compulsory
licensing for export purposes to non-EU countries even if to a lesser extent59
. Review
(appeal) procedures are provided in all Member States but with again different
procedures and delays. In conclusion, differences between national granting authorities
and procedures result in different delays applicable to grant a compulsory licence and to
review the granting decision.
Concretely, in the context of a crisis requiring fast actions, in DE a compulsory licence can be
granted based on a preliminary relief. In contrast, in PL it is not possible to obtain a compulsory
licence by way of a preliminary relief. This could lead to delays in cross-border supply, for
instance when the crisis relevant products are already being produced in DE under a preliminary
compulsory licence (also ready for the supply of PL), but PL cannot react in timely manner with
a corresponding compulsory licence for the importation due to the lack of expedited procedure.
Conditions
Member States apply different conditions as regards the conditions under which a
compulsory licence can be granted. These conditions can impact the effectiveness of a
compulsory licence:
 Identification of the patent(s) and/ or product: Most Member States’ laws provide
for a compulsory licence for a “patent”, leaving room for interpretation as to
whether this can refer to all patents covering a product or only to a single patent
(meaning that for complex products covered by multiple patents, multiple
compulsory licences would need to be issued). This is source of legal uncertainty60
.
54
For instance, in the context of a compulsory licence for public health purposes in BE the application is
submitted to the Minister of Economy and forwarded to the Bioethics Advisory Committee.
55
For instance, in BE the patent holder has one month to file her observations on the grant of a compulsory
licence and the level of remuneration.
56
See article 7 of Regulation (EC) No 816/2006.
57
Preliminary relief proceedings are short proceedings seeking an immediate provisional judgment in a
civil dispute.
58
“European Patent Office, Compulsory licensing in Europe - A country-by-country overview”:
Unavailable in: BE, EL, PL, Uncertain: IE, FR, FI, ES, DK, SE.
59
The competence to assess, grant or refuse an application remains with national competent authorities
who retain a margin of manoeuvre in that respect.
60
National experts were asked how provision only referring to ‘patent’ in singular form should be
interpreted. Views greatly varied between national experts. Some (e.g. experts from AT, BG, DK, FR and
LU) considered that a compulsory licence could only be granted per single patent. Others (e.g. EE, FI, EL,
LT, LU, PL, RO and ES) considered that the law does not prohibit that a compulsory licence covers more
than one patent, see CEIPI(2023) p. 37,
16
A compulsory licence can currently be based on a product under Regulation (EC)
No 816/200661
.
 Embargos: Some Member States’ law provide for an ‘embargo’ during which a
compulsory licence cannot be requested before a certain period after the patent
application and/ or grant which can prove particularly problematic for a compulsory
licence to tackle a crisis since such an embargo effectively blocks ‘access’ to recent
technologies62
.
 Calculation of the remuneration: The calculation of the adequate remuneration is
determined following different criteria63
and by different authorities across Member
States64
. The patent owner is sometimes invited to file observations on the level of
remuneration65
.
In conclusion, Member States’ law considerably vary when it comes to conditions under
which a compulsory licence can be granted. These divergences can lead to distorting
consequences and further fragmentation, e.g. different procedures in the granting of a
compulsory license, including the impossibility in the case of the embargos, to issue a
compulsory licence before several years, different remunerations granted, etc. Those
differences can significantly affect efforts across the EU to provide a uniform reply.
Concretely, in the context of a crisis where manufacturing capacities are located in AT but the
patent was recently granted, AT could not issue a compulsory licence because its national law
provides for an embargo on compulsory licences for patents registered for less than three years.
2.2.2 Inadequate territorial reach of compulsory licensing
Cross-border supply of goods manufactured under a compulsory licence is complex
under the current EU legal framework. Member States face obstacles when willing to
both export and import within the EU goods manufactured under a compulsory licence.
Consequently, there is simply no Single Market when it comes to compulsory licensing
in the EU. Article 31 of the TRIPS Agreement provides for that a national compulsory
licence must be used predominantly for the supply of the domestic market. The domestic
market usually amounts to the national territory of the country having granted the
compulsory licence. However, this is not necessarily always the case. Under the TRIPS
61
Article 6(3) of Regulation (EC) No 816/2006 provides that “The application pursuant to paragraph 1
shall set out the following: (…) the non-proprietary name of the pharmaceutical product or products which
the applicant intends to manufacture and sell for export under the compulsory licence”. However national
divergences can remain as Member States may prescribe requirements on the identification of the patent(s)
and/ or supplementary protection certificate(s).
62
See for instance AT (a CL can only be requested four years after the application date or three years after
the grant date); NL (a CL can only be requested after three years of lack of use); IT (a CL can only be
requested four years after the application and three years after the grant).
63
For instance, in AT the appropriate remuneration is determined by the Austrian Patent office taking into
account the economic value of the licence. In DK, the remuneration is decided in accordance with the
general principles of damages.
64
For instance, in AT the appropriate remuneration is determined by the Austrian Patent office taking into
account the economic value of the licence. Likewise in ES the Spanish Patent and Trade mark office is
competent to decide on the remuneration, based on the economic importance of the invention. In DK, the
remuneration is decided the granting court in accordance with the general principles of damages. Court
also has the discretion to determine the amount of remuneration in DE.
65
This is for instance the case in BE.
17
Agreement, the Single Market can be considered a domestic market as the EU is a
Member of the WTO and of the TRIPS Agreement in its own rights.
In contrast, all Member States’ laws are territorially limited, in the sense that the effects
of a national compulsory licence are limited only to the national territory of the granting
Member State66
. Current national compulsory licensing schemes are indeed designed to
meet the national needs of their own population and satisfy the public interest of the
issuing Member State67
. They do not reflect the EU as being one domestic market, as
allowed under the TRIPS Agreement. Furthermore, uncertainty exists as regards import
of goods manufactured under a compulsory licence from other Member States. The
uncertainty results from the exhaustion principle (see Annex 7). Patents, like other IP
rights, exhaust within the Single Market once the patented goods have been put on the
EU market in one Member State by the patent owner or with consent of the patent
owner68
.
The question therefore was raised as to whether the putting onto the market of a good
manufactured under a compulsory licence can be considered done with the patent
owner’s consent69
. In 1985, the ECJ replied in the negative to this question70
. It indeed
decided that where a compulsory licence is granted to a third party which allows to carry
out manufacturing operations, the patent owner cannot be deemed to have consented to
the operation of that third party. This means that the patent owner is allowed to stop the
import of goods into a Member State in case the goods have been manufactured under a
national compulsory licence in another Member State due to the exceptional lack of EU-
wide exhaustion of the patent. A (voluntary or compulsory) licence is therefore also
needed in the importing country to avoid the importation being stopped by the patent
holder.
As regards compulsory licensing for export to non-EU countries, Article 31bis of the
TRIPS Agreement explicitly allows for the export of the products to a third country71
.
There is no limitation as to the part that can be exported from an EU country to certain
countries outside the EU, under Article 31bis of the TRIPS Agreement and Regulation
(EC) No 816/2006. On the contrary, the compulsory licence granted under the Regulation
covers the manufacturing of the product for export and distribution in the countrie(s)
cited in the application72
. There is therefore no problem as regards the possibility to
66
They are based on the understanding that: (i) a compulsory licence as a governmental act is necessarily
limited to the governed territory and (ii) the compulsory licence (as the limiting factor of the patent) shares
the territorial scope of the limited right (national patent).
67
For instance HR: “situations of extreme urgency on a national level”; EE: “national defence,
environmental protection, public health or other significant national interests of the Republic of Estonia”;
DE: “epidemic situation of national importance”; HU: “in the interest of meeting domestic demand”; IT:
“national health emergency”; PL: “to prevent or eliminate the state of national emergency” and “to prevent
or remove a threat to important state interests”; RO: “in national emergency”.
68
In other words, once a product is put on the EU market by the IP owner or with the consent of the IP
owner, this good can be freely resold, rented, lent throughout the Union. The rights of the IP owner are
exhausted; the patent owner cannot further invoke patent rights to oppose the resale, rental, lending or
other forms of commercial exploitation of the good by third parties when done in another Member State.
69
If the reply is in the negative, the patent rights are not exhausted. In other words, the patent owner can
oppose any further distribution of the goods.
70
CJEU, Judgement of 9 July 1985, C-19/84 (Pharmon), ECLI:EU:C:1985:304.
71
It should however be reminded that since EU countries have opted out from the possibility to be
importers under Article 31bis of the TRIPS Agreement, they cannot benefit from the system
72
See article 10(4) of Regulation (EC) No 816/2006.
18
export pharmaceutical goods to non-EU countries. However, a non-EU country could
also face a situation within the EU where the supply and manufacturing chain of a
product requires multiple compulsory licences in different Member States. In addition,
the importing non-EU countries would have to issue a compulsory licence to import the
products73
, unless the products are not protected by a patent in the importing country.
In conclusion, despite the flexibility that exists at international level, compulsory
licensing in the EU is designed to exclusively supply national territories. In other words,
there is currently no Single Market for products and no free movement of goods
produced under a compulsory licence.
2.2.3 No dedicated forums to deal with compulsory licensing that could bolster EU
resilience in times of crisis
The EU has faced numerous crises throughout its history and has gradually implemented
policy and institutional changes to enhance its resilience to crises (see Annex 6, Table
22). This is still true today with the Union currently working on different instruments
aiming at tackling crises (e.g. the SMEI proposal and the setting-up of HERA) or
including crisis-specific provisions (e.g. the Chips Act). The COVID-19 crisis has indeed
confirmed that action at EU level allows a better, faster, and more efficient response to
crises. Yet, compulsory licensing schemes remain fragmented and purely territorial.
There is currently no or very limited interplay between compulsory licensing schemes
and existing and envisaged EU crisis instruments:
 EU crisis instruments may include a coordination mechanism providing for
exchange of information, coordination and monitoring of national crisis
countermeasures. The objective being to enable coordinated decision making in
support of an EU response. Currently, it is uncertain whether and how these
coordination mechanisms would apply to compulsory licensing.
 EU crisis instruments usually allow the declaration or activation of a crisis mode,
in the context of which emergency measures can be taken. Currently, there is no link
between the EU possibility to activate a crisis mode and the trigger at national level
to grant a compulsory licence.
 EU crisis instruments usually allow decision-making at EU level, as a means to
more efficiently tackling EU crises. Yet, decision-making remains at national level
as regards compulsory licensing, which can undermine efforts to build an EU-level
crisis response mechanism.
 Regulation (EC) No 816/2006 harmonises the conditions and procedure for Member
States to grant a compulsory licence for export purposes to non-EU countries.
However, the Regulation does not provide for any coordination nor cooperation
between Member States. The Commission also has a limited role. This
uncoordinated and purely national process can hamper the use of the mechanism put
in place by Regulation (EC) No 816/2006.
In conclusion, the current compulsory licensing system that could complement and
support the EU’s ability to tackle crises appears disconnected from EU crisis instruments.
73
As explicitly required by the TRIPS Agreement. Importation in other countries or into the Single Market
is prohibited (see Article 13 of Regulation (EC) No 816/2006).
19
In addition, there is no coordination at EU level should several Member States wish to
coordinate their national actions as regards compulsory licensing. This is also not in line
with the increased harmonisation of EU patent law, and in particular the upcoming
launch of the unitary patent system74
, which will make unitary patent protection much
easier than before in a large portion of the EU75
. In contrast, purely national compulsory
licensing systems and their resulting divergences would conflict with the increasing
European integration of patent law.
2.3 Consequences of the problem
A coherent compulsory licensing system for crisis management does not currently exist
in the EU. Instead, a patchwork of national laws with different triggers, scope,
conditions, and procedures on compulsory licensing makes it difficult for a Member State
with manufacturing capacities in critical goods to help another Member State (without
such manufacturing capacities). Likewise, in case of a manufacturing process spanning
across several EU countries (e.g. components sourced from other countries), the current
licensing scheme in the EU is unfit to match its complex cross-border nature. The above
fragmented architecture leaves the EU more fragile in terms of resilience, as Member
States cannot effectively cooperate in cross-border crises. Furthermore, Member States
are not able to leverage their bargaining position based on an optimal compulsory
licensing scheme. As a result, they may have no choice but to rely on voluntary
agreements only. The fragmented system also results in administrative costs for public
authorities granting the compulsory licence, potential licensees, and patent owners, in a
sense that multiple procedures might be initiated across several jurisdictions.
The next link in the chain of consequences affects the citizens and/or firms that might
have no access to critical goods in crisis, as products cannot be manufactured or supplied
from another country. This consequence could aversively impact citizens’ well-being
and/or firms’ economic standing, especially if a particular crisis is larger and lasts longer
than what would have been otherwise (i.e. with a more efficient compulsory licensing
scheme). In other words, today’s rulebook on compulsory licensing can lead to a
situation when access to certain goods in crisis is not secured on time, which may
generate broad negative socio-economic consequences.
Finally, non-EU countries also face a fragmented and complex legal landscape, which
can be an important obstacle when seeking a CL for critical pharmaceutical goods. The
compulsory licensing scheme for export to non-EU countries is also not suited to address
cross-border supply chain in the EU and in that respect, third countries face similar
problem as EU countries.
74
Currently 17 Member States, and up to 25 EU Member States (participating in the enhanced cooperation
on unitary patent protection). The unitary patent system will stimulate research, development and
investment in innovation, and contribute in that respect to the Union’s resilience. The unitary patent system
does not provide for specific rules for compulsory licensing. It only foresees that compulsory licences for
unitary patents (‘European patents with unitary effect’) should be governed by the laws of the participating
Member States as regards their respective territories (Recital 10 of Regulation (EU) No 1257/2012). For
the participating Member States, this means maintaining the status quo, as their existing national
compulsory licensing systems, limited to their respective territories, will apply. A CL granted in respect of
a unitary patent will not share its unitary nature, and may for instance affect a single Member State, or a
few of them – not necessarily all 17 Member States covered by unitary patents (initially).
75
The 17 Member States in which the unitary patent system will initially apply represent about 75 % of the
Union’s GDP.
20
To conclude, the current system does not provide for an EU-wide compulsory
licensing mechanism, as the national legislations are heterogeneous and would not
allow a flexible use of production capacities across the EU. When it comes to
compulsory licences there is simply no Single Market. And thus unlike EU main trading
partners with unitary regime of compulsory licences76
, the EU would not be able to
respond in a timely and coherent manner to cross-border crises requiring such a
compulsory licence (be it within the EU or outside the EU). Finally, the discussion on the
scale of the identified problem and the likelihood that a more streamlined compulsory
licencing rules could be needed in the event of a cross-border crisis are based on the
assumption that there is a non-zero chance that such situation could materialise in the
future in the EU (e.g. of a similar scale to COVID-19 pandemics). Irrespective of what
the future threats might look like (infectious, environmental, affecting IT or energy
networks, etc.), in can be assumed that any attempt to strengthen crisis-preparedness and
ultimately speed up the response time should be encouraged or at least further
investigated.
2.4 How likely is the problem to persist?
The problem described under 2.1 is most likely to persist. Some Member States could
decide to streamline their national compulsory licensing laws, as some already did in the
aftermath of the COVID-19 crisis but the lack of coherence between national compulsory
licences in the EU, the limited territorial effect of these licences, the burdensome and
lengthy administrative procedures, and the lack of Single Market for products subject to
compulsory licensing would remain. Furthermore, recently tabled EU crisis instruments,
such as SMEI, SCBTH or HERA, do not provide for compulsory licensing within their
framework. As a consequence, a gap concerning compulsory licencing as a crisis remedy
tool is likely to remain. Even the forthcoming introduction of the unitary patent system
enabling the possibility to obtain such protection in a large portion of the EU will not
change the persistence of the problem. Within the legal framework creating the unitary
effect it is foreseen that compulsory licences for European patents with unitary effect
should be governed by the laws of the participating Member States as regards their
respective territories (Recital 10 of Regulation (EU) No 1257/201277
). This prevents -
even in a cross-border crisis situations - that the recognition of an event triggering a
compulsory licence in one participating Member State (for instance a specific public
interest) can lead to the granting of a compulsory licence for the territory of all
participating Member States. Consequently, it would mean that in the future, also under
the new unitary patent system, the fragmented national regimes and practices for
compulsory licensing would remain.
76
For example where the US successfully relied on CL to conclude a voluntary agreement on reasonable
terms stems from 2001: when facing anthrax attacks, the US government threatened to grant a CL for the
relevant antibiotic drug should Bayer not lower the price thereof. Eventually Bayer lowered the price of its
antibiotic drug. Likewise, the US government appeared in a better position than the EU to conclude
voluntary agreements during the COVID-19 crisis, which can at least partly be attributed to its possibility
to rely on compulsory licensing. By contrast, the EU was not able to rely on an EU-level compulsory
licensing as a bargaining chip in the context of negotiations on vaccines.
77
Regulation (EU) No 1257/2012 of the European Parliament and of the Council of 17 December 2012
implementing enhanced cooperation in the area of the creation of unitary patent protection.
21
3 WHY SHOULD THE EU ACT?
3.1 Legal basis
The proposed initiative will be based on Articles 114 and 207 of the Treaty on the
Functioning of the EU (‘TFEU’). Article 114 TFEU confers on the EU the power to
adopt measures, which have as their object the establishment and functioning of the
internal market and has provided legal basis for a wide range of EU instruments in the
area of IP rights. Since the envisaged initiative aims at ensuring that compulsory
licensing is fit for purposes as regards the Single Market, this initiative should be based
on Article 114 TFEU. Article 207 TFEU confers on the EU competence in the field of
common commercial policy, including as regards IP rights. Regulation (EC) No
816/2006, relating to the compulsory licensing of medicines for export purposes to non-
EU countries, is based on Articles 95 and 133 of the TEC (i.e. Article 114 and 207 of the
TFEU). Since the envisaged initiative would have an impact on Regulation (EC) No
816/2006, and on the possibility to export goods manufactured in the EU, the initiative
should also take article 207 TFEU as a basis. Insofar as derogations from regulatory
pharmaceutical protections are concerned, the latter are mainly regulated by Directive
2001/83, based on Article 95 TEC (i.e. Article 114 TFEU). Internationally, any new EU
initiative should take place against the backdrop of, and in compliance with the TRIPS
Agreement, and in particular its Articles 30, 31 and 31 bis.
3.2 Subsidiarity: Necessity of EU action
Action at EU level is justified to ensure the smooth functioning of the Single Market in
crises. Currently, Member States can only act nationally meaning that they can grant a
compulsory licence for their own territory. This can be sufficient for purely national
crises, where both the crisis and the manufacturing capacities are in the same Member
State. However, this will not be sufficient when a crisis has a cross-border dimension –
the latter is highly probable due to prevalence of cross-border supply chains. The
incapacity of Member States to properly address a crisis with a cross-border dimension
finds its origin in the territoriality of national compulsory licensing schemes and the
divergent, sometimes sub-optimal, compulsory licensing schemes in place to tackle a
crisis. The proposed EU action will act on these specific points by creating an EU-level
compulsory licence with a streamlined procedure. Without action at EU level, Member
States would remain vulnerable to crises with a cross-border dimension. In contrast,
introducing an EU compulsory licensing scheme will contribute to building a more
resilient EU by providing an additional collective tool in support of other crisis
instruments such as SMEI or HERA.
3.3 Subsidiarity: Added value of EU action
The objective of the initiative is to build an EU-level compulsory licensing scheme able
to tackle crises with a cross-border dimension, in addition to the existing compulsory
licensing national schemes for grounds other than crises. Any instrument that is to be
considered in this impact assessment would be limited to what is necessary to tackle
crisis with a cross-border dimension, only when such action cannot be implemented at
national level or when such implementation would be inefficient. Ultimately, the
proposed instrument would be also complementary to the other crisis instruments aimed
at strengthening the resilience of the Single Market.
22
4 OBJECTIVES: WHAT IS TO BE ACHIEVED?
To address problems discussed in section 2, the proposed initiative aims to create a
compulsory licensing system that would be less fragmented and better-suited for EU-
wide crises. Since compulsory licensing may have a significant impact on IP holders, this
should remain an exceptional measure, applicable in case of unavailability or
unsuitability of voluntary agreements. Working within the bounds of the TRIPS
Agreement, the initiative should not lead to higher aggregate burdens or risks for patent
holders relative to national regimes, but rather a more convergent, predictable, and
workable regime in the exceptional cases where recourse to compulsory licensing at EU
scale is necessary. Details of objectives to be achieved are presented below:
Figure 5: Objectives
4.1 General objectives
Our general objective is to enable the EU to respond to crisis situations in a timely
manner using the full potential of the Single Market and ensure that in time of crisis,
critical products and components can be made available across EU countries and
supplied without delays to EU citizens and firms or non-EU countries.
4.2 Specific objectives
With a view of creating a convergent, predictable and workable compulsory licensing
system in the EU for crisis management, both for the domestic market and for export
purposes to non-EU countries, the specific objectives (‘SO’) would aim at:
 SO1: Improve the key features of compulsory licensing, such as the trigger, scope
and conditions of compulsory licensing, as well as improve the coherence of
compulsory licensing in the EU to improve its effectiveness and efficiency in a
crisis. This objective would in other words aim at reducing the fragmentation. This
would mainly concern the domestic market as Regulation (EC) 816/2006 already
provides for harmonisation of compulsory licensing for export purposes to non-EU
countries;
 SO2: Ensure that the territorial reach of a compulsory licence, including for export
purposes, can accommodate the reality of cross-border value chains operating in the
Single Market. This objective does not aim at making compulsory licensing more
frequent but rather ensuring that the territorial reach of a compulsory licence,
including for export purposes to non-EU countries, is adequate to the reality of
cross-border value chains operating in the Single Market;
 SO3: Support EU resilience by improving the coordination, streamlining the
decision making and allowing compulsory licences to better complement EU action
23
in crises, including for export purposes to non-EU countries. This objective would
also aim at ensuring adequate coherence between (national) compulsory licensing
schemes and EU crisis instruments.
5 WHAT ARE THE AVAILABLE POLICY OPTIONS?
5.1 What is the baseline from which options are assessed?
Under the baseline scenario (status quo) the compulsory licensing system in the EU
would continue to operate based on the existing national rules and Regulation (EC) No
816/2006. As a result, compulsory licensing schemes for crisis management would
remain purely national, also for cross-border or EU-wide crises. There would be no
coordination between Member States and compulsory licensing would remain mainly
applicable to national territories (and subject to possible restrictions such as embargos).
This would result in maintaining an inefficient tool for addressing crises in the Single
Market, unfit for the cross-border nature of EU supply chains. This option may lead to a
situation that voluntary agreement is the only viable option or where Member States
could only rely on the goodwill of private economic operators and their willingness to
enter into voluntary agreements, as public authorities will not be able to leverage their
bargaining position based on an optimal compulsory licensing scheme. This option
would neither support the EU’s efforts in building tools to foster its resilience when
facing crises nor ensure a link between EU emergency instruments and compulsory
licensing. Furthermore, the following factors would continue to affect stakeholders
involved in a compulsory licensing procedure under the status quo (Table 1).
Table 1: Key factors affecting stakeholders involved in compulsory licensing procedure (relevant in a crisis situation) -
the baseline
Key factors affecting stakeholders
Patent owners  Cost to participate in licensing negotiations in each jurisdiction, where the
compulsory licensing may be pending;
 Lack of legal certainty (e.g. on the scope of compulsory licensing, amount of
remuneration) due to fragmentation.
 Loss of control over patent rights in a EU country concerned.
Manufacturers –
potential
licensees
 Cost to participate in licensing negotiations in each jurisdiction, where the
compulsory licensing may be pending.
 Cost of adapting the manufacturing facilities to the production of CL-covered item.
EU countries  Cost of launching and implementing the compulsory licensing procedure (incl.
negotiations with the patent holders and manufacturers).
 Crisis tackled individually, less leverage.
EU citizens  Risk of unavailability or delays in supply of critical products during crisis.
Non-EU
countries78
 Cost and legal uncertainty when initiating the compulsory licensing procedure in
the EU.
As compulsory licensing is very rare79
, data on the actual costs of such procedures is
scarce and accessing its economic impacts proves challenging. Nonetheless, the
following characteristics can be attributed to selected entries indicated in the above
Table:
 Currently, compulsory licensing procedure is complex and, based on the available
examples, it may take a year or longer to complete, even if carried out only at
78
Understood as countries covered by Regulation (EC) No 816/2006.
79
E.g. in the context of the COVID-19 crisis, only one compulsory licence was granted in the EU (HU).
24
national level (see Table 25, Annex 6 – the duration lasting from at least ca. 1 year
and 10 months80
, to ca. 2 years and 2 months including the negotiation phase81
, or
ca. 2 years and 8 months82
). The only example where a compulsory licence for
export was successfully issued (the Canada-Rwanda case) took roughly three years83
to complete. For both, domestic and export markets, the length and complexity of
procedure has direct influence on cost for all parties involved. The cross-country
differences between compulsory licensing procedures are also source of legal
uncertainty.
 Costs are borne separately in each jurisdiction – as indicated in the problem
statement (section 2.1), the average number of Member States in which patents for
COVID-related products were active was around 4 to 5. Using this as a proxy for
products that can be subject to a CL during a crisis, it can be assumed that in the
event of a cross-border crisis compulsory licensing procedures might need to be
repeated at least four times for the same product (i.e. separately in each jurisdiction
where the relevant patent should be lifted).
The policy options proposed in this impact assessment will be evaluated compared to the
above factors, as identified for the baseline. The general economic and competitiveness
impacts of compulsory licencing that are valid irrespective of a crisis incident occurrence
are discussed in section 6.5.3.
5.2 Description of the policy options
Each option will consider the ensuing elements, in line with the specific objectives:
 Improve the key features of compulsory licensing (addressing SO1): Features of
a compulsory licensing scheme play an important role to ensure the effectiveness
and efficiency of a CL for crisis management purposes. As illustrated in the problem
definition, shortcomings currently exist in the national systems. These shortcomings
concern:
- The trigger (i.e. possibility to grant a compulsory licence for crisis
management or only limited to certain types of crises): clarifying this aspect is
broadly in line with stakeholders opinions as only few of them (5%) are
against the use of compulsory licence for crisis management84
. In addition,
those having expressed an opinion are in favour of a compulsory licensing
scheme covering a large range of crises. For this reason, the different options
provide for the granting of a compulsory licence for crisis management,
covering all types of crises.
80
Italy, 2005 – SPC on medicine imipenem-cilastatin (for further details see Table 25 in Annex 6).
81
Germany, 2016 - Medicine raltegravir (for further details see Table 25 in Annex 6).
82
Austria, 1972 - Medicine inderal propranolol hydrochloride (for further details see Table 25 in Annex 6).
83
A submission from Canadian pharmaceutical company Apotex Inc. to manufacture Apo-TriAvir (an HIV
antiretroviral drug) was received by Health Canada in December 2005. The medicine was sent to Rwanda
in two shipments in September 2008 and 2009.
84
Only 5% (N= 4) respondents to the public consultation consider that compulsory licensing should never
be used in crises. Among the respondents having given their opinion on the types of specific crises that
should be covered by a compulsory licence, a majority favours a large approach (i.e. crises related to
health, war and large-scale attack, energy, and natural disasters). Furthermore, 27 respondents replied to
the sub-question on which types of specific crises should be covered. Out of these 27 replies, 25 mentioned
health-related crises, 21 war and large-scale attack, 19 energy and 19 natural disasters.
25
- The scope (i.e. covering or not patent applications, SPCs, RDP and know-
how): as illustrated in the problem definition, a limited scope can seriously
limit the efficiency and effectiveness of a compulsory licence. Not covering
patent applications could prevent the use of critical new products or
technologies to tackle a crisis. Not covering SPC and RDP could maintain
protection other than IP, making the compulsory licence useless. This is
acknowledged by many categories of stakeholders, as far as patents85
, SPC86
,
RDP87
are concerned. In contrast only a third of stakeholders are in favour of
including know-how88
in the scope of compulsory licensing. However, good
collaboration from the patent owner, including in some circumstances access
to know-how, may be necessary to ensure the success of a compulsory
licence89
. In that context, all the options include a good cooperation obligation
for patent owners. For this reason, all options include a scope covering patents
(unitary and national patents), patent applications, (unitary) SPCs and RDP90
as well as a good collaboration obligation. Other IP rights would not be
covered (see discarded options).
- The procedure (i.e. absence of an accelerated procedure): as illustrated in the
problem definition, the absence of an accelerated procedure can delay the
granting of a compulsory licence. Yet, a large majority of respondents (74%,
N= 55) consider the speed of ensuring access to the required products and/ or
technologies as a high priority for compulsory licensing in crisis91
. For this
reason, all options include an accelerated procedure.
85
Half of the respondents (N= 37) to the public consultation are in favour of a scope covering patent
applications, with few disparities between the main categories of stakeholders, except for companies and
business associations who remain mainly against (for more details see Annex 2 and Table 25 in Annex 6).
86
65% of the respondents (N= 48) to the public consultation are in favour of a scope covering SPCs, with
few disparities between stakeholders (for more details see Annex 2 and Table 27 in Annex 6).
87
Stakeholders generally agree that RDP should not be an obstacle to the effective implementation of a
compulsory licence, see CEIPI(2023) p. 46. As for the OPC, although in absolute terms only 32% of the
respondents (N= 37) to the public consultation are in favour of a scope covering RDP, this low score is
explained by the many companies and business associations being against it, which is understandable due
to their legitimate commercial interests. NGOs, public authorities, and academic/ research institution were
predominantly in favour (for more details see Annex 2 and Table 28 in Annex 6).
88
36% of respondents (N=27) welcome if compulsory licences also included the know-how. However,
views are extremely contrasted on this point with only 5% of companies and business associations being in
favour. In contrast, academia, NGOs and public authorities, all but one are in favour of including know-
how in the scope of a compulsory licence (for more details see Annex 2 and Table 29 in Annex 6).
89
There may be situations in which allowing the use of a patent the invention through a compulsory license
is not sufficient to enable the licensee to effectively produce the crisis-relevant goods. This can particularly
be the case for complex products that require, in addition to the permission to use the invention, the
transfer of know-how including skills, abilities and knowledge. To this end, both parties involved, rights-
holder and licensee, should act together in good faith to enable the transfer of the knowledge (know-how)
associated with the patented invention, considering the interests of both parties.
90
As regards RDP, the pharmaceutical review would include the lifting of RDP in case of compulsory
licensing granted to tackle a crisis.
91
Additionally, 43% of the respondents to the public consultation would welcome an alignment of the type
of procedure (administrative or judicial procedure). When it comes to NGOs and academia, 8 out of the 11
respondents are in favour of such alignment. On recourse procedure, a bit more than a third of respondents
to the public consultation agree with an alignment of the time limit within which the application of an
appeal is admissible (42%, N= 31) and an accelerated appeal procedure (38%, N= 28). 35% (N= 26) of
respondents are in favour of the suspensive effect of an appeal.
26
- The conditions (i.e. burdensome identification requirements, embargos and
rules on remuneration): as illustrated in the problem definition, identification
of a patent or imposing an embargo can undermine the efficiency of
compulsory licensing for crisis management. Pre-defined rules on
remuneration can to the contrary support a swift granting of a compulsory
licence92
. For this reason, all options include as conditions streamlined
identification of patents/ product the prohibition of embargos and rules on
remuneration.
Consequently, the legislative options allow for the granting of a compulsory licence
to tackle all types of crises, providing a large scope (covering SPCs and RDP),
subject to a streamlined procedure and with optimal conditions. The options differ
as they propose different ways to implement these features. Each option therefore
details how trigger, scope, conditions and procedure are clarified. Additionally, each
option specifies who decides to issue a compulsory licence and the applicable
procedure.
 Territorial reach of compulsory licensing (addressing SO2): Each option
indicates the territorial coverage and the need – or absence thereof – to issue
multiple compulsory licences, and therefore how it fits the inherently cross-border
nature of supply chains in the Single Market. In this context it is worth noting that
almost half of the respondents to the public consultation consider that a compulsory
licence should enable the manufacturing of products across several EU countries
(46%, N=34) or to be exported in another Member State than the one in which the
product is manufactured (45%, N=33 replies)93
.
 Support to EU resilience (addressing SO3): Each option specifies the role it plays
in supporting the EU efforts to foster resilience to crises and the coherence with the
different EU crisis instruments as well as the streamlining, transparency and
coordination efforts on decision making. Because of the horizontal nature of IP
rights, the envisaged initiative on compulsory licensing will build on these crisis
instruments, by relying on the concepts and mechanisms already in place and
complement them. Finally, all options envisage certain reporting obligations94
imposed on Member States if a compulsory licence is considered to tackle a cross-
border crisis. The scope of such obligation differs according to options, as it may
range from exchanges of information during compulsory licensing negotiations, to
post-factum reporting on the implementation of the CL. The reporting requirements
would not necessitate any additional ICT infrastructure nor data collection, as they
would refer to basic information included in the licence agreements.
The results of the public consultation show that a large majority (82%, N=61) of
respondents consider that public authorities should be entitled to allow production of
critical goods through a CL. Respondents are usually less in favour of a decision-making
role of European institutions (28%, N= 21) than a coordinating role (36%, N=27). This
can be explained by the fact that businesses and industry representatives expressed low
92
Pre-defined rules on remuneration are deemed useful to speed-up the granting of a compulsory licence
by 42% of the respondents to the public consultation.
93
Interestingly, respondents identifying themselves as likely to be the subject of a compulsory licence
generally (75%) agree with the cross-border use of a compulsory licence. Stark contrast exists among the
different categories of stakeholders, as illustrated in Annex 6.
94
Or recommendation to do so in Option 1.
27
support in this respect, whereas they were the dominant group of respondents95
to the
OPC. That being said, the option of granting a CL at EU level is generally deemed more
positive by stakeholders as regards the EU’s ability to tackle crises (35%, N=26) than the
granting of a CL at national level (respectively, 11%, N=8). Stark contrast exists among
stakeholders with again low support from industry representatives: a majority (around
50%) of companies and business associations considering that the impact would be
negative. In contrast, no respondent in other categories considers the impact to be
negative. A large majority (65%, N=22) considers it positive (4% considers the impact to
be neutral and the rest did not reply).
5.2.1 Option 1: Recommendation on compulsory licensing for crisis management
Under this non-legislative option, the Commission would propose a recommendation on
compulsory licensing for crisis management with the objective of increasing the
efficiency and effectiveness of national compulsory licensing schemes, including for
export purposes to non-EU countries (i.e. cases covered by Regulation (EC) No
816/2006). In this recommendation, the Commission would clarify the international legal
framework, both in terms of obligations and flexibilities. Based on that, the
recommendation would identify good national practices as regards compulsory licensing
for crisis management and good coordination practices with a view to foster their uptake
in Member States.
 Improve the key features of compulsory licensing: In addition to identifying and
listing national provisions for issuing a compulsory licence for crisis management,
the recommendation would clarify, in collaboration with Member States, the optimal
features of compulsory licensing for crisis management (including the trigger, scope
and the conditions), as well as clarify the procedures to apply for and grant such CL.
The recommendation would list remedies available to patent owners, including the
competent judicial authorities, and provide concrete guidance on how patent owners
can file an appeal against the granting decision. On compulsory licensing for export
to non-EU countries, the recommendation would identify good practices among
Member States as regards national formal or administrative requirements.
 Territorial reach of compulsory licensing: The recommendation would clarify the
territorial scope of compulsory licensing granted at national level, and in particular
the possibility to distribute part of the goods manufactured under a compulsory
licence to another Member State.
 Support to EU resilience: The recommendation would identify relevant EU crisis
instruments and related transparency and coordination requirements. Against that
background, the recommendation would clarify how to align national compulsory
licensing schemes with EU crisis instruments. It would also outline and promote
good practices in terms of cooperation, transparency and information sharing
between Member States, including compulsory licences for export to non-EU
countries. Finally, PO1 would propose good practices in information exchange
concerning granted compulsory licenses and encourage Member States to share such
info with the EC.
95
Business associations and company/business organisation accounted for 54% of respondents to the OPC
(see Table 12 in Annex 2)
28
Figure 6: Simplified scheme for Option 1
5.2.2 Option 2: Harmonisation of national laws on compulsory licensing for crisis
management
Under this option, the Commission would propose a legislative initiative that would
harmonise national laws as regards the ground, scope, procedure, and conditions for the
granting of a compulsory licence for crisis management. The legislative initiative would
ensure that all Member States have in their national laws a compulsory licensing scheme
for crisis management. The compulsory licensing would remain in the remit of Member
States and have predominantly a national effect. PO2 would not harmonise compulsory
licensing schemes other than for crisis management. In line with the identified objectives,
it would focus on three building blocks as described below:
 Improve the key features of compulsory licensing: PO2 would require all Member
States to include in their national law a compulsory licensing scheme for crisis
management. Although the definition of a crisis would be harmonised (using
existing definitions at EU level), the granting decision, and the interpretation given
to the notion of crisis, would be left to Member States. The harmonisation would
cover the procedure, scope and conditions for granting a compulsory licence, along
the lines of what was described in section 5.2. The issuance of a CL for crisis
management would remain a national decision. PO2 would ensure that remedies
available to patent owners, including the competent judicial authorities, are aligned
in all Member States.
 Territorial reach of compulsory licensing: PO2 would require Member States to
allow, in cross-border crises, the possibility to export manufactured under a
compulsory licence to another Member State. There would be no exhaustion of
patent rights under this option (i.e. importing Member States would still need to
issue a licence to import the goods).
 Support to EU resilience: This option would clarify that national compulsory
licences could be issued in the context of an EU decision activating or declaring a
crisis mode or an emergency. The EC would have a coordination role in case of
cross-border crises, as it would provide support to Member States and facilitate
coordination of national compulsory licences (e.g. ensure the same subject-matter,
duration, remuneration, etc.) to ensure coherence across the EU. PO2 would also
include transparency and information exchange obligations for Member States as
regards applications for and granting of compulsory licences for crisis management
and in the context of Regulation (EC) No 816/2006. Member States would have to
inform the EC when they are considering granting and/or have granted a compulsory
licence for crisis management (i.e. transparency obligation) as well as provide
information on the compulsory licence (the subject matter of the compulsory
licence, companies involved such as patent holders and/or manufacturers, the
conditions agreed, etc.).
29
Figure 7: Simplified scheme for Option 2
A detailed scheme describing the procedural steps foreseen under Option 2 is provided in
Figure 19 (Annex 6).
5.2.3 Option 3: Harmonisation plus a binding EU-level measure on compulsory
licensing for crisis management
Under this option, the compulsory licence could be triggered in two scenarios. First, it
could be triggered by an EU-level decision activating a crisis mode or declaring an
emergency under an existing EU crisis instrument96
(e.g. activation of the emergency
mode under SMEI). Second, the compulsory licence could be triggered upon a request
made to the Commission by more than one Member State in the event of a cross-border
crisis97
. In such case, the notion of crisis would be defined along the line of existing
definitions in EU legislation98
. It would cover all types of crises (e.g. not limited to
health-related crisis) but would always require a cross-border aspect99
. The Commission
would adopt an activation measure100
requiring one or several Member States to issue a
compulsory licence for crisis management. The Commission would be assisted by an
advisory committee composed of Member States representatives that should provide the
Commission with a non-binding opinion. Its main tasks would include the assistance of
the Commission in the determination of the necessity to rely on compulsory licensing at
Union level, and under which conditions. In case there is an existing crisis instrument,
the advisory body would be the one foreseen in the context of this crisis instrument (e.g.
Advisory Group under SMEI). For cases falling outside existing crisis instruments or
where there is no such advisory body, an ad hoc advisory body would be set up101
. The
advisory committee would also hear the patent owner(s)102
. This should enable the
96
In such case, the EU-level decision activating a crisis mode should fulfil the conditions under that
specific crisis instrument (e.g. crisis activation decision under SMEI or SCBTH– see Table 22 in Annex 6).
97
The request would have to be made by the Member States willing to be covered by the EU-level
compulsory licence (as a manufacturing or receiving country).
98
In order to ensure as much coherence as possible with existing crisis instruments and other acts at Union
level, the proposed initiative should draw on existing definitions. For example, the definition of a ‘crisis-
relevant product’ could be based on the definitions of SMEI. In similar vein, the determination of the
existence of a crisis or emergency would rely on the Union legal act underlying the crisis mechanism and
the crisis definition included therein.
99
I.e. a crisis covering multiple EU countries or with manufacturing capacities in a different country than
the one experiencing the crisis or with manufacturing capacities spread across several EU countries.
100
E.g. an implementing act.
101
When the advisory body is an existing one, its existing rules of procedure should apply. As regards ad
hoc advisory bodies, they should be composed of one representative of each Member State in order to
provide the Commission with information and input stemming from the national level including
information on manufacturing capacities, potential licensees and, if applicable, proposals for voluntary
solutions. In addition, the advisory body should have the function of collecting and analysing relevant data
as well as ensuring coherence and cooperation with other crisis relevant bodies at Union and national level.
102
The non-binding opinion of the advisory body should be considered in the decision-making process.
The advisory body would have to consider the comments made by the patent owner(s). Persons, in
particular the licensee and the rights-holder, whose interests may be affected by the compulsory licence
should be given the opportunity to submit their observations beforehand.
30
Commission to make an assessment and consider the individual merits of the situation
and determine on this basis the adequate conditions of the compulsory licence, in
particular the adequate remuneration103
for the rights-holder. It would lead to the issuance
of several national compulsory licences, each being applicable to the territory of several
EU countries or the whole EU. An appeal against the decision would be available104
. PO3
would not harmonise national compulsory licensing schemes other than for cross-border
crisis management. In line with the identified objectives, it would focus on the following
building blocks:
 Improve the key features of compulsory licensing: PO3 would require all Member
States to include in their national law a compulsory licensing scheme for cross-
border crisis management (i.e. triggered by an EU-level decision activating a crisis
mode or declaring an emergency or upon request of Member State(s)). The option
would require Member States to provide for an accelerated granting procedure (e.g.
an executive order). Although the granting decision will be a national decision, its
basis will be a Commission act defining the conditions strictly linked to the crisis,
namely the purpose (e.g. production of this product protected by this(es) patent(s)),
the duration, and the territorial scope of the compulsory licence. This option would
provide harmonisation on other features105
such as the scope and the conditions, but
still leaving some margin of manoeuvre for Member States106
. The licensee(s) could
be identified by the Commission, Member States and/ or directly apply to benefit
from a compulsory licence.
 Territorial reach of compulsory licensing: Under this option, the compulsory license
could have an EU-wide effect. However, the activation measure and the national
decision would specify the exact territorial scope, considering the crisis. The scope
could be modified depending on the circumstances (e.g. crisis expanding to other
countries, need for further manufacturing capacities).
 Support to EU resilience: This option would provide the possibility for the
Commission, being assisted by the relevant advisory body107
, to order the granting
of national compulsory licences for cross-border crises management. The option
would also include transparency and information exchange obligations for Member
103
Further details on the possible remuneration criteria are provided in Annex 6.
104
The procedure would however depend on the type of act through which the binding opinion would be
granted. It would however always include a judicial procedure, as per requested by the TRIPS Agreement.
As regards national decision (and under PO3 aspects such as the remuneration), appeal would be done at
national level.
105
E.g. the harmonisation would include some criteria to determine the remuneration at national level.
106
The margin of manoeuvre would concern aspects that are not strictly linked to the crisis. For instance, as
regards remuneration, Member States would be able to decide on the amount of remuneration to be paid to
the patent owners but should take into account some criteria, such as the economic value of the use
authorised under the licence or the non-commercial circumstances relating to the issue of the licence. This
option would also provide for coordination on the adequate remuneration with other concerned Member
States. On remedies, this option would require Member States to set up a judicial procedure to appeal the
national granting decision, in particular as regards remuneration aspects and respect of the conditions set
up by the Commission activation measure.
107
Either the advisory body attached to the crisis instrument in the context of which the compulsory licence
is granted or, in the absence of such body, the ad hoc advisory body – see footnote 101.
31
States108
as regards applications for and granting of compulsory licences based on
the Commission activation measure and in the context of Regulation (EC) No
816/2006. Yet, to the extent Member States are to be involved in the implementation
of the compulsory licence, they would be also bound to report on the outcomes of
the process to the Commission. Finally, under this option a single contact point109
would be set-up so that non-EU countries110
could submit a request for coordination
to the Commission in case of cross-border supply and manufacturing, which would
require the granting of several national compulsory licences. In order to process the
request, the Commission would be assisted by an advisory committee composed of
Member States representatives. This committee would, along the lines of what
would exist for the EU domestic market under this option, ensure coordination and
cooperation among Member States and the EC, with the aim to provide support to
non-EU countries so that they can better plan their activities of manufacture and sale
for export under Regulation (EC) No 816/2006.
Figure 8: Simplified scheme for Option 3
A detailed scheme describing the procedural steps foreseen under Option 3 is provided in
Figure 20 and Figure 21 (Annex 6).
5.2.4 Option 4: EU-level compulsory licensing to complement existing EU crisis
instruments
Under this option, the triggers would be the same as under PO3 (i.e. two possible
triggers, namely either an EU level decision in the context of an existing EU crisis
instrument111
, or a request made to the EC by more than one Member State112
). The
Commission would adopt an activation measure granting a compulsory licence for cross-
border crisis management. The Commission would be assisted by an advisory committee
composed of Member States representatives113
. This option would lead to the issuance,
by the Commission, of one compulsory licence, applicable to the territory of several EU
countries or the whole EU, with its own procedure114
and conditions. PO4 would leave
unchanged national legislations on compulsory licensing115
. The patent owner(s) would
be able to share their views and provide information in the context of the discussions of
108
Member States would have to provide the EC with key information on the compulsory licence (the
subject matter of a CL, companies involved such as patent holders and/or manufacturers, the conditions
agreed, etc.).
109
The single contact point should be established at the Commission and act as a focal and coordination
point in case third countries face a situation when planning its activities under Regulation (EC) No
816/2006 that requires compulsory licences in more than one Member State.
110
Or applicants as identified by Article 6 of Regulation (EC) No 816/2006.
111
Along the lines of what is provided under PO3.
112
In case of a crisis with a cross-border aspect, along the lines of what is provided under PO3.
113
See footnote 101.
114
Including the appeal procedure, which will depend on the nature of the act (e.g. implementing act or
Commission decision) granting the compulsory licence. In contrast to PO3, there will be no national
granting decision and therefore no national appeal procedure.
115
Member States would retain full competence to grant national compulsory licences. This option would
just add an additional layer to the existing national schemes on compulsory licensing.
32
the advisory body116
. The Member States could initiate the procedure117
and would
participate in the advisory body118
. An appeal procedure would be set-up119
. In addition,
the Commission would have the possibility to review, upon motivated request, whether
the licence conditions are respected120
. In line with the identified objectives, PO4 would
focus on three building blocks as described below:
 Improve the key features of compulsory licensing: PO4 would allow the EC to
directly grant, through an activation measure, a compulsory licence for crisis
management. PO4 would specify the conditions of such EU-level compulsory
licence, including the purpose (i.e. manufacturing of this product, protected by
this(es) patent(s) to tackle a specific crisis), the duration (that will be limited to the
purpose121
), the remuneration122
, the territorial scope (including safeguards to avoid
diversion of goods to unauthorised territories), and the good collaboration
obligation123
. These conditions should consider the EU decision activating a crisis
mode or declaring an emergency, and the conditions therein (such as the duration
and territorial coverage). The efficiency and timeliness of EU-level compulsory
licence would be ensured by adequate governance design124
. In compliance with the
TRIPS Agreement, the EU-level compulsory licence would be non-exclusive and
non-assignable.
 Territorial reach of compulsory licensing: Under this option, the compulsory licence
could have an EU-wide effect. However, the activation measure would specify the
exact territorial scope, considering the crisis. The scope could be modified
depending on the circumstances (e.g. crisis expanding to other countries, need for
further manufacturing capacities). Under PO4, compulsory licences having a cross-
border effect could also be granted by the Commission in the context of Regulation
116
Just like under PO3, the e advisory body should consider the comments made by the patent owner(s).
117
This would certainly be the case when the trigger is outside an EU crisis instrument and where the
procedure leading to the granting of an EU-level compulsory licence would be a request made by more
than one Member State to the Commission. In the context of EU crisis instrument, the trigger would
usually be a Council decision, such as under SMEI, which would also involve Member States.
118
Including when the procedure is being initiated by some but not all Member States. In such case, all
Member States would be represented in the advisory body, so to allow exchange of information and views
on the need to issue a compulsory licence and the conditions (including the territorial scope) surrounding
such compulsory licence.
119
The appeal procedure would depend on the nature of the act granting the licence but would always
involve a judicial review, as requested under the TRIPS Agreement.
120
The Commission would also have the possibility to terminate the licence, subject to adequate protection
of legitimate interests, if the conditions of the licence are not respected.
121
If the compulsory licence is granted in the context of an EU crisis instrument, the duration of the
compulsory licence should be aligned to the duration of the emergency mode decided in the context of that
EU crisis instrument. If the compulsory licence is granted upon request of the Member States, the duration
will be specified in the EU-level compulsory licence, after having heard the advisory body (including the
patent owner(s) should it make comment on this aspect).
122
Criteria to determine the remuneration would be set-up. The remuneration would be specified in the act
granting the EU-level compulsory licence, after having heard the advisory body.
123
The patent owner(s) would have to collaborate in good faith. An obligation to disclose trade secrets
would not be provided.
124
Notably: a) the establishment of a single procedure and decision-making at EU level instead of multiple
procedures and decisions at national level; b) access to an accelerated procedure (e.g. no best effort
obligation to conduct negotiations); c) appeals against decisions should have no suspensive effect, so that
the licensee can already start producing under the compulsory licence, regardless of the outcome of the
proceedings.
33
(EC) No 816/2006 should the manufacturing of the pharmaceutical product be
spread across several Member States, subject to concerned Member States’
approval.
 Support to EU resilience: In the context of an EU decision activating a crisis mode
or declaring an emergency, this option would provide the possibility for the
Commission to grant EU-level compulsory licences for cross-border crises
management. PO4 would provide full harmonisation as regards the granting of
compulsory licence to tackle a cross-border crisis in the EU. It would build upon
and complement existing EU crisis instruments by providing an additional tool to
help tackle a crisis. Under this option, the Commission would have a consultative
role, to ensure participation of relevant stakeholders. The licensee(s) could be
identified by the Commission, Member States and/ or directly apply to benefit from
a compulsory licence. Yet, to the extent Member States are to be involved in the
implementation of the compulsory licence, they would be also bound to report on
the outcomes of the process to the Commission. Finally, as in PO3, a single contact
point would be set-up in the context of Regulation (EC) No 816/2006. However,
under PO4 the function of the single contact point goes beyond a coordination role.
PO4 would provide non-EU countries with the possibility to submit directly to the
single contact point (Commission) an application for an EU-level compulsory
licence in case of cross-border supply and manufacturing (see above, point on the
territorial reach of compulsory licensing). Under this option, the Commission
would retain its coordination role, assisted by the advisory body, as already provided
under PO3.
Figure 9: Simplified scheme for Option 4
A detailed scheme describing the procedural steps foreseen under Option 4 is provided in
Figure 22 and Figure 23 (Annex 6).
5.3 Discarded options
The possibility for a compulsory licence to cover other IP rights, and in particular plant
variety rights, design rights or copyright, was discarded. The possibility to grant a
compulsory licence for a Community plant variety right already exists125
. Designs
protection126
covers the appearance of a product and does not extend to the features of
appearance of a product that are solely dictated by its technical function. Since the
technical features of a design that could prove necessary to manufacture a critical good
are free of design rights, a compulsory licence does not appear necessary in the field. The
same reasoning applies to copyright which protects a specific expression of an idea or
creation. These ideas or creations can be expressed in another way should it be necessary
125
See supra, point 1.2.
126
A design means ‘the appearance of the whole or a part of a product resulting from the features of, in
particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its
ornamentation’ (Article 3 of regulation (EC) No 6/2002 of 12 December 2001 on Community design, see
also Article 1 of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on
the legal protection of designs).
34
to use them in the context of the manufacturing of crisis goods. The same applies to
computer programmes protected under copyright law127
.
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
6.1 Option 1 – Recommendation on compulsory licensing for crisis management
6.1.1 Improve the key features of compulsory licensing
Under Option 1, Member States would retain their margin of manoeuvre as regards the
features of their national compulsory licensing schemes. The recommendation envisaged
under PO1 could clarify and improve the features of national compulsory licensing
schemes for crisis management and improve coherence across Member States. Although,
the recommendation would raise awareness across Member States on the importance of
an effective and efficient compulsory licensing for crisis management, the risk remains
that not all Member States would fully implement it because of the non-binding nature of
the recommendation. PO1 could therefore have only a limited harmonising effect. In
addition, one deviation by a Member State (for instance an embargo period in the
Member State with the manufacturing capacities) would already suffice to block or
significantly impair the supply of crisis relevant goods produced under a compulsory
licensing in certain cross border situations. Consequently, Option 1 is expected to lead to
limited improvements, in terms of effectiveness and efficiency, of national compulsory
licensing schemes for crisis management.
6.1.2 Territorial reach of compulsory licensing
Under Option 1 compulsory licensing would remain in the remit of Member States and
their effect would be limited to the national territory. By clarifying the obligations and
flexibilities under the TRIPS agreement, the recommendation would bring legal certainty
as to the possible territorial reach of national compulsory licences, including on the
possibility to export a part of the goods manufactured under a compulsory licence to
another Member State. However, Member States would remain free to decide whether
and how to take advantage of these flexibilities. In addition, the lack of EU-wide
exhaustion would continue to limit the territorial reach of a compulsory licence. Multiple
compulsory licences128
would still be needed for distributing products produced under a
compulsory licence within the Single Market. Coherence between the national
compulsory licences would be subject to Member States’ willingness to carry out a joint
harmonising effort of their national granting decisions and procedures. Consequently, the
objective of giving national compulsory licences a more appropriate cross-border reach
in crisis would be achieved to a very limited extent under Option 1.
6.1.3 Support to EU resilience
By identifying the relevant EU crisis instruments and related transparency and
coordination requirements, the recommendation would clarify the role compulsory
licensing can play in the context of the different EU crisis instruments. In that respect, the
127
Article 1(2) of Directive 2009/24 of 23 April 2009 on the legal protection of computer program
provides indeed for that “protection in accordance with this Directive shall apply to the expression in any
form of a computer program. Ideas and principles which underlie any element of a computer program,
including those which underlie its interfaces, are not protected by copyright under this Directive.”
128
One in each of the manufacturing Member States and one in each of the importing Member States.
35
recommendation could support the EU resilience by reinforcing coherence between
national compulsory licences and EU crisis instruments. However, the decision to trigger
the compulsory licence would remain in the Member Sates’ remit. A seamless
embedding of national compulsory licensing schemes into EU crisis instruments is
therefore not to be expected. The promotion of good practices in terms of cooperation,
transparency and information sharing between Member States, including for compulsory
licences for export purposes to non-EU countries would facilitate interaction among
Member States and between Member States and the Commission. However, divergences
regarding the granting authority of a compulsory licence would remain. National actors
would remain diverse, which would frustrate the possibility of communication between
authorities across borders and could ultimately create barriers against engaging in holistic
and uniform crisis responses across the EU.
6.1.4 Impacts per stakeholder group
As PO1 would be based on non-binding actions, the cost and benefits are to a large extent
uncertain, as they depend on individual decisions of each Member State. First, the
countries which decide to apply the recommendation on good practices would bear
certain one-off cost of implementing them. Second, if the majority of Member States
follows such approach, then it could be assumed that impact discussed in Table 2 below,
can indeed materialise in the event of a cross-border crisis.
Table 2: Impacts on stakeholders in the event of a cross-border crisis - Option 1 compared to the baseline
Advantages Disadvantages
Patent owners (0/+) Somewhat lower costs of compulsory licensing negotiations, if
recommendation applied by majority of MS.
(0/+) Increased legal certainty (e.g. more clarity on the scope and
what amount of remuneration may be expected), if recommendation
applied by majority of MS.
/
Manufacturers
– potential
licensees
(0/+) Somewhat lower costs of compulsory licensing negotiations if
recommendation applied by majority of MS.
/
EU countries (0/+) Marginally lower costs of running the compulsory licensing
procedure as EU countries can rely on additional information or
support from other MS, but the main cost of launching and
implementing the compulsory licensing procedure (negotiations with
the patent holders and manufacturers) remain unchanged.
(0/-) Cost of
information
exchange with other
EU countries and
the EC (optional).
The general
public (EU
citizens)
(0/+) Marginally lower risk of delays or unavailability of critical
products during crisis, if recommendation applied by majority of MS.
/
Non-EU
countries
(0/+) Somewhat lower costs and improvement in legal certainty as
regards compulsory licensing for export, if recommendation applied
by majority of MS.
/
Note: (0) neutral impact; (+) minor positive impact; (++) positive impact; (+++) significant positive impact; (-) minor
negative impact; (- -) negative impact; (- - -) significant negative impact
The impacts on patent owners would stay broadly the same as in the baseline. The cost
of participating in compulsory licensing negotiations would still be borne in each
jurisdictions concerned, but they could be marginally lower if the compulsory licence
features gain in coherence across the EU. Recommendations could improve legal
certainty of patent holders, for example as regards the determination of remuneration
(still, the remuneration to compensate the loss of income is likely be lower than the one
to be received in voluntary agreements). Potential licensees would not experience much
difference compared to the baseline scenario, except for a more streamlined approach of
negotiations, and consequently marginally lower participating costs, should
36
recommendations be implemented at national level. EU countries could entail costs
should they decide to implement the recommendation as regards cooperation,
transparency and information sharing. The costs of running compulsory licensing
procedures could be decreased should all Member States adopt a more coherent approach
to national compulsory licensing and share information thereon. Under the condition that
the respective Member State makes use of the recommendation, citizens might profit
from an improved welfare as their possibility of gaining access to critical products would
be more effective. If Member States would implement EU-wide best practices on
cooperation, transparency and information sharing for export purposes, non-EU
countries might benefit of increased legal certainty and some administrative savings.
6.2 Option 2 – Harmonisation of national laws on compulsory licensing for crisis
management
6.2.1 Improve the key features of compulsory licensing
Under PO2, a directive would be adopted to approximate national laws on the grounds,
procedures, scope, and conditions of compulsory licensing for crisis management. This
would create a certain degree of harmonisation on e.g. key aspects of the procedure, the
competent granting authority and criteria for the calculation of the remuneration. This
would improve and clarify the features of national compulsory licensing for crisis
management across the EU. However, the Member States would remain competent to
determine whether a crisis exists and whether to grant a compulsory licence. Hence, the
risk would remain that the directive would not be implemented and applied in a uniform
manner due to existing differences in national law proceedings and judicial traditions.
Those minimum standards of harmonisation could result in incoherent national
compulsory licences for crisis management.
6.2.2 Territorial reach of compulsory licensing
The harmonisation of national schemes envisaged under PO2 could facilitate the cross-
border supply of goods as both, the compulsory licence granted in the manufacturing
Member State and those granted in the importing Member States, would be based on
similar rules. However, this would only slightly improve the situation if manufacturing
capacities are located in multiple Member States. The lack of exhaustion would still
require each importing Member States to issue a licence to import the critical goods.
6.2.3 Support to EU resilience
Under PO2, clarification will be provided that national compulsory licences could also be
issued in the context of an EU decision activating or declaring a crisis or emergency
mode. Thereby, the risk of frictions and opposing decisions resulting from the two levels
of decision making (at EU level and at national level) could be mitigated (e.g. the risk
that a national authority denies the existence of a crisis in the context of its decision on a
compulsory licence, despite a decision at EU level declaring a crisis and activating an
emergency mode). Transparency and information sharing obligation would allow
national compulsory licences to be better coordinated and therefore to provide a better
support to EU crisis. As the granting authority of a compulsory licence is one of the
aspects subject to harmonisation, Option 2 could facilitate cooperation and coordination
among Member States and between Member States and the Commission.
37
6.2.4 Impacts per stakeholder group
The impacts of PO2 per stakeholder group are summarized in Table 3 below.
Table 3: Impacts on stakeholders in the event of a cross-border crisis - Option 2 compared to the baseline
Advantages Disadvantages
Patent owners (+) Somewhat lower costs of compulsory licensing negotiations
as rules more coherent across MS.
(+) Some improvement in legal certainty (e.g. clarity on the
scope and what amount of remuneration may be expected), as
rules more coherent across MS.
(0/-) Loss of control over
patent rights, if
harmonisation leads to
wider geographical scope
of CL.
Manufacturers
– potential
licensees
(+) Somewhat lower costs of negotiations, as rules more
coherent across MS.
/
EU countries (0/+) Potentially lower costs of running the compulsory
licensing procedure as EU countries can rely on additional
information or support from other MS, but the main cost of
launching and implementing the compulsory licensing procedure
(negotiations with the patent holders and manufacturers) remain
unchanged.
(+) Better exchange of information about availabilities of
product(s), in case of local shortages or cross-border value chain
disruptions.
(-) Cost of information
exchange with other MS;
(-) Cost of reporting to
the EC on the
implemented CL.
The general
public (EU
citizens)
(+) Marginally lower risk of delays or unavailability of critical
products during crisis, as rules more coherent across MS.
/
Non-EU
countries
(+) Increased legal certainty and administrative savings due to
EU countries information sharing and transparency obligation as
regards compulsory licensing for export.
/
Note: (0) neutral impact; (+) minor positive impact; (++) positive impact; (+++) significant positive impact; (-) minor
negative impact; (- -) negative impact; (- - -) significant negative impact
Patent owners and potential licensees would benefit from this option as increased
clarity and more coherent rules would improve legal certainty and facilitate negotiations.
This would reduce their costs in participating in such negotiations as well as providing
patent owners with a better framework for determining the remuneration. However, they
would still face costs in each Member State launching a compulsory licensing process.
EU countries would face one-off adjustment costs in the context of the implementation
of the directive through the adaptation of their national compulsory licensing schemes.
While Member States would benefit of an improved information exchange and EC
support (reducing the costs related to compulsory licence procedure), the obligation on
information sharing and reporting would at the same time incur a minor recurring
administrative cost for Member States, each time they (envisage) grant(ing) a
compulsory licence. However, these costs would remain low because compulsory
licensing is a last resort instrument, expected to be rarely used. In case of crisis, EU
citizens would face a marginally lower risk of unavailability of critical products during
crisis due to the reduction of fragmentation in national compulsory licensing schemes. As
the directive would contain obligations regarding cooperation, transparency and
information sharing in the context of compulsory licensing for export purposes, non-EU
countries would benefit of increased legal certainty throughout the Union and
administrative savings.
38
6.3 Option 3 – Harmonisation plus a binding EU-level measure on compulsory
licensing
6.3.1 Improve the key features of compulsory licensing
Under Option 3, all Member States would introduce in their national law a compulsory
licensing scheme for cross-border crisis management triggered by an EU-level decision
or initiated by concerned Member States. Albeit the co-existence of two triggering
mechanisms may seem to add complexity to the system, yet it provides for more
flexibility to address all possible types of cross-border crisis. The national compulsory
licences granted under this scheme would be based on a Commission activation measure.
This would provide full harmonisation on some of the key conditions (e.g. territorial
scope, duration) and allow clarity and coherence of the different national compulsory
licences. Under this option, Member States would be required to grant a compulsory
licence in certain cases. This option would therefore result in improving the legal
framework on compulsory licensing for cross-border crises. However, although PO3
would require Member States to set-up accelerated procedures, these procedures can
differ nationally. In addition, some conditions such as remuneration would be decided at
national level. Therefore, despite harmonised criteria for determining the remuneration,
the actual assessment can greatly vary from one Member State to another. Consequently,
despite the harmonisation provided under Option 3, coherence and clarity would not be
optimal as regards all the features of the national compulsory licences.
6.3.2 Territorial reach of compulsory licensing
Option 3 would provide a dynamic and efficient solution as regards the territorial scope
of the compulsory licence: the licence would cover all EU countries being affected by the
crisis and its territorial scope could be modified depending on the evolution of the crisis.
National granting decisions would still be needed for each Member State where the
manufacturing of products will take place. However, importing Member States would no
longer need to issue a compulsory licence, as national granting decisions would have a
cross-border effect, coupled with an exhaustion for the EU market. Consequently,
products manufactured under a national compulsory licence having its source in an EU
activation measure could be exported to other EU countries without the need for the
importing countries to issue a compulsory licence. This option would also solve the
discrepancies that may currently exist between the compulsory licence to export and the
one to import (cf. supra).
6.3.3 Support to EU resilience
This option would complement other EU crisis instruments as the activation of a crisis
mode under an EU crisis instrument, such as SMEI, can be the trigger leading to the
granting of one or more compulsory licence(s). The reliance on the existing advisory
body when the trigger originates in an EU crisis instrument, also ensures an optimal
coherence with EU crisis instruments. The transparency and information exchange
obligations for Member States as regards applications for and granting of compulsory
licences based on the Commission activation measure and in the context of Regulation
(EC) No 816/2006 would improve the coordination of compulsory licences in the EU.
The support provided by the Commission to third countries would facilitate decision-
making in the context of Regulation (EC) No 816/2006 in case multiple compulsory
licences in different Member States are required to address the third country’s needs.
Both, non-EU countries and Member States would benefit from improved cooperation at
39
EU level. Non-EU countries would benefit from greater clarity as regards the
manufacture and sale for export under Regulation (EC) No 816/2006. However, in the
absence of a compulsory licence with an EU-wide effect for export to third countries,
they would still need to apply for several compulsory licences if the cross-border
manufacturing chain of the product concerned requires it and may face legal uncertainty
in that respect (including as regards the possibility to allow cross-border manufacturing
of the final product).
6.3.4 Impacts per stakeholder group
The impacts of PO3 per stakeholder group are summarized in Table 4 below.
Table 4: Impacts on stakeholders in the event of a cross-border crisis - Option 3 compared to the baseline
Advantages Disadvantages
Patent owners (+ +) Lower costs of negotiations, as they would partially be run
at EU level instead of multiple procedures in each EU country
concerned.
(+ +) Improvement in legal certainty (e.g. clarity on the scope
and what amount of remuneration may be expected), as rules
more coherent across MS.
(- -) In case of a broader
geographical scope of a
CL, wider loss of control
over patent rights.
Manufacturers
– potential
licensees
(+ +) Lower costs of negotiations, as they would partially be run
at EU level instead of multiple procedures in each EU country
concerned.
(+) Lower costs of adapting the manufacturing facilities to the
production of CL-covered item(s) due to economies of scale, if
harmonisation leads to wider geographical scope.
/
EU countries (+ +) Lower costs of running the compulsory licensing
procedure (no or limited negotiations with the patent holders or
manufacturers), as EU countries will mainly implement a
decision made at the EU level (D).
(+) Better exchange of information about availabilities of
product(s), in case of local shortages or cross-border value chain
disruptions
(+) Better decision-making and cooperation in the context of
compulsory licensing for export to non-EU countries (E).
(-) Cost of participating
in the advisory committee
assisting the single
contact point (E).
(-) Cost of reporting to
the EC on the
implemented CL.
The general
public (EU
citizens)
(+ +) Lower risk of delays or unavailability of critical products
during crisis, as rules more coherent across EU countries (D).
/
Non-EU
countries
(+ +) Increased legal certainty and administrative savings due to
better coordination at EU level (E).
/
Note: (0) neutral impact; (+) minor positive impact; (++) positive impact; (+++) significant positive impact; (-) minor
negative impact; (- -) negative impact; (- - -) significant negative impact; (D) applies only in case of an EU-level
compulsory licensing for domestic purposes, (E) applies only in case of compulsory licensing for export purposes (in
the context of Regulation (EC) No 816/2006).
Under PO3, patent owners would benefit from a reduction of costs as regards the
participation in the compulsory licensing process, since the process will be centralised to
a large extent. This would streamline the negotiations on many aspects (e.g. duration,
scope) as there will no longer be differences between the national compulsory licences
granted on the basis on the activation measure. Nevertheless, patent owners would still
face cost in each country issuing a compulsory licence, as they would need to negotiate
not harmonised aspects (e.g. remuneration) and participate in the national procedures.
They would however benefit from increased legal certainty through, on the one hand, the
single EU binding decision and, on the other hand, harmonisation of aspects left for the
national level (i.e. elements such as the national procedure or the remuneration). Under
this option, patent owners may experience a more important loss of control on their
patent rights as this option would give a broader effect to a national compulsory licence,
40
allowing it to have a cross-border effect. Overall, the situation of potential licensees
would improve under PO3. They would benefit from the centralised procedure as this
would decrease their cost of participating in negotiations. In addition, the wider territorial
scope of the licence would allow them to benefit from economies of scale (i.e. larger
volumes of production) when manufacturing the required items (also in terms of lower
cost for adapting the production facilities). EU countries would bear the adjustment
costs resulting from the implementation of the directive into their national law. They
would also face some minor administrative costs, linked to the transparency obligation
(reporting). On enforcement costs, Member States would also bear the cost of
participating in the advisory committee, but overall they would benefit from the
centralised procedure. Costs of direct negotiations with the patent owners and the
manufacturers would be replaced by the costs of participating in the EU level
negotiations (the latter are expected to be lower than handling the entire negotiations
process nationally i.e. fewer staff involved per case per Member State). The cost of
granting the national compulsory licence based on the Commission’s activation measure
would remain (i.e. the issuance of a government order granting a compulsory licence for
Member States with manufacturing capacities on their territory). Member States with no
manufacturing capacities would not have to bear any cost related to a national
compulsory licence as a licence to import would no longer be needed. Member States
would benefit from a more coherent approach at EU level when tackling crisis, and in
particular as regards the use of compulsory licence in conjunction with another EU level
crisis instrument. As regards the export to non-EU countries, Member States would
benefit from an improved decision-making and cooperation due to the establishment of a
single contact point (the Commission) assisted by an advisory committee. At the same
time, the participation in the advisory committee could generate some minor costs for
Member States, but only when such situation occurs. In case of a crisis, EU citizens
would benefit from PO3 as it would improve the EU’s ability to conclude voluntary
agreements and its ability to issue an effective and efficient compulsory licence for the
whole EU, including in case of cross-border supply chain. Non-EU countries would
benefit from administrative savings due to the increased coordination at EU level.
6.4 Option 4 – EU-level compulsory licensing to complement existing EU crisis
instruments
6.4.1 Improve the key features of compulsory licensing
Under PO4 the Commission would directly grant a compulsory licence and specify the
conditions under which this licence is granted. The granting decision would specify all
the conditions of the compulsory licence, including the remuneration. These conditions
would be the same for all territories where the compulsory licence applies. This would
ensure an optimal clarity and coherence as regards the conditions of the compulsory
licence. Since there would only be one procedure – at EU level – there would not be
divergences due to national decisions and/ or implementation. Consequently, by relying
on a fully harmonised scheme, Option 4 provides an optimal coherence and clarity as
regards all the features of compulsory licensing for crisis management.
6.4.2 Territorial reach of compulsory licensing
PO4 would provide an optimal solution as regards the territorial scope of the compulsory
licence: one single compulsory licence would cover all EU countries being affected by
the crisis and all EU countries having the relevant manufacturing capacities. By creating
an EU-level system, this option would guarantee a solution that is fully coherent and
41
equally applicable in all Member States. A unique compulsory licence offers an efficient
compulsory licensing scheme, which avoids national divergences likely to slow down an
EU reply to a cross-border crisis. The cross-border effect guarantees an effective
compulsory licensing scheme as it matches the reality of the Single Market and its
inherently cross-border supply chains and can supply the whole EU market (instead of
one country). A CL applicable on a wider territory can serve as an incentive for licensees
to change their production line to accommodate the need for critical goods.
6.4.3 Support to EU resilience
Just like in PO3, this option would complement other EU crisis instruments as the
activation of a crisis mode under an EU crisis instrument, such as SMEI, can be the
trigger leading to the granting of a compulsory licence. The reliance on the existing
advisory body when the trigger originates in an EU crisis instrument, also ensures an
optimal coherence with EU crisis instruments. In addition, such EU-level system would
provide the EU and its Member States with an efficient and credible compulsory
licensing system. This would give more bargaining power to the EU when negotiating
voluntary agreements, hence supporting other EU crisis instruments. Should voluntary
agreements fail, the EU would still have the possibility to rely on compulsory licence to
start manufacturing of critical goods in the EU and provide an EU response,
complementing other crisis measures. As in PO3, the coordination at EU level for third
countries would facilitate decision-making in the context of Regulation (EC) No
816/2006, should different compulsory licences be required to address the third country’s
needs. Non-EU countries would benefit from the possibility to only have one compulsory
licence covering multiple EU countries, in case of cross-border manufacturing.
6.4.4 Impacts per stakeholder group
The impacts of PO4 per stakeholder group are summarized in Table 5 below.
Table 5: Impacts on stakeholders in the event of a cross-border crisis - Option 4 compared to the baseline
Advantages Disadvantages
Patent owners (+ +) Lower costs of negotiations, due to a single procedure
at EU level instead of multiple procedures in each MS
concerned.
(+ + ) More legal certainty (e.g. clarity on what level of
remuneration may be expected), as a single procedure at EU
level instead of multiple procedures in each EU country
concerned.
(- -) In the event of a
broader geographical
scope of a CL, wider loss
of control over patent
rights.
Manufacturers
– potential
licensees
(+ +) Lower costs of negotiations, due to the single procedure
at EU level instead of multiple procedures in each EU
country concerned.
(+) Lower costs of adapting manufacturing facilities to the
production of the item(s) covered by the licence, due to
economies of scale, if EU-level compulsory licensing leads to
wider geographical scope.
/
EU countries (+ + +) Significantly lower costs of running the compulsory
licensing procedure (no negotiations with the patent holders
or manufacturers), as EU countries will only implement a
single decision made at EU level (D).
(+) Better exchange of information about availabilities of
product, in case of local shortages or cross-border value
chains disruptions.
(+) Better decision-making and cooperation in the context of
compulsory licensing for export to non-EU countries (E).
(-) Cost of participating
in the advisory
committee assisting the
single contact point (E).
(-) Cost of reporting to
the EC on the
implemented CL.
42
The general
public (EU
citizens)
(+ + +) Significantly lower risk of delays or unavailability of
critical products during crisis, as rules are consistent across
all EU countries (D).
/
Non-EU
countries
(+ + +) Increased legal certainty and administrative savings
when accessing critical goods in case of cross-border supply
chains due to direct coordination at EU level (E).
/
Note: (0) neutral impact; (+) minor positive impact; (++) positive impact; (+++) significant positive impact; (-) minor
negative impact; (- -) negative impact; (- - -) significant negative impact; (D) applies only in case of an EU-level
compulsory licensing for domestic purposes, (E) applies only in case of compulsory licensing for export purposes (in
the context of Regulation (EC) No 816/2006).
Under PO4, patent owners would benefit from a reduction of costs and legal uncertainty
since, in the absence of national procedures, negotiations would be limited to
participation in one EU-level procedure. In addition, they would gain legal clarity as the
remuneration will be set at EU-level, no longer at national level. However, patent owners
would still face an important loss of control on their patent rights since the impact of
compulsory licensing would no longer be limited to a given Member State. Under PO4,
the greater territorial reach would also extend to compulsory licences for export to a non-
EU country. Overall, the situation of potential licensees would improve under PO4.
They would benefit from the centralised procedure and the wide territorial scope of the
licence that can bring economies of scale. EU countries would need to bear limited
adjustments costs as PO4 would provide an EU-level compulsory licence, through a
regulation, on top of existing national legislation. They would face some monitoring
costs in the event of a crisis, linked to the transparency obligation. However, better
sharing of information would also allow a reduction of costs for Member States as it
could help identifying best practices. On enforcement costs, Member States would also
bear the cost of participating in the advisory committee, but overall they would benefit
from the centralised procedure, as costs linked to the negotiations with the patent owners
and the manufacturers would be incurred solely at EU level (i.e. although the costs of
participating in the EU level negotiations would remain, they are expected to be lower as
tasks would be shared among many countries). The new compulsory licensing rules
would also strengthen EU bargaining position as 27 countries would run negotiations
together and at once. In case of crisis, EU citizens would greatly benefit from this option
as it would improve the EU’s ability to issue an effective and efficient compulsory
licence for the whole EU, including in case of cross-border supply chain disruptions.
Non-EU countries would also benefit from this option as this would provide the
possibility to rely on a compulsory licence covering a cross-border supply chain.
6.5 Common impacts
6.5.1 Impacts on fundamental rights
This initiative will have a clear impact on fundamental rights as it would provide an
additional tool to face crises, including health-related (right to health care – article 35 of
the Charter) or environmental crises (right to environmental protection – article 37 of the
Charter). Through the increased probability of supply of critical goods and services the
most fundamental needs and rights of EU citizens such as safety and health, in a crisis
setting, would be more swiftly and efficiently catered to.
Collective licensing, of course, also concerns the right to intellectual property of patent
owners (article 17(2) of the EU Charter of fundamental rights – the ‘Charter’), as
compulsory licensing partially deprives patent owners of the control of their rights. The
extent to which this initiative impacts these rights – as compared to the baseline – is
discussed in section 6.5.3 below. IP rights are not absolute rights and limitation to the
43
exercise of these rights are allowed under the Charter, provided that the proportionality
principle is respected. In that respect, this initiative provides for that compulsory
licensing would remain an exceptional mechanism, with a scope limited to cross-border
crises. In addition, compulsory licence would always be granted on a non-exclusive basis
and subject to a definite duration. Finally, patent owners would have the possibility to
share their position as regards the granting of a compulsory licence and the conditions
surrounding it. An important aspect of the conditions concerns the ability for patent
owners to receive a fair compensation for the limitation of their right. In that respect, the
present initiative provides for that patent owners would always be entitled to receive an
adequate remuneration in respect of each compulsory licence granted under this
initiative. This remuneration would be determined, following clear criteria set in the EU
legislation. In addition, patent owners would be entitled to share their position as regards
this remuneration, in the context of discussions within the advisory body. As explained in
the next title, this initiative may have a positive impact on other fundamental rights as it
would provide an additional tool to face crises, including health-related (right to health
care – article 35 of the Charter) or environmental crises (right to environmental
protection – article 37 of the Charter).
6.5.2 Social and environmental impacts
Improved EU readiness to tackle a major crisis would bring positive social impacts, as it
could help limit various disruptions to everyday societal processes by curbing the crisis
or eliminating it altogether. Notwithstanding that societal disruption can be caused by a
crisis in any domain (e.g. threats to the environment, national security, etc.), the recent
COVID-19 pandemic provided multiple examples of disruptions that could have been
avoided with a more effective resilience tool. They included challenges to socio-
economic activities underpinning people’s lives (e.g. the loss in GDP due to restrictive
measures, limited access to education, businesses closed due to lock-downs,
unemployment) affecting health and wellbeing (COVID-19 death toll, implications
related to mental health, etc.). The exact amount of potential indirect economic impacts
that can be avoided is impossible to quantify129
, whereas the cost of major crisis can be
paramount to any economy130
.
As far as the environmental impacts are concerned, they will predominantly depend on
the type of crisis that the EU may face in the future, assuming that it would be targeted
by the new initiative (i.e. addressing such crisis would require access to patent protected
products). If the crisis concerns environmental threats, the positive impacts of the
initiative could be decisive in increasing access to products and technologies able to
tackle the crisis. Finally, since no environmental legislation is affected by this proposal
and its principal objective is to streamline and harmonise compulsory licensing
procedures in cross-border crises, no significant harm to the environment is expected
129
The UN noted that “without urgent socio-economic responses [to the COVID-19 pandemic], global
suffering will escalate, jeopardizing lives and livelihoods for years to come. Immediate development
responses in this crisis must be undertaken with an eye to the future. Development trajectories in the long-
term will be affected by the choices countries make now and the support they receive”,
https://www.undp.org/coronavirus/socio-economic-impact-covid-19
130
According to CEPI “The COVID-19 pandemic resulted in an unprecedented economic contraction in
2020, with EU real GDP falling by 6.1%, more than during the global financial crisis.”, source:
https://cepr.org/voxeu/columns/eu-economy-after-covid-19-implications-economic-governance
44
under any of the options analysed. Potential impacts on relevant SDGs are discussed in
Annex 3.
6.5.3 Economic and competitiveness impacts
This initiative rests on a precautionary principle regarding unforeseeable future crisis
events, with a small probability but immense economic aftermath. For this reason, the
economic and competitiveness impacts strictly hinge on a balance of probabilities. It is
fair to assume that the probability of crises events remains unaffected by this initiative.
At the same time, the likelihood that any given crisis requires a Single Market response
would normally be higher over time, as EU value chains increasingly interweave.
This initiative is intended to increase the likelihood of supply and decrease the lead
time of such supply of patent protected critical goods, should a cross-border crisis
happen. In a situation of a health or an environmental crisis, any improvement in the
expected supply of such critical products – however marginal – generates economic and
competitiveness benefits of macro-economic proportions. That in itself trumps all other
economic and competitiveness effects.
Regarding the potential trade-off between keeping the incentives for innovation through
IP protection131
and ensuring at the same time access to critical products in cross-border
crisis situations through compulsory licensing, it is possible that frequent recourse to
compulsory licencing could in the long term carry the risk of dis-incentivising research
and development132
(i.e. compulsory licensing might have a chilling effect on innovation
and investment by IP holders concerned, as it marginally reduces the overall revenues
from innovation). However the likelihood of using a compulsory licence for crisis
management is extremely low and its duration limited. Consequently, the potential
revenue loss is expected to be negligible compared to the overall revenue from the
patented product and the proposed initiative is not expected to impact long-term
innovation investments of the patent holder. Furthermore, of import here is assessing
solely the incremental impact of this initiative, as compared to the status quo – namely
the existence of national compulsory licences. This counterfactual boils down to the
change in the frequency of compulsory licensing events and their size (volume of critical
goods). On the one hand, the intended streamlined and unitary EU compulsory licensing
procedures lower the compliance and enforcement cost of their launch. On the other
hand, this weakens the case for dis-coordinated national compulsory licences and
increases the incentive for voluntary solutions (deterrence effect). When it comes to the
volume of goods produced under a compulsory licence, the demand for critical goods is
fairly fixed, by the number of EU citizens in need in a crisis situation. Yet, given the
scope of proposed alignment (depending on the option) compulsory licences could cover
wider geographic scope, as compared to the baseline, because some previously existing
differences in national rules would be removed (e.g. embargos, exemptions in material
scope or sectorial coverage, etc.). This may imply that a greater volume of goods may be
ultimately affected. Still, the new compulsory licensing rules would become more orderly
131
“Intellectual property rights are designed to promote the creation of innovations and thus to promote
economic advance and consumer welfare. This occurs by giving the innovator an exclusive legal right to
the economic exploitation of his innovation for a period of time; the reaping of profits serves both to
reward the innovator for his investment and to induce others to strive to innovate in the future.”, source:
“Competition policy and intellectual property rights”, OECD 1989, p.10.
132
“The excessive use of compulsory licensing, for example, could lead to increased secrecy and lower
investment in R & D.”, source: Idem, p.12
45
and predictable, which – if anything – should make the business climate more amendable
to innovation and investment.
Last but not least, an orderly and modern regime for an EU compulsory licence should
provide comfort to the civil society that in case of need critical goods will be effectively
and swiftly supplied. This also allows a predictable and TRIPS compliant compulsory
licensing scheme in the EU, which should prove beneficial to EU competitiveness and
licensors alike.
6.5.4 Summary of cost and benefits specific to the compulsory licensing procedures
The costs and benefits specific to compulsory licensing procedures and identified across
all four options, can be grouped into the following main categories: one-off and recurrent
costs/benefits (see Figure 24, Annex 6).
The one-off implications consist of cost that would be borne shortly after the proposed
instrument enters into force (e.g. the legislation is enacted). They would mainly focus on
direct compliance costs for the authorities (Member States and the EU institutions),
linked with the need to adjust the existing legal provisions on CL. It mainly affects PO2
to PO4, as PO1 is voluntary so the extent of such actions is unknown. As far as the
Commission is concerned, we assume that the activity of developing new
recommendations or legislation forms part of its normal activities. There will be no one-
off direct adjustment cost for firms. There will be no one-off direct benefits of the
proposal either.
As for the second category of cost/benefits, namely the recurrent ones, they would occur
only if a cross-border crisis hits the EU and they would consist of the following:
 Direct compliance and enforcement costs/benefits for authorities in charge of the
negotiations and implementation of the terms of the compulsory licence, as well as
the provision of information (i.e. the monitoring costs due to the reporting
obligation), see Figure 10 below.
Figure 10: Task division between the Options, as compared to the baseline (PO0)
Most of these costs would materialise anyway, if - in the absence of the proposed
changes - the same compulsory licensing negotiations and implementation were to
be conducted at national level. In other words, the cost of compulsory licensing
negotiations and implementation at national level would stay unchanged, when
compared to the status quo. If national negotiations were to be replaced by the EU-
level negotiations, the cost for Member States might stay unchanged or actually
decrease as the same effort would be shared among several countries.
The collection of basic information on compulsory licensing for the reporting
obligations would be carried out by Member States133
as part of the normal
133
As explained in section 5, the reporting obligation would cover: the subject matter of a CL, MS
concerned, companies involved (patent holders and/or manufacturers), and the conditions agreed.
46
documentation of any compulsory licensing procedure - the additional cost of such
task is therefore judged to be very low. Concretely, in PO2 the reporting obligation
would generate some additional small cost of sharing information with the EC, but it
would affect only the Member State where a compulsory license is to be granted in
the event of a cross-border crisis. In PO3 and PO4 the EC would be directly involved
in the compulsory licensing negotiations, so no additional information sharing by
Member States would be needed in this respect. Yet, under PO2, PO3 and to a lesser
extent under PO4, Member States would still need to report on the implementation
of the CL, for which the existing administrative procedures should be used. As the
reporting requirements would apply only in the event of a cross-border crisis, hence
such costs would be rare. Finally, the reporting should not require any additional
infrastructure nor data collection, therefore the digital impacts are judged to be not
relevant in the context of this initiative134
.
 Direct compliance costs/benefits for firms (i.e. patent holders, as well as the
manufacturers or potential licensees): the costs of participating in compulsory
licensing procedures would stay broadly the same as long as they remain at the
national level (i.e. PO2 or partially PO3), with some potential marginal benefits due
to increased coherence (lower legal uncertainty). However, whenever the
compulsory licensing negotiations take place at EU-level instead of fragmented and
overlapping processes carried out in several Member States they would be the
source of cost savings for firms. The central procedure is estimated to replace
roughly 4-5 procedures in each jurisdiction135
. In such case, the savings for
companies would be estimated at 75% to 80% of resources that would be needed
otherwise, such as in-house staff or costs of external services, legal assistance, etc.
 Indirect wider socio-economic benefits for the EU citizens (general public)
stemming from the timely availability of products needed in crisis and the fact that
the crisis could be marginally shorter and/or constricted (e.g. affects less sectors
than otherwise would be the case) and that severe economic repercussions are
avoided.
Additionally, the European institutions can also bear certain direct costs linked with this
initiative. In case of a cross-border crisis the Commission services would need to ensure
good governance of the overall process and run the central compulsory licensing
negotiations (PO3 and PO4), or grant and implement the CL. As for the EU-level CL,
such additional costs would appear mainly if none of the existing emergency bodies or
instruments (e.g. SMEI or HERA coordination committees) can be re-used to take up this
role. If a new sector-specific body needs to be set up136
, then the Commission would bear
the relevant costs, but given their ad hoc character - predominantly by drawing on
resources and expertise already available in the Commission services137
. As a cross-
134
No particular data exchange systems are envisaged, the CL negotiations would take place as either
physical meetings or remotely using existing secured ICT technologies.
135
Based on the estimate of the average number of Member States where Covid-related patents are active,
as explained in section 2.2 (for further details see Annex 4 and 6).
136
Yet, this role could be undertaken by the authorities competent for compulsory licensing for export
purposes to be designated under Regulation (EC) No 816/2006, see footnote 101.
137
While it is very difficult to estimate the costs of such process as there is no similar precedent, it is
assumed that CL negotiations should not take longer than 5 full-day meetings (40 hours) involving a Head
of unit, 2 desk officers and secretariat support, while the monitoring of CL implementation might involve 1
FTE over the period of 6 months per a CL case (so 1/6 of FTE per month on average).
47
border crisis requiring the granting of a compulsory licence is assumed to be rare, these
tasks should be undertaken by the available commission staff, also assuming certain
flexibility and cooperation between Directorates General, especially when the crisis
concerns their policy area.
The direct and indirect benefits of a well-functioning compulsory licensing system
for crisis management are assumed to greatly outweigh the above mentioned minor
direct compliance and enforcement costs, especially when compared with the indirect
wider socio-economic impacts of a timely access to essential products needed to combat
a crisis. Given the exceptional character of compulsory licencing, no significant
administrative costs are expected as a result of the proposed initiative.
7 HOW DO THE OPTIONS COMPARE?
As discussed in the objectives, a compulsory licensing system should be able to
efficiently tackle EU cross-border crisis in a timely manner and guarantee the supply of
critical goods and technologies across the Single Market, even in the absence of
voluntary agreements. It should also protect investment in innovation by adequately
safeguarding the interests of IP owners. Lastly, it should offer a coherent and coordinated
approach, in line with other EU crisis instruments in order to reinforce EU resilience.
7.1 Comparison of options against the effectiveness and efficiency criteria
Compulsory licensing for crisis management requires specific features that would ensure
compulsory licences to be effectively granted to tackle the crisis (i.e. adequate ground
and scope) and allow the efficient granting of a compulsory licence, in a swift manner.
Clarification of these features – and their actual implementation – is therefore
necessary to fulfil effectively and efficiently the general objective of having a
compulsory licensing scheme that enables the EU to timely tackle crises. In that respect,
PO1 is the least efficient option as it does not require Member States to implement these
features in their national law. PO2 and PO3 would increase the clarity and coherence
since they require Member States to harmonise some features. However, the
harmonisation does not cover all features, such as the remuneration (PO3) or the trigger
(PO2). In addition, divergences could still exist across Member States at the
implementation phase. Granting would also remain national, opening the door for
divergent practices and timing, when executing the national decisions. This would result
in less coherence between national compulsory licences. In contrast, PO4 provides clarity
as regards the features of the compulsory licence, as well as coherence, since there would
be one single EU-level compulsory licence.
A compulsory licence to tackle cross-border crises could only be effective if it applies to
the countries manufacturing the critical goods, as well as those facing the crises. The
ability to export goods manufactured under a compulsory licence from one Member State
to the other is therefore a key element. PO1 and PO2 prove insufficient in that respect
since they allow at best the export of goods. Such solution is impracticable in case of
cross-border supply chain. In addition, the lack of exhaustion would still require
importing Member States to issue a licence. PO3 and PO4 provide a better solution as
they both provide for an EU-wide effect to the compulsory licences (i.e. both are
effective in guaranteeing a territorial scope that fits cross-border crises), whereas PO4 is
the most efficient as regards compulsory licensing for export, as it also allows a cross-
border effect in this case.
48
All options can support other EU crisis instruments by ensuring that compulsory
licences can be used in that context, albeit with different degree of effectiveness and
efficacy. PO1 scores low on this objective as it solely provides for the possibility for
national compulsory licence to be granted in the context of EU crisis instruments. PO2
provides a better solution as this option would explicitly make the link between national
compulsory licences and EU crisis instruments, mitigating the risk that a Member State
denies the granting of a compulsory licence in the context of an EU decision activating a
crisis mode. PO3 and PO4 go a step further by embedding compulsory licences in the EU
crisis instruments (i.e. by using them as a trigger to grant a compulsory licence and by
relying on the existing crisis bodies). The last two options would also strengthen EU
bargaining position as 27 countries would run negotiations together and at once. As far as
the information exchange and transparency is concerned, PO1 provides no obligation and
has therefore limited added-value compared to the baseline. All the other options score
better in this respect, although the exchange of information and coordination between
Member States and the Commission may generate some minor administrative costs (yet,
under PO4 such costs are the lowest, as where there would only be one compulsory
licence granted centrally). Finally, PO3 and PO4 also score high in terms of transparency
in decision making concerning export as they both allow the Commission, assisted by an
advisory body, to provide support – through increased coordination – to non-EU
countries.
Table 6: Comparison of policy options against the effectiveness and efficiency criteria
Effectiveness in meeting policy objectives
Efficiency
Improve the key features of
compulsory licensing
Territorial reach of
compulsory licensing
Support EU resilience
PO0 (0) (0) (0) (0)
PO1 (0/+) Limited harmonisation
affecting coherence between
national CLs.
(0) Unfit territorial reach
to tackle cross-border
crises.
(0/+) No full embedding
of compulsory licensing
in EU crisis instruments.
(0/+) Uncertain social and
economic outcomes in the
event of a crisis; regulatory
cost depend on uptake.
PO2 (+) Increased harmonisation
but risk of non-aligned
national CLs. Decision on
crisis and compulsory
licensing belongs to MS.
Limited improvement for
cross-border situations.
(0/+) EU countries can
authorise export to limited
extent, but no exhaustion
(i.e. need of compulsory
licensing to import).
(+) Better embedding of
national compulsory
licensing in EU crisis
instruments and
improved coherence
between national CLs.
(+) Social and economic
benefits for society if crisis
limited or avoided, but may
be undermined by national
divergences in
implementation; can be
obtained at low regulatory
costs.
PO3 (++) Increased clarity and
coherence through
harmonisation and one single
act (basis for national CLs),
but limited harmonisation on
other key aspects.
(++) EU-wide effect of the
compulsory licensing
based on an activation
measure and exhaustion
would result in fewer CLs.
Territorial reach better fit
to tackle cross-border
crises.
(+++) Full alignment
between EU crisis
instruments and
compulsory licensing
(alignment of trigger and
relevant bodies); support
of EU bargaining power.
(++) Social and economic
benefits for society if crisis
limited or avoided; can be
obtained at low regulatory
costs.
PO4 (+++) Clarity and coherence
resulting from one single
procedure and one single CL
at EU level.
(+++) One single CL with
adequate territorial reach
(potentially the whole EU)
and exhaustion would
create an efficient tool to
tackle cross-border crises,
also addresses export.
(+++) Full alignment
between EU crisis
instruments and
compulsory licensing
(alignment of trigger and
relevant bodies); support
of EU bargaining power.
(+++) Social and economic
benefits for society if crisis
limited or avoided – highest
probability due to a
streamlined procedure; can
be obtained at low
regulatory cost.
Note: (0) neutral impact; (+) minor positive impact; (++) positive impact; (+++) significant positive impact; (-) minor
negative impact; (- -) negative impact; (- - -) significant negative impact
As far as the subsidiarity/ proportionality is concerned none of the options go beyond
what is necessary to achieve the identified problems/objectives. Their respective scope is
limited to aspects that Member States cannot achieve satisfactorily on their own and
where the Union action can produce better results (for example, in terms of faster
decision making in times of crisis) or is necessary (for example issuing an EU-level
49
compulsory licence to solve the exhaustion problem). As explained in section 2, Member
States could not solve the problem due to insufficient scale of legal instruments at their
disposal. Options considered provide a mix of Member States and EU level actions with
gradual increase of the EU level intervention. Possible instruments for implementing
policy options are in case of PO1 a set of recommendations; in case of PO2-PO3, a
harmonisation through a directive and in PO4, the introduction of a new layer through an
EU regulation establishing an EU-level compulsory licence. Intervention of the Member
States is guaranteed through the use of existing EU crisis instruments or through the
initiative power given to Member States to start the process leading to EU-level
compulsory licence. The initiative is limited to compulsory licensing to tackle cross-
border crises. Member States retain their full competence as regards compulsory
licensing on other grounds.
7.2 Comparison of impacts of options on stakeholders
Under PO1, the impacts on patent holders would stay broadly the same as in the
baseline: patent holders would still face a fragmented system but could benefit from more
legal certainty as regards compulsory licensing across the Member States that apply the
recommendation. This increased legal certainty would improve even more under the
remaining options (PO2 to PO4) due to less divergences in the compulsory licensing
rules. However, under PO3 and PO4 patent holders may face certain loss of control on
their patent rights since the scope of compulsory licensing would no longer be limited to
a given Member State. In addition, as negotiations would be run at EU level, it could
reduce their negotiation power. This would be mitigated to a limited extent by cost
savings whenever patent owners would participate in one procedure only.
The situation of potential licensees would barely improve under PO1 as their situation in
terms of increased legal certainty will depend on the uptake of the recommendation by
Member States. PO2 would provide them with more coherent rules, which would
positively impact the legal certainty and reduce costs. However, their situation would
significantly improve only under PO3 and PO4. Under PO3 and PO4, they would benefit
from the centralised procedure that would be the source of administrative savings
(although PO3 would maintain negotiations on some aspects at national level). If the
streamlined compulsory licensing procedure results in wider territorial scope of the
licence, this could translate into economies of scale when manufacturing the critical
items.
EU countries could entail some costs under PO1 but only to the extent that they decide
to implement the recommendation. Under PO2 and PO3, costs for Member States would
be higher as they would face one-off costs linked to the implementation of the directive
into their national laws. In both case they would also face recurring costs linked to
transparency obligations in the event of a crisis (hence with a very low frequency). As
granting procedures would remain national under PO2-PO3, this would entail
enforcement costs for Member States. These costs would disappear under PO4, as the
granting of the compulsory licence would be implemented at EU level.
The risk of unavailability of critical products during crises decreases as compulsory
licensing schemes become more effective and efficient. For this reason, EU citizens
would suffer the lowest risk under PO4. Such option would indeed allow a fully coherent
and cross-border compulsory licence, which is not the case under any other option. As
regards the non-EU countries, PO1 and PO2 only provide soft measures, likely to
support to non-EU countries to a limited extent. PO3 brings an added-value as it foresees
50
the possibility for non-EU countries to benefit from the support of the Commission,
assisted by an advisory body, when facing a cross-border manufacturing process. This
benefit would remain under PO4. In addition, PO4 ensures that products being
manufactured across several EU countries could also be the subject of a compulsory
licence for export purposes to non-EU countries. This option appears therefore highly
beneficial to non-EU countries.
Table 7: Comparison of the impacts of policy options on stakeholders (in the event of a crisis)
Affected
IP holders Manufacturers -
future licensees
EU countries The general public
(EU citizens)
Non-EU
countries
Selected firms from
the population of
103.000138
Selected firms from
the population of
2 million139
27 Citizens affected by
the crisis among 447
million (2021)
Countries
covered by
Regulation (EC)
No 816/2006
PO0 (0) (0) (0) (0) (0)
PO1 (0/+) Somewhat lower
costs of compulsory
licensing negotiations,
and increased legal
certainty.
(0/+) Somewhat lower
costs of compulsory
licensing negotiations.
(0) Marginally lower costs of
implementing the CL, but
cost of information exchange
with other EU countries (if
applicable, as no obligation).
(0/+) Marginally
lower risk of delays
or unavailability of
critical products
during crisis.
(0/+) Somewhat
lower costs and
improvement in
legal certainty.
PO2 (+) Somewhat lower
costs of compulsory
licensing negotiations
and some
improvement in legal
certainty, as rules more
coherent across MS.
(+) Somewhat lower
costs of negotiations,
as rules more coherent
across MS.
(0/+) Potentially lower costs
of implementing the
compulsory licensing as and
better exchange of
information between MS, but
cost of information exchange;
cost of reporting to the EC.
(+) Marginally lower
risk of delays or
unavailability of
critical products
during crisis, as
rules more coherent
across MS.
(+) Increased
legal certainty
and limited
administrative
savings for non-
EU countries.
PO3 (+) Lower costs of
negotiations and
improvement in legal
certainty, but marginal
loss of control over
patent rights, if
harmonisation leads to
wider geographical
scope.
(+ +) Lower costs of
negotiations and lower
costs of adapting the
manufacturing
facilities if
harmonisation leads to
wider geographical
scope.
(+) Lower costs of launching
the CL, better exchange of
information between MS,
including compulsory
licensing for export but cost
of participating in
compulsory licensing
negotiations on non-
harmonised aspects, cost
related to the single contact
point and cost of reporting to
the EC
(+ +) Lower risk of
delays or
unavailability of
critical products
during crisis, as
rules more coherent
across MS.
(+ +) Increased
legal certainty
and
administrative
savings due to
better
coordination at
EU level.
PO4 (+) Significant lower
costs of negotiations
and improvement in
legal certainty but loss
of control over patent
rights, if EU-level
compulsory licensing
leads to wider
geographical scope.
(+ +) Lower costs of
negotiations and lower
costs of adapting the
manufacturing
facilities if EU-level
compulsory licensing
leads to wider
geographical scope.
(+ +) Significantly lower
costs of launching the CL,
better exchange of
information between MS, but
cost related to the single
contact point and cost of
reporting to the EC.
(+ + +) Significantly
lower risk of delays
or unavailability of
critical products
during crisis, as
rules coherent across
all MS.
(+ + +)
Increased legal
certainty and
administrative
savings due to
coordination at
EU level.
Note: PO 1 is conditional on the implementation of recommendations by majority of MS.
To complement the outline of impact on stakeholders, see also the SME test (Annex 8).
7.3 Coherence with other EU policies and proportionality
This initiative is fully coherent with other EU initiatives, especially those aiming at
improving the EU’s resilience to crises (HERA, SMEI, etc.). Coherence with EU crisis
138
Based on PatentSight® query of all patents active in EPO (“active in” understood as the authority in
which at least one member of the patent family is active; this includes both pending applications that are
still under prosecution and granted patents that are still in force) that resulted in 103 052 unique owners.
The analysis was based on 525 329 patent families active at 12/08/2022. The number could be higher as the
proposed initiative could concern any patent and not only the EP.
139
More than 2 million enterprises were classified as manufacturing in the EU in 2019 (i.e. NACE section
C), source: Eurostat dataset sbs_sc_sca_r2, last updated on 27/10/2022.
51
instrument is above all ensured by making such instrument the trigger of an EU-level
compulsory licence. In addition, this initiative provides that consultation of Member
States and stakeholders must be carried out within the relevant (advisory) bodies, as
provided for by the relevant EU crisis instrument.
As far as the proportionality is concerned, under PO1 Member States retain freedom to
introduce or not the recommendation. Under PO2, harmonisation would be proportionate
and limited to provisions essential to tackle a crisis. Member States would retain
competence for compulsory licensing other than crisis management. The same would
apply to PO3. Under PO4, Member States’ empowerment would be limited, but only in
exceptional circumstances. The EU-level compulsory licensing rules would be
proportionate and limited to provisions essential to tackle a cross-border crisis, while
Member States will be consulted in the relevant (advisory) bodies throughout the process.
8 PREFERRED OPTION
All the options considered in the impact assessment are expected to improve on the status
quo, but to a varying extent. However, when considering the specific objectives, it
appears that Option 4 would be the most effective and efficient to achieve the objectives
of this initiative. The preferred option would create a single procedure to grant an EU-
level compulsory licence with adequate features to tackle a crisis. The Commission
activation measure would ensure that conditions are the same across the EU and would
avoid national discrepancies likely to slow down or prevent a compulsory licensing from
tackling cross-border crises. This single compulsory licence would be applicable in all
relevant territories, therefore covering any cross-border situation (i.e. would also cover
smaller-scale crises, not affecting the whole EU). This would be the case for both the EU
market and for export purposes to non-EU countries. Coherence with EU crisis
instruments would be ensured by the possibility to refer to a common trigger, as well as
to the (advisory) bodies set-up by the EU crisis instruments. Alternatively, the procedure
could be initiated by Member States affected by a crisis. Negotiations and coordination
would be carried out at EU-level to ensure coherent approach across the EU. To prevent
and stop any misuse of the compulsory licence140
, safeguards should be in place to allow
the Commission to take appropriate measures including, if need be, the reduction of the
remuneration and the termination of the compulsory licence to ensure that the conditions
of the compulsory licence are respected. The measures taken by the Commission should
be effective, proportionate and dissuasive. The implementation of the preferred option
would require adopting a new regulation establishing an EU-level compulsory licence for
crisis management. PO4 is the most balanced and proportionate approach, which also
takes account of the views and concerns of stakeholders. The preferred option would
address the identified problem (i.e. “EU compulsory licensing rules not well suited to
address cross-border crisis in a timely manner, due to uncoordinated procedures and
decision-making, as well as inadequate territorial reach”).
140
As explained earlier in this impact assessment, safeguards will be established along the whole CL
“lifecycle”, notably: i) pre-granting: an EU level CL could only be triggered in specific conditions, with a
high threshold (i.e. activation of an EU emergency/ crisis mode, request by more than one Member State in
the case of a crisis in the EU with a cross-border dimension); ii) granting: when considering the need to
issue a CL and the conditions thereof, the Commission will be assisted by an advisory body, involving
Member States and relevant stakeholders; iii) post-granting: the CL granting decision (including the
conditions) will be subject to appeal before a judicial court.
52
Table 8: How the preferred option achieves the policy objectives?
Objective Preferred option: PO 4 (EU-level CL)
SO1: Improve the key features of
compulsory licensing, such as the
trigger, scope and conditions of
compulsory licensing, as well as
improve the coherence of compulsory
licensing in the EU to improve its
effectiveness and efficiency in a crisis
PO4 would ensure that optimal features are in place to
guarantee a swift granting procedure in the event of a
cross-border crisis or a crisis affecting the Single Market.
As it would create a single procedure at EU-level, the
current fragmentation slowing down or preventing the use
of compulsory licensing in crises would therefore be
removed.
SO2: Ensure that the territorial reach of
a compulsory licence, incl. for export
purposes, can accommodate the reality
of cross-border value chains operating in
the Single Market
PO4 would establish a compulsory licensing scheme in the
EU able to tackle cross-border crisis (including covering
cross-border supply chains, also for export purposes to
non-EU countries).
SO3: Support EU resilience by
improving the coordination, streamlining
the decision making and allowing
compulsory licences to better
complement EU action in crises,
including for export purposes to non-EU
countries
PO4 would provide the EU with a compulsory licensing
tool that could be used in support of EU crisis instruments
(as incentive to voluntary agreement or as a last resort
measure to replace / complement them). Coherence with
other EU crisis instruments would be ensured by referring
to such instruments in order to the trigger an EU-level
compulsory licensing (the exact choice of instrument will
depend on the type of crisis). PO4 would also support
non-EU countries needing to rely on compulsory licensing
in the EU.
The impacts of the preferred option on stakeholders were discussed in section 6.4.4. They
can be summarized as follows: the preferred option (PO4) is more effective as it (i)
removes fragmentation and provides more clarity and coherence on the features of
compulsory licensing for crisis management; (ii) provides an adequate territorial reach
able to cover cross-border crises and supply chains; (iii) provides alignment with EU-
crisis instruments. The impact on EU countries would be positive as it would increase
their ability to tackle cross-border crises in a coherent and efficient way. Member States
would benefit from a reduction of enforcement cost as negotiation would be centralised
at EU level. EU citizens would also benefit from this initiative as it improves the ability
of the EU to take full advantage of the Single Market and to provide access to critical
goods in crises. For patent owners, this initiative would indeed remove compulsory
licensing fragmentation in the EU and costs associated with the participation in multiple
national procedures. However, in the event of a broader geographical scope of a CL,
wider loss of control over patent rights. This impact is however limited as compulsory
licensing is an exceptional measure. In addition, patent owners would still benefit from a
remuneration and the limitation of their right would be for a definite period. In addition,
this solution would generally only apply once voluntary agreements were not available.
Potential licensees would benefit from administrative savings due to the centralised
procedure and economies of scale if its results in wider territorial scope of the CL. Non-
EU countries would also benefit from this initiative as it should facilitate access to a
compulsory licence covering a cross-border supply chain.
Finally, the EU-level compulsory licensing rules would be proportionate and limited to
provisions essential to tackle a cross-border crisis. The EU level compulsory licensing
decision would limit Member States empowerment only in exceptional circumstances.
Member States retain competence for compulsory licensing other than cross-border crisis
management and will be consulted in the relevant (advisory) bodies throughout the
process.
53
8.1 REFIT and the application of the ‘one in, one out’ approach
This preferred PO4 foresees the establishment of a new legal instrument where an EU-
level compulsory licensing could be granted in a cross-border crisis using a single
procedure instead of several national procedures.
Table 9: REFIT – cost savings related to the preferred option (PO4)
Description Amount Comments
Savings for patent
holders and
manufacturers
(potential licensees).
75%-80% less
resources than in the
baseline, in the event
of a cross-border crisis
The compulsory licensing negotiations would take place
only once at the EU-level instead of fragmented and
overlapping processes in several EU countries (or
instead of ca. 4-5 procedures in each jurisdiction that
could be needed otherwise).
Savings for MS
administrations.
Impossible to estimate
precisely
Cost of running compulsory licensing negotiations are
expected to decrease, as resources would be shared at
EU-level.
In the event of an unforeseen future crisis, PO4 would lower the costs of participation in
compulsory licensing negotiations incurred by patent holders, manufacturers and
Member States (notwithstanding the identification of some minor administrative costs of
reporting, which may be incurred by Member States and thus do not fall under the ‘one-
in one-out’ approach). As far as the firms are concerned, such costs could be lower by
roughly 75% to 80% when compared to the status quo scenario (i.e. based on a
hypothetical situation where a single compulsory licensing procedure would replace 4-5
procedures in each jurisdiction). For Member States, if national compulsory licensing
negotiations were to be replaced by the EU-level negotiations, the compliance and
enforcement cost might stay unchanged or actually drop as the same effort would be
shared among several countries. The exact monetary value of cost savings for
stakeholders is not possible to provide due to scarcity of such events and also because the
type of future potential crisis and its scale is unknown. Additionally, as the new
instrument should be used only during major crisis affecting the EU and as the last resort
measure, hence its expected frequency is also very low.
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
The legislation to be proposed would include a provision requiring an evaluation report
five years after the granting of the first EU-level compulsory licence. The preferred
option obliges Member States to inform the Commission when they are considering
granting and when they have granted a compulsory licence for crisis management, as
well as providing information on the compulsory licence (i.e. transparency obligation on
the subject matter of the compulsory licence, the manufacturer, the conditions, etc.). As
discussed in section 1.3., the recourse to compulsory licensing is expected to be rare as it
will be triggered by exceptional circumstances. As a consequence, the overall number of
compulsory licences issued on the basis of the proposed instrument is expected to be
low141
, which subsequently means that monitoring of the basic descriptive indicators
would not require setting up of additional systems for data collection and monitoring (the
collection and processing of information can be done manually).
141
As illustrated in Table 25 (Annex 6) less than a dozen compulsory licences has been granted in the EU
over the last decade, including non-crisis and plant variety compulsory licences.
54
Table 10: Monitoring indicators
Indicators Sources of information
Objective 1. Improve the key features of compulsory
licensing:
Perceptions about the new compulsory licensing
system when compared with the status quo,
especially with regards to its efficiency (e.g. duration
as compared to the baseline), clarity.
Online survey using similar questions as the OPC
(to be carried out 3 years after entry into force);
EU countries reporting; Information collected in
the context of the work of crisis advisory bodies.
Objective 2. Territorial reach of compulsory
licensing:
Number of compulsory licensing cases where there is
a cross-border element;
Number of EU countries covered by compulsory
licensing granted under the new system.
ECJ, WTO and EU national case law;
EU countries reporting; Information collected in
the context of the work of crisis advisory bodies
Objective 3. Support EU resilience:
Use or absence of use of compulsory licensing in the
context of EU crisis instruments;
Reporting on EU crisis instruments; EU countries
reporting; Information collected in the context of
the work of crisis advisory bodies
55
ANNEX 1: PROCEDURAL INFORMATION
1. LEAD DG, DECIDE PLANNING/CWP REFERENCES
Lead DG:
 DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW).
Other Services involved:
 SG, SJ, COMP, ENER, SANTE, HERA, TRADE, RTD, INTPA, JRC
Agenda Planning Reference:
 Ref. PLAN/2021/11425
 The initiative is included in the Intellectual Property (IP) Action Plan that the
Commission adopted on 25 November 2020 and in the Commission work
programme 2023.
2. ORGANISATION AND TIMING
The Call for Evidence was published on 1 April 2022. It was followed by a feedback
period that lasted until 29 April 2022. 57 stakeholders submitted feedback. The
Commission held a public consultation from 7 July 2022 to 29 September 2022. This
consultation was available on the Better Regulation Portal of the Commission and open
to anyone who wished to reply. The public consultation received 74 replies through the
EU survey.
The work on the Impact Assessment was carried out from April 2022 to January 2023,
during which an Interservice Steering Group (ISSG) met three times to give an update on
the ongoing work and discuss preliminary versions of the Impact assessment report,
together with all the supporting documents.
The following Commission services participated: SG, SJ, COMP, ENER, SANTE,
HERA, TRADE, RTD, INTPA and JRC.
The deadline for adoption of a proposal by the Commission is April 2023.
3. CONSULTATION OF THE RSB
The Regulatory Scrutiny Board (RSB) was consulted in an upfront meeting on 15 July
2022. The present impact assessment report was submitted to the RSB on 06.01.2023.
The Impact Assessment was discussed with the RSB on 01.02.2023. On 03.02.2023 the
RSB delivered a positive opinion. The table below shows RSB comments and how they
were addressed in the revised text.
Table 11: RSB comments to the initial version of the impact assessment
RSB comments DG GROW replies
(1) The problem definition is not sufficiently clear on the
remaining scale of the problem.
Additional clarifications have been introduced in sections
2.3 and 2.4, in particular concerning the likelihood that
the envisaged EU compulsory licensing rules will be
needed and the gap EU compulsory licensing rules would
cover in the event of a cross-border crisis.
(2) The report does not sufficiently describe the content
and functioning of the EU level options, including the
Additional clarifications have been introduced in section
8 concerning safeguards to prevent any misuse of the
56
intended safeguards. The expected efficiency gains and
overall effectiveness are not sufficiently demonstrated.
proposed compulsory licence scheme. The efficiency and
timeliness of EU-level compulsory licence would be
ensured by adequate governance design, which is now
discussed at more length in section 5.2.4.
(3) The report does not comprehensively analyse the
impact on competitiveness and innovation, including
investments in innovative products in case of crisis.
Section 6.5.3 has been expanded by referring to a broader
policy trade-off between keeping the incentives for
innovation through IP protection while ensuring access to
critical products in cross-border crisis situations.
4. EVIDENCE, SOURCES AND QUALITY
Analysis presented in this impact assessment is based on the following key sources:
 Feedback to the Call for Evidence on Compulsory Licensing in the EU that the
Commission published on 1 April 2022 (https://ec.europa.eu/info/law/better-
regulation/have-your-say/initiatives/13357-Intellectual-property-revised-framework-
for-compulsory-licensing-of-patents_en ).
 Replies to the Open Public Consultation on Compulsory Licensing in the EU that
was open until 29 September 2022 (https://single-market-
economy.ec.europa.eu/news/commission-seeks-views-and-input-compulsory-
licensing-patents-2022-07-07_en ), referred to as ‘OPC’.
 “Compulsory licensing of intellectual property rights”, Center for International
Intellectual Property Studies (CEIPI), Université de Strasbourg (UNISTRA), Impact
Licensing Initiative (ILI), Ecorys Nederland BV (Ecorys), Brussels 2023 ([link
available once published]), referred to as ‘CEIPI(2023)’.
 “Compulsory licensing in Europe, A country-by-country overview”, European
Patent Office, 2018 (https://www.epo.org/learning/materials/compulsory-licensing-
in-europe.html ), referred to as ‘EPO(2018)’.
Additionally, the following data sources were used in order to perform an in-house
analysis:
 PatentSight® database (https://go.patentsight.com/login.html).
The remaining sources are provided in the footnotes, whenever they are referred to in the
text.
57
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT)
Introduction
As underlined in the Commission’s intellectual property action plan (2020), the
Commission sees a need to ensure that effective systems for issuing compulsory licences
are in place. Against that background the Commission started in 2022 consulting
stakeholders on compulsory licensing of patents in the EU, especially in a cross-border
crisis. Consultation of stakeholders also covered the efficiency of the EU procedure on
compulsory licensing of patents for pharmaceutical products for export to countries with
public health problems (Regulation (EC) No 816/2006).
Consultation activities
The European Commission published a Call for evidence142
on 1 April 2022. The
feedback period to this call for evidence lasted 4 weeks and ended on 29 April 2022. The
objective of this call for evidence was to gather views, opinions and evidence from all
public and private sector stakeholders, such as IP right holders, users of IP-protected
technologies and products, the health sector (including generic manufacturers, start-ups
and patient associations), public authorities, national IP offices, non-profit organisations,
civil society representatives, consumer associations, research centres, the European
Medicines Agency and IP lawyers. It gathered views on the different grounds and
procedures for issuing compulsory licences in a crisis and aimed to discover bottlenecks
and to assess the impact of compulsory licensing on stakeholders. In total, 57 feedbacks
were received, of which one third came from business associations and 23% from non-
governmental organisations (NGOs). Most of the feedback was received from
respondents from BE (21%), DE (19%) and FR (11%).
In March 2022, the Commission launched the study ‘Compulsory licensing of intellectual
property rights’ [CEIPI(2023)]. The objective of the study was to assist the Commission
in defining potential problems as regards compulsory licensing in the EU as well as
identifying and assessing policy options to improve coherence and effectiveness in the
field. To this end, the study aimed at collecting data through desk research, case studies,
interviews with stakeholders as well as organising two workshops. The study was
conducted by the Center for International Intellectual Property Studies (CEIPI), the
Université de Strasbourg (UNISTRA), the Impact Licensing Initiative (ILI) and Ecorys
Nederland BV (ECORYS).
In the context of the Study, Member States experts were contacted to complete a
questionnaire. The questions focused on the national experiences with compulsory
licensing, the scope of application of compulsory licences and procedural aspects. In
addition, a series of 25 semi-structured interviews of national experts, academia, policy
representatives and industry experts were conducted. These interviews focused on
gathering ‘non-published’ data on national procedures and legal requirements of
compulsory licensing.
Two workshops were held:
142
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13357-Intellectual-property-
revised-framework-for-compulsory-licensing-of-patents_en
58
 A first workshop on ‘Information collection on specific compulsory licence cases
with exchange of views and experiences in the field of IPRs’ was held in Brussels
on 28/29 April 2022;
 A second workshop on ‘Policy options for compulsory licensing in Europe in case
of a crisis’ was held in Brussels on 9/10 June 2022.
A total of 24 participants attended both workshops, representing patent attorneys from
multiple Member States, policy officials and representatives from different industries.
The European Commission also held an Open Public Consultation from 7 July 2022 to
29 September 2022. This public consultation aimed to collect views from all stakeholders
on how to build the most efficient compulsory licensing scheme in the European Union
as well as to ensure that it is fit to tackle EU-wide and global crises. This consultation
was available on the Better Regulation Portal of the Commission and open to everybody.
The public consultation received 74 replies. More than half of the answers came from
business associations (30%) and company/business organisation (24%), mostly from the
health sector (34%). The largest number of replies were from Germany (15), Belgium
(11) and FRFR (10). See for more statistics about the respondents and the key findings,
the Factual Summary Report, published on the Better Regulation Portal of the
Commission.
Table 12: Number of replies received in the open public consultation by stakeholder type
I am giving my contribution as Freq. Percent
Academic/research institution 5 6.76
Business association 22 29.73
Company/business organisation 18 24.32
Consumer organisation 1 1.35
EU citizen 12 16.22
Non-governmental organisation (NGO) 6 8.11
Other 6 8.11
Public authority 4 5.41
Total 74 100
Source: OPC
Analysis of responses
Compulsory licensing as a crisis instrument
In the context of the consultation activities, stakeholders were asked about the relevance
of compulsory licence as a crisis management instrument. In that respect, a large
majority of all groups of respondents143
(82%, N= 61) consider it important for public
authorities to allow production of certain products and/or use of certain technologies
necessary to tackle a crisis through a compulsory licence. This is also true for
respondents likely to be subject to a compulsory licensing decision (N=12), with 75% of
them agreeing with the importance for public authorities to rely on compulsory licensing
for crisis management purposes. In particular, in view of recent crises, such as the Covid-
19 pandemic and the war in Ukraine, respondents consider compulsory licensing as a
crisis management tool generally as positive (43%, N=20), even though it has been also
143
By respondents we refer here to the respondents to the public consultation.
59
pointed out that existing mechanisms of compulsory licensing under the TRIPS
Agreement and national IP laws revealed not to be sufficient to solve the problem of
urgent access to life-saving medical tools during critical situations such as an ongoing
war, a pandemic or situations of severe medicines shortage and instead rather voluntary
licensing agreements played a pivotal role, increasing production and supply for the
needed medicines.
When asked about the fitness of current rules on compulsory licensing for crisis
management, stakeholders’ views are contrasted. Many respondents consider that
current national laws on compulsory licensing are fit to tackle national crises (58%,
N=43), EU-wide crises (51%, N=38), and global crises (50%, N=37). However, stark
disparities exist between stakeholders. All NGOs considered that current compulsory
licensing rules are unfit to tackle EU-wide crises. In contrast, all business associations
and companies considered that compulsory licensing rules are fit to tackle EU-wide
crises. Generally, compulsory licensing rules are considered less fit to tackle EU-wide
crises than national and global ones144
.
When asked about the types of crises for which compulsory licensing should be
possible, almost half of the respondents (45%, N=33) considered that compulsory
licensing should be allowed only for specific crises. Interestingly, three quarters of the
respondents likely to be subject to a compulsory licensing decision were of the same
opinion. Another quarter considered that compulsory licensing should be allowed
whenever a situation is determined to be a crisis by relevant authorities. Only few
respondents considered that compulsory licensing should never be used (55%, N=4).
When asked about the types of specific crisis, respondents first mentioned health-related
crises (34%, N=25), then war and/ or large-scale attack (28%, N=21), and finally energy-
related crises and natural disasters (each 26%, N=19).
On priority aspects of compulsory licensing for crisis management, a large majority
of stakeholders (74%, N=55) consider the speed of ensuring access to products/
technologies as a high priority. However, only a third of stakeholders (34%, N=25)
considered that putting a time limit on negotiations could speed up the granting of a
compulsory licence for crisis management. Views diverged on the need to provide a clear
time limit, some considering that a defined time period (e.g. 1 month) would be
necessary to avoid lengthy negotiations, others considering that this would not provide a
flexible solution. In contrast, pre-defined rules on essential terms of the licence are
quoted as an efficient way to speed-up the granting of a compulsory licence. Pre-defined
rules on remuneration appear particularly important with 42% of respondents (N=31)
considering that it would speed up the granting of a compulsory licence. This is in line
with the finding that protection of right holders (including an adequate remuneration)
was considered a high priority for 64% of respondents (N=47) to the public consultation.
A final aspect concerned the importance of voluntary agreements on intellectual
property rights, including in crises. Stakeholders generally highlight the importance of
voluntary agreements to scale-up the manufacturing of critical products. This view was
often reflected in the feedback to the call for evidence as well as in the replies to the
public consultation. According to many stakeholders, the COVID-19 pandemic has
showed that voluntary agreements offer a viable solution for the manufacturing of critical
144
This is also true for companies and business associations that consider that rules on compulsory
licensing are able to tackle national crises (94%), EU-wide crises (89%) and global crises (92%).
60
goods in crises. Along these lines, three quarters of the respondents to the public
consultation (74%, N=55) agreed that compulsory licensing is a last-resort mechanism
that should be available only where voluntary arrangements have failed or are
unavailable.
However, views are contrasted on this issue: although almost all companies and business
association (97%) agree with the last resort approach, two-thirds of NGOs disagree. In
addition, several respondents to the public consultation highlighted that Article 31(b) of
the TRIPS Agreement does not require seeking the authorisation of the patent owner (i.e.
a voluntary agreement) in cases of a national emergency or other circumstances of
extreme urgency or in cases of public non-commercial use.
As regards aspects to determine whether voluntary agreements have failed, the majority
of respondents favour whether reasonable efforts have been made by the licence seeker to
obtain an agreement with the IP owner and the time period allowed for concluding a
voluntary agreement over the types of voluntary agreements that have proven to be
unsuccessful or unavailable, such as agreements with suppliers or agreements between
competitors.
Almost half of the respondents mentioned other aspects to be considered. These aspects
included the scope of the licence (whether it is strictly limited to what is necessary), the
protection of trade secrets and commercial interests of the IP owner and the guarantees
given by the licensee.
As regards the impact of compulsory licensing on the various players, opinions are
divided between stakeholders. While companies and business associations point to the
negative impact of compulsory licensing to IP rights holders, lowering the value of their
investments in IP rights, impairing the IP system and harming society in the long run,
NGOs are emphasizing the positive impact on citizens and the entire society by ensuring
affordable and sustainable access to essential health products, when needed, at reasonable
prices, in adequate quantity and good quality, while guaranteeing a balance with the
innovation and IPR system.
61
Policy options as regards compulsory licensing for the domestic market – Article 31 of
the TRIPS Agreement
Different consultation activities145
have examined experiences of stakeholders and
national experts with compulsory licensing at Member State level, in particular regarding
possible policy options to ensure an effective compulsory licensing system for crisis
management.
When presented with three main policy options to speed-up the compulsory licensing
process for crisis management, stakeholders favoured the option consisting of
facilitating communication on the request/ granting of compulsory licences and the
sharing of information between EU countries (42%, N=31). The second preferred option
referred to the possibility of aligning rules on compulsory licences (28%, N=21). The
least preferred option concerned the adoption of non-binding guidelines (22%, N=16).
Three out of four of the public authorities having replied to the public consultation are in
favour of an alignment of rules. This is in stark contrast with NGOs and consumer
organisations, of which only one NGO would welcome an alignment of rules. This
reluctance towards an alignment of rules could be explained by the willingness to
preserve the ability of Member States to trigger compulsory licences at national level, as
this appears from discussions with stakeholders.
The public consultation further investigated the option, and in particular the relevant
features of uniform rules on compulsory licences for crisis management. In general,
respondents to the public consultation consider that the three main features to be aligned
should be the grounds on which a compulsory licence can be granted (43%,N=32), the
scope (42%, N=31) and the procedure (32%, N=24). Divergences exist between the
different categories of stakeholders. Companies and business associations are less likely
to consider that alignment is needed on the different features. They are only a bit more
than a fifth to consider necessary to align the grounds and the scope and only 17% in
favour of aligning the procedure. In contrast, more NGOs, public authorities, and
academia are in favour of aligning the scope (73%), the grounds (67%) and the procedure
(53%).
The public consultation further examined the different features of a compulsory licence
for crisis management purposes, which can be summarised as follows:
Grounds for granting a compulsory licence – Around one third of the respondents to
the public consultation consider that the following grounds for granting a compulsory
licence should be aligned: the territorial scope of crises (the possibility to declare a
national, multinational or pan-European-crisis), the types of crises for granting a
compulsory licence (e.g. health) as well as the definition of crises that allow a
compulsory licence to be granted should be the same. Divergences exist between the
different categories of stakeholders, with companies and business associations being less
in favour of an alignment of the grounds for granting a compulsory licence than
academia, public authorities and NGOs having replied to the public consultation.
Scope of the compulsory licence – More than a third (35%, N=26) of the respondents to
the public consultation consider it necessary that the alignment of the scope of what a
145
Including in particular the interviews and workshops organised within the framework of the
CEIPI(2023) study and the OPC.
62
compulsory licence covers should extent to all aspects deemed necessary to allow the
manufacturing of complex products.
In particular, the Public Consultation reveals that 65% of the respondents (N=48) are of
the opinion that compulsory licences should also apply to supplementary protection
certificates. In this sense, responses of national experts to the questionnaire sent in the
context of the Study, show that the lack of explicit reference to supplementary protection
certificates in national compulsory licensing provisions gives rise to legal uncertainty
and different interpretation of similarly worded provisions146
. Half of the respondents of
the Public Consultation, i.e. 50% (N=37), favour compulsory licences that apply to
patents as well as published patent applications.
36% of respondents (N=27) welcome if compulsory licences also included the know-
how. Views are extremely contrasted on this point with only 5% of companies and
business associations being in favour (in contrast, considering academia and NGOs and
public authorities, all but one are in favour of including know-how in the scope of a
compulsory licence).
Moreover, stakeholders having participated in the context of the study generally agree
that regulatory data protections for medicinal products should not be an obstacle to the
effective implementation of a compulsory licence.147
In contrast, only 35% of
respondents (N=27) (and only 12% of the companies and business associations) consider
it useful when compulsory licences also apply to regulatory data protections for
medicinal products. Finally, a third of the respondents are of the opinion that a
compulsory licence should also apply to other IP rights but did not elaborate much
further on the types of other IP rights.
Conditions for granting a compulsory licence – Consultation activities have identified
that alignment of the conditions for granting a compulsory licence should encompass the
duration of the licence (38%, N=28), the content of an application for a compulsory
licence (e.g. indicate the patent, the owner of the patent, the concerned products, etc.)
(35%, N=26), remuneration (34%, N=25) and the framework and duration of the
negotiations (31%, N=23). During the consultation activities, stakeholders explained that
patent holders which are subjected to a compulsory licence run risks that may not
adequately be dealt with by the enforcement of patent and compulsory licence-relevant
laws alone.148
Insofar safeguards are needed in the form of complementary contractual
control mechanisms which can help to reduce the negative consequences of the
compulsory licence. In this sense, protection for rights holders, such as a reasonable
period of time to allow negotiations between the licence seeker and the rights holder, a
clear limitation of the duration of the compulsory licence and an adequate remuneration
for rights holders is considered of high priority by the majority of respondents of the
Public Consultation (69%).
Procedure for granting a compulsory licence – As regards the procedure for granting a
compulsory licence, 43% of the respondents to the public consultation (N=32) would
welcome an alignment of the type of procedure (administrative or judicial procedure).
When it comes to NGOs and academia, 8 out of the 11 respondents are in favour of such
alignment. Only 27% of the respondents to the public consultation (N=20) would like to
146
CEIPI(2023), p. 38.
147
CEIPI(2023), p. 47.
148
CEIPI(2023), p. 85.
63
see an alignment on whether or not the manufacturing should be subject to a final
decision on all aspects of the compulsory licence.
Procedures on compulsory licences for crisis management should, according to
stakeholders, rather be initiated by a competent authority (28%, N=21) than on request of
the licence seeker (4%, N=3), or alternatively, providing both possibilities (23%, N=17).
As regards an alignment of the recourse procedure for granting a compulsory licence, a
majority of respondents to the public consultation would agree with an alignment of the
time limit within which the application of an appeal is admissible (42%, N=31) and an
accelerated appeal procedure (38%, N=28). 35% of the respondents (N=26) are in favour
of the suspensive effect of an appeal.
Competence to administer compulsory licences – Even though at national level, as
demonstrated in the questionnaires sent to national experts and as confirmed by
stakeholders across all categories, various types of authorities are empowered to issue a
compulsory licence for different purposes149
, a strong preference was expressed by
stakeholders during interviews and workshops for allocating responsibilities for
administering compulsory licences to ‘specialised’ or expert authorities: authorities
which hold the requisite knowledge of a product and relevant expertise in order to
properly evaluate applications for compulsory licences and make key assessments
regarding the necessary scope of a compulsory licence.150
As to the role of the European institutions, the Public Consultation revealed that a slight
majority of respondents favour a consultative role on the request of EU countries, public
authorities, rights holders, licence seekers, etc., asking for advice (39%, N=29) or a
coordinating role (e.g. by setting up channels/forums and methods for information
sharing among EU countries and steering mutual assistance between EU countries) (36%,
N=27) over a decision-making role of European institutions (e.g. by declaring a crisis,
possibly triggering the granting of a compulsory licence (28%, N=21).
Compulsory licensing for exports
Regulation (EC) No 816/2006 regulating compulsory licensing of patents for
pharmaceutical products for export purposes had never been used. It was therefore
important to collect views from stakeholders on how they consider this regulation, and in
particular the fact that it was never used.
41% of the respondents to the public consultation (N=30) considered that Regulation
(EC) No 816/2006 allows for speedy and efficient procedures for granting compulsory
licences to export pharmaceutical products to non-EU countries.
149
CEIPI(2023), p. 29.
150
CEIPI(2023), p. 73.
64
Views are however extremely contrasted on this issue: among companies and business
associations, 95% agree with this view. In contrast, all NGOs having participated in the
public consultation consider that this is not the case.
On aspects of the Regulation that could be streamlined, we witness a lot of respondents
having no opinion (around a third) or having not replied (around 15%). Replies appear
again contrasted between companies and business associations, on the one hand, and
NGOs, on the other hand. In the first group, only one respondent considered that
elements of the regulation should be streamlined (i.e. conditions to submit an application,
calculation of the remuneration and the simplified and accelerated procedure). In
contrast, all but one NGOs considered that conditions to submit an application and the
calculation of the remuneration should be streamlined. All NGOs considered that the
simplified and accelerated procedure should be streamlined.
Stakeholders generally disagree that the procedure set by Regulation (EC) No 816/2006
should be made more flexible to adapt to the needs of the importing country (25
respondents disagreed, 17 agreed and 32 did not reply or had no opinion). On whether the
Regulation provides for sufficient guarantee against trade diversion, the majority of
respondents (38%, N=28) agreed, while a minority of 6 respondents (8%) disagreed (the
largest majority – 40 respondents – did no reply or had no opinion on the issue).
Impacts of the different options
Several questions on the impact of possible options were part of the public consultation.
These impacts are summarised below, with a particular focus on the impacts on EU
businesses, IP owner, the ability of the EU to tackle crisis and the access to critical goods
in crises.
The majority of the respondents of the Public Consultation are seeing the introduction
of a uniform compulsory licensing scheme for crisis management rather negative for
EU businesses (38%, N=28) and EU IP owners (43%, N=32). However, it is generally
perceived more positive as regards the EU’s ability to tackle crises (38%, N=28) and the
provision of access to critical goods (36%, N=27).
65
Stakeholders favour the option of allowing a compulsory licence to be granted at EU
level in the event of an EU-wide crisis compared to nationally granted compulsory
licences for EU-wide crises. In that respect, the responses to the Public Consultation
show that the option of granting a compulsory licence at EU level is generally deemed
more positive by stakeholders as regards the EU’s ability to tackle crises (35%, N=26)
and for providing access to critical goods (34%, N=25) than the granting of a compulsory
licence at national level (respectively, 11%, N=8 and 12%, N=9). There is again a stark
contrast between stakeholders. All NGOs consider that the granting of a compulsory
licence at EU level for EU-wide crises would have a positive effect on the ability to
tackle crises and the access to critical goods. However, a majority (around 50%) of
companies and business associations consider that the impact would be negative. A larger
majority of companies and business associations considers that such option would have a
negative effect on EU businesses (87%) and IP owners (90%).
66
As regards the impact of introducing a mechanism for coordinating compulsory
licensing among EU countries, it is seen positive for the EU Single Market by 35% of
the respondents (N=26). For the impact on EU businesses (28%, N=21), EU IP owners
(25%, N=26) and the EU patent system (35%, N=26), negative responses predominate,
especially by companies, business organisations and business associations, whereas,
again, respondents are more positive about the impact on the EU’s ability to tackle crises
(35%, N=26) and the impact on the access to critical goods for the public (28%, N=21).
This is the case, above all, for NGOs. Moreover, the impact of introducing a mechanism
for coordinating compulsory licensing among EU countries on the public authorities’
decision-making processes is viewed positively by the majority of the respondents (29%,
N=22).
67
The questions on the impact of creating an EU single contact point and coordination
mechanism between Member States and of an EU-level centralised procedure to grant
compulsory licences on export of pharmaceutical products to non-EU countries received
only few evaluable answers. Most of the respondents either had no opinion, answered in
a neutral way, or did not submit any answer. However, of the responses on the impact of
creating an EU single contact point and coordination mechanism between Member
States for compulsory licences for export of pharmaceutical products to non-EU
countries, positive answers on the impact on the EU Single Market predominate (19%,
N=14 vs negative answers: 3%, N=4), even by companies, business organisations and
business associations. As to the impact on EU businesses and EU IP owners, companies,
business organisations and business associations see it rather negative (53%, N=21 and
55%, N=22), whereas NGOs have a rather positive view. The majority of the respondents
also saw the creation of an EU single contact point and coordination mechanism between
Member States for compulsory licences for export of pharmaceutical products to non-EU
countries more positively as regards the impact on the EU patent system (18%, N=13),
the EU’s ability to tackle crises (18%, N=13), access to critical pharmaceutical products
for non-EU countries (19%, N=15) and on the public authorities’ decision-making
process (19%, N=15).
Of the answers received on the impact of an EU-level centralised procedure to grant
compulsory licensing on export of pharmaceutical products to non-EU countries,
negative answers predominate on the questions about the impact on EU businesses and
EU IP owners, mostly stemming from companies, business organisations and business
associations, whereas more positive answers were received on the impact on the EU
patent system, on EU’s ability to tackle crises, access to critical pharmaceutical products
for non-EU countries and on the public authorities’ decision-making process.
How the results of consultation activities were used?
The results of the various consultations presented above underpin the whole evaluation of
the currently fragmented framework of national compulsory licensing systems of patents
for domestic purposes as well as of the efficiency of the EU procedure on compulsory
licensing of patents for export to countries with public health problems (Regulation (EC)
No 816/2006). They were used to judge the effectiveness and efficiency of compulsory
licensing in the EU to tackle cross-border crises and helped in formulating policy options
for the future.
68
ANNEX 3: WHO IS AFFECTED AND HOW?
1. PRACTICAL IMPLICATIONS OF THE INITIATIVE
The new instrument is intended to make the issuing of CLs in crisis situations more
coherent and streamlined, especially in terms of timing. This would reduce the
multiplicity of authorities involved in such procedures and therefore increase legal
certainty that is crucial for patent holders/companies that may be concerned by a CL. The
proposed changes will also improve the transparency of the process, which is especially
important for stakeholders. The key stakeholders that may be affected by the new
provisions are the current patent holders, followed by any company that may take the role
of a future manufacturer (licensee). As far as patent holders are concerned, the majority
of such companies are large enterprises - a breakdown of patent applications originating
from European countries shows that 75% of them were filed by large companies, 20% by
individual inventors and SMEs, and 5% by universities and public research
organisations.
Figure 11: Patent applications originating from European countries by applicant type [%]
Source: Patent Index 2021 – At a glance, EPO, status: 1.2.2022
2. SUMMARY OF COSTS AND BENEFITS
I. Overview of Benefits (total for all provisions) – Preferred Option
Description Amount Comments
Direct benefits
Savings for patent
holders and
manufacturers
(potential licensees)
75%-80% less
resources than in the
baseline, in the event
of a cross border
crisis.
The compulsory licensing negotiations would take place
only once at the EU-level instead of fragmented and
overlapping processes in several EU countries (or instead
of ca. 4-5 procedures in each jurisdiction that could be
needed otherwise).
Main recipients: firms involved in compulsory licensing
granting process.
69
Savings for MS
administrations.
Impossible to estimate
precisely
The cost of running compulsory licensing negotiations are
expected to decrease151
, as resources would be shared at
EU-level
Main recipients: MS administrations
Access to critical
goods in times of
crisis.
Impossible to estimate
precisely
Availability of products that otherwise would not be
accessible, which also prevent other costs from occurring.
Main recipients: EU citizens or firms in need of the
critical goods.
Indirect benefits
Better overall EU-
level response to
crisis due to
availability of
critical goods.
Impossible to estimate
precisely
Wide socio-economic benefits due to limited scale of a
crisis
Main recipients: EU citizens / the entire society.
Administrative cost savings related to the ‘one in, one out’ approach*
n.a. n.a. n.a.
II. Overview of costs – Preferred option
Citizens/Consumers Businesses Administrations
(EU countries)
One-off Recurrent One-off Recurrent152
One-off Recurrent
Create
EU-level
compulso
ry
licensing
for crisis
managem
ent
Direct
adjustment
costs
0. 0 0 0
Cost of
implementing
the legislation
0
Direct
administrative
costs
0 0 0 0 0 0
Direct
regulatory
fees and
charges
0 0 0 0 0 0
Direct
enforcement
costs
0 0 0
Costs of compulsory
licensing negotiations
(but lower than in
status quo as a single
procedure at EU level
would replace
multiple procedures in
each EU country
concerned)
0
Cost of
compulsory
licensing
negotiations and
EU countries
involvement in
the committee
for the adoption
of the activation
measure153
.
Indirect costs 0 0 0 0 0 0
Costs related to the ‘one in, one out’ approach
151
Some minor administrative costs of reporting may be incurred by Member States, which do not fall
under the ‘one-in one-out’ approach.
152
The frequency of recurrent costs is expected to be extremely low, as they would be incurred only in the
event of a cross-border crisis and if there is a need to use compulsory licensing for crisis management.
153
If establishing a separate committee necessary (otherwise the existing bodies would be used).
70
Total
Direct
adjustment
costs
0 0 0 0
Indirect
adjustment
costs
0 0 0 0
Administrativ
e costs (for
offsetting)
0 0 0 0
3. RELEVANT SUSTAINABLE DEVELOPMENT GOALS
III. Overview of relevant Sustainable Development Goals – Preferred Option(PO4)
Relevant SDG Expected progress towards the Goal Comments
More effective response to a major cross-border crisis affecting the EU can be potentially related to:
Goal 3: Good health and
well-being
 facilitate access to critical
products that may be necessary to
prevent epidemics, reduce
mortality, ensure access to
healthcare.
If the crisis concerns health-related
aspects.
Goal 6: Ensure
availability and
sustainable management
of water and sanitation
for all
Goal 13: Take urgent
action to combat climate
change and its impacts
 depending on the exact type of
crisis, for example: ensure access
to clean water, reduce pollution,
minimize the release of hazardous
chemicals, etc.
 strengthen resilience and adaptive
capacity to climate-related hazards
and natural disasters,
If the crisis concerns environmental
aspects.
Goal 7: Ensure access to
affordable, reliable,
sustainable and modern
energy for all
 depending on the exact type of
crisis, for example: ensure access
to energy, improve energy
efficiency, upgrade technology for
supplying modern and sustainable
energy
If the crisis concerns energy
networks and energy supply.
Goal 8: Promote
sustained, inclusive and
sustainable economic
growth, full and
productive employment
and decent work for all
 help sustain per capita economic
growth in accordance with
national circumstances (despite
the crisis);
 help restore full and productive
employment.
If the crisis affects productive
activities, jobs or entrepreneurship.
Goal 9: Build resilient
infrastructure, promote
inclusive and sustainable
industrialization and
foster innovation
 help restore quality, reliable,
sustainable and resilient
infrastructure, including regional
and trans-border infrastructure, to
support economic development
and human well-being;
 help restore the technological
capabilities of industrial sectors.
If the crisis concerns industrial,
regional or trans-border
infrastructure, or technologies and
industrial processes.
Goal 11: Make cities and
human settlements
inclusive, safe, resilient
and sustainable
 depending on the exact type of
crisis, for example: provide access
to safe, affordable, accessible and
sustainable transport systems,
reduce the number of people
affected and substantially decrease
If the crisis concerns urban
infrastructure or other human
settlements.
71
the direct economic losses relative
to global gross domestic product
caused by disasters, including
water-related disasters;
Figure 12: Relevance to UN Sustainable Development Goals – example of European Patents active in Germany
Source: PatentSight®, search executed on 11/12/2022.
72
ANNEX 4: ANALYTICAL METHODS
The analysis contained in this impact assessment predominantly builds on input from
stakeholder collected via the open public consultation, a dedicated study “Compulsory
licensing of intellectual property rights” (see Annex 1, point 4) and data collected from
desk research (e.g. academic studies, existing impact assessment reports such as SMEI
proposals, etc.). Whenever possible, a quantitative information is provided and analysed.
For example, a small in-house analysis concerning the geographical coverage of
European patents was carried out and then used in the problem definition – the
methodology applied for this task is discussed below.
Nonetheless, as compulsory licensing is the “last resort instrument” it is used only in
exceptional circumstances therefore the available data on the subject is extremely scarce.
In view of the absence of granular data on the subject, this assessment discusses the
plausible magnitude of potential impacts of each policy option, rather than its exact
quantification in monetary terms. As a consequence, the cost/benefit analysis is not
developed to the level that otherwise is expected in an impact assessment. As a fall-back
strategy, the main evidence base of the report comes from the consultations with
stakeholders (see Annex 2).
GEOGRAPHICAL COVERAGE
The objective of this task was to identify the average number of Member States in which
patents needed in a crisis situation are active. In order to build such hypothetical case, the
recent COVID pandemics was used as a proxy for a possible crisis. A list of patents that
could be needed in such situation was established based on PatentScope COVID-19
INDEX154
where the following areas were identified as pertinent to a global health crisis
caused by coronavirus:
 Artificial respiration,
 Diagnostics,
 Disinfection,
 Informatics,
 Medical Equipment,
 Medical Facilities and Transport,
 Medical Treatment,
 Medical treatment/Prophylactic,
 Medical treatment/Therapeutic,
 Personal protective equipment.
154
https://patentscope.wipo.int/search/en/covid19.jsf (the new PatentScope search facility provides search
queries specially curated by patent information experts who have identified technological areas relevant to
the detection, prevention and treatment of COVID-19)
73
The PatentScope COVID-19 INDEX defines the exact scope of relevant patents by using
International patent classification (ICP)155
codes listed in Table 13, below.
Table 13: List of IPC codes used in PatentScope COVID-19 Index
A61H 31/00 Artificial respiration or heart stimulation, e.g. heart massage
A61M 16/00 Devices for influencing the respiratory system of patients by gas treatment, e.g. mouth-to-
mouth respiration; Tracheal tubes
A61B DIAGNOSIS; SURGERY; IDENTIFICATION
A61B 1/00 -
>A61B 16/00
Instruments for performing medical examinations of the interior of cavities or tubes of the
body by visual or photographical inspection, e.g. endoscopes; Illuminating arrangements
therefor
A61B 5/00 Measuring for diagnostic purposes; Identification of persons
A61B 5/01 Measuring for diagnostic purposes; Identification of persons + Measuring temperature of
body parts
A61B 5/08 Measuring for diagnostic purposes; Identification of persons + Measuring devices for
evaluating the respiratory organs
A61B 6/00 Apparatus for radiation diagnosis, e.g. combined with radiation therapy equipment
C12Q MEASURING OR TESTING PROCESSES INVOLVING ENZYMES, NUCLEIC
ACIDS OR MICROORGANISMS; COMPOSITIONS OR TEST PAPERS THEREFOR;
PROCESSES OF PREPARING SUCH COMPOSITIONS; CONDITION-RESPONSIVE
CONTROL IN MICROBIOLOGICAL OR ENZYMOLOGICAL PROCESSES
C12Q 1/00 Measuring or testing processes involving enzymes, nucleic acids or microorganisms;
Compositions therefor; Processes of preparing such compositions
C12Q 1/68 Measuring or testing processes involving enzymes, nucleic acids or microorganisms;
Compositions therefor; Processes of preparing such compositions + involving nucleic
acids
C12Q 1/70 Measuring or testing processes involving enzymes, nucleic acids or microorganisms;
Compositions therefor; Processes of preparing such compositions + involving virus or
bacteriophage
G01N INVESTIGATING OR ANALYSING MATERIALS BY DETERMINING THEIR
CHEMICAL OR PHYSICAL PROPERTIES
G01N 33/48 Investigating or analysing materials by specific methods not covered by groups G01N1/-
G01N31/131 + Biological material, e.g. blood, urine; Haemocytometers
G01N 33/569 Investigating or analysing materials by specific methods not covered by groups G01N1/-
G01N31/131 + Biological material, e.g. blood, urine; Haemocytometers + Chemical
analysis of biological material, e.g. blood, urine; Testing involving biospecific ligand
binding methods; Immunological testing + Immunoassay; Biospecific binding assay;
Materials therefore + for microorganisms, e.g. protozoa, bacteria, viruses
A61L 2/00 Methods or apparatus for disinfecting or sterilising materials or objects other than
foodstuffs or contact lenses; Accessories therefor
A61L 9/00 Disinfection, sterilisation or deodorisation of air
F24F 3/16 Air-conditioning systems in which conditioned primary air is supplied from one or more
central stations to distributing units in the rooms or spaces where it may receive
secondary treatment; Apparatus specially designed for such systems + characterised by
the treatment of the air otherwise than by heating and cooling + by purification, e.g. by
filtering; by sterilisation; by ozonisation
G16B BIOINFORMATICS, i.e. INFORMATION AND COMMUNICATION TECHNOLOGY
SPECIALLY ADAPTED FOR GENETIC OR PROTEIN-RELATED DATA
PROCESSING IN COMPUTATIONAL MOLECULAR BIOLOGY
G16C COMPUTATIONAL CHEMISTRY; CHEMOINFORMATICS; COMPUTATIONAL
MATERIALS SCIENCE
G16H HEALTHCARE INFORMATICS, i.e. INFORMATION AND COMMUNICATION
TECHNOLOGY SPECIALLY ADAPTED FOR THE HANDLING OR PROCESSING
OF MEDICAL OR HEALTHCARE DATA
A61B 50/00 Containers, covers, furniture or holders specially adapted for surgical or diagnostic
155
Established by the Strasbourg Agreement of 1971.
74
appliances or instruments, e.g. sterile covers
A61B 50/39 Containers, covers, furniture or holders specially adapted for surgical or diagnostic
appliances or instruments, e.g. sterile covers + Containers specially adapted for
packaging, protecting, dispensing, collecting or disposing of surgical or diagnostic
appliances or instruments + for collecting or disposing of used articles + the containers
containing antimicrobial, antiviral or disinfectant agents
A61M DEVICES FOR INTRODUCING MEDIA INTO, OR ONTO, THE BODY; DEVICES
FOR TRANSDUCING BODY MEDIA OR FOR TAKING MEDIA FROM THE
BODY; DEVICES FOR PRODUCING OR ENDING SLEEP OR STUPOR
A61M 1/00 Suction or pumping devices for medical purposes; Devices for carrying-off, for treatment
of, or for carrying-over, body-liquids; Drainage systems
B25J MANIPULATORS; CHAMBERS PROVIDED WITH MANIPULATION DEVICES
B25J 9/00 Programme-controlled manipulators
C12M APPARATUS FOR ENZYMOLOGY OR MICROBIOLOGY
C12M 3/00 Tissue, human, animal or plant cell, or virus culture apparatus
A61G TRANSPORT, PERSONAL CONVEYANCES, OR ACCOMMODATION
SPECIALLY ADAPTED FOR PATIENTS OR DISABLED PERSONS; OPERATING
TABLES OR CHAIRS; CHAIRS FOR DENTISTRY; FUNERAL DEVICES
A61G 3/00 Ambulance aspects of vehicles; Vehicles with special provisions for transporting patients
or disabled persons, or their personal conveyances, e.g. for facilitating access of, or for
loading, wheelchairs
A61G 10/00 Treatment rooms for medical purposes
A61G 12/00 Accommodation for nursing, e.g. in hospitals, not covered by groups A61G1/-
A61G11/120; Prescription lists
A61K PREPARATIONS FOR MEDICAL, DENTAL, OR TOILET PURPOSES
A61K 35/00 Medicinal preparations containing materials or reaction products thereof with
undetermined constitution
A61K 45/00 Medicinal preparations containing active ingredients not provided for in groups
A61K31/-A61K41/132
C07K PEPTIDES
A61K 35/76 Medicinal preparations containing materials or reaction products thereof with
undetermined constitution + Microorganisms or materials therefrom + Viruses; Subviral
particles; Bacteriophages
A61K 38/00 Medicinal preparations containing peptides
A61K 39/00 Medicinal preparations containing antigens or antibodies
A61K 39/12 Medicinal preparations containing antigens or antibodies + Viral antigens
A61K 39/215 Medicinal preparations containing antigens or antibodies + Viral antigens +
Coronaviridae, e.g. avian infectious bronchitis virus
C07K 14/165 Peptides having more than 20 amino acids; Gastrins; Somatostatins; Melanotropins;
Derivatives thereof + from viruses + RNA viruses + Coronaviridae, e.g. avian infectious
bronchitis virus
C12N MICROORGANISMS OR ENZYMES; COMPOSITIONS THEREOF;
PROPAGATING, PRESERVING, OR MAINTAINING MICROORGANISMS;
MUTATION OR GENETIC ENGINEERING; CULTURE MEDIA
C12N 7/00 Viruses, e.g. bacteriophages; Compositions thereof; Preparation or purification thereof
C12N 15/00 Mutation or genetic engineering; DNA or RNA concerning genetic engineering, vectors,
e.g. plasmids, or their isolation, preparation or purification; Use of hosts therefor
C12N 15/50 Mutation or genetic engineering; DNA or RNA concerning genetic engineering, vectors,
e.g. plasmids, or their isolation, preparation or purification; Use of hosts therefor +
Recombinant DNA-technology + DNA or RNA fragments; Modified forms thereof +
Genes encoding microbial proteins, e.g. enterotoxins + Genes encoding viral proteins +
Proteins from RNA viruses, e.g. flaviviruses + Coronaviridae, e.g. infectious bronchitis
virus, transmissible gastroenteritis virus
A61K 31/00 Medicinal preparations containing organic active ingredients
A61K 33/00 Medicinal preparations containing inorganic active ingredients
A61K 36/00 Medicinal preparations of undetermined constitution containing material from algae,
lichens, fungi or plants, or derivatives thereof, e.g. traditional herbal medicines
A61K 39/395 Medicinal preparations containing antigens or antibodies + Antibodies;
Immunoglobulins; Immune serum, e.g. antilymphocytic serum
75
A61K 39/42 Medicinal preparations containing antigens or antibodies + Antibodies;
Immunoglobulins; Immune serum, e.g. antilymphocytic serum + viral
A61K 39/44 Medicinal preparations containing antigens or antibodies + Antibodies;
Immunoglobulins; Immune serum, e.g. antilymphocytic serum + Antibodies bound to
carriers
C07 ORGANIC CHEMISTRY
C07D HETEROCYCLIC COMPOUNDS
C07H SUGARS; DERIVATIVES THEREOF; NUCLEOSIDES; NUCLEOTIDES; NUCLEIC
ACIDS
C07H 21/00 Compounds containing two or more mononucleotide units having separate phosphate or
polyphosphate groups linked by saccharide radicals of nucleoside groups, e.g. nucleic
acids
C07K 16/10 Immunoglobulins, e.g. monoclonal or polyclonal antibodies + against material from
viruses + from RNA viruses
C12P FERMENTATION OR ENZYME-USING PROCESSES TO SYNTHESISE A
DESIRED CHEMICAL COMPOUND OR COMPOSITION OR TO SEPARATE
OPTICAL ISOMERS FROM A RACEMIC MIXTURE
C12P 19/34 Preparation of compounds containing saccharide radicals + Preparation of nitrogen-
containing carbohydrates + N-glycosides + Nucleotides + Polynucleotides, e.g. nucleic
acids, oligoribonucleotides
A41D 13/11 Professional, industrial or sporting protective garments, e.g. surgeons' gowns or garments
protecting against blows or punches + protecting only a particular body part + Protective
face masks, e.g. for surgical use, or for use in foul atmospheres
A41D 13/12 Professional, industrial or sporting protective garments, e.g. surgeons' gowns or garments
protecting against blows or punches + Surgeons' or patients' gowns or dresses
A61B 42/00 Surgical gloves; Finger-stalls specially adapted for surgery; Devices for handling or
treatment thereof
A61F 9/04 Methods or devices for treatment of the eyes; Devices for putting in contact-lenses;
Devices to correct squinting; Apparatus to guide the blind; Protective devices for the
eyes, carried on the body or in the hand + Eye-masks
A62B 7/00 -
>A62B 33/00
Respiratory apparatus
A62B 18/02 Breathing masks or helmets, e.g. affording protection against chemical agents or for use
at high altitudes+ Masks
A62B 23/00 Filters for breathing-protection purposes
A62B 23/02 Filters for breathing-protection purposes + for respirators
A62D 5/00 Composition of materials for coverings or clothing affording protection against harmful
chemical agents
A62D 7/00 Composition of materials for transparent parts of gas-masks, respirators, breathing bags,
or helmets
A62D 9/00 Composition of chemical substances for use in breathing apparatus
The IPC creates a hierarchical system for the classification of patents (and utility models)
according to the different technical fields to which they belong. The classification system
contains about 70 000 entries, i.e. classification symbols or codes that can be allotted to
patent documents. Symbols are arranged in a hierarchical, tree-like structure:
 at the highest level are the eight sections corresponding to very broad technical
fields (e.g., Section C deals with chemistry and metallurgy);
 sections are further subdivided into classes (e.g., Class C21 deals with the
metallurgy of iron);
76
 classes are divided into more than 600 subclasses (e.g., Subclass A21B contains
bakers' ovens and machines or equipment for baking).156
 subclass is divided into groups (e.g., “A23F 3: Tea; Tea substitutes […]”). Groups
are either main groups (e.g., “A23F 3/00: Tea; Tea substitutes […] (Not otherwise
classified)”) or subgroups (e.g., “A23F 3/16: Tea extraction […]”). The symbols of
the main groups end with “/00”.
At this point it is important to note that the list of IPC codes selected for the PatentScope
COVID-19 INDEX contains many subclasses (e.g. C07D HETEROCYCLIC
COMPOUNDS), as well as even a class (i.e. C07 ORGANIC CHEMISTRY). Yet, such
high level definitions seemed too broad for the intended analysis157
, as they may contain
a significant share of patents that were only indirectly related to fighting the pandemics.
As a consequence, these high level codes were not taken into account in the analysis
(marked with caps lock in Table 13). Nonetheless, all the remaining codes from the
Table, with the level of granularity of groups or subgroups, were used as a basis in the
search of active patents and later used to come up with the final estimate.
Once the crisis-related patents were identified according to PatentScope list of IPC,
PatentSight®158
database was used to extract the information on the number and
geographical coverage of such patents within the EU. The query resulted in 216 381
patent families in which at least one member was currently active159
in EU-27 Member
States. The dataset reporting date (i.e. last server update) was 12/08/2022. The variables
extracted were the following: Patent Family, Active Authorities Today, IPC Subclasses
(Symbol)160
.
First, the observations were identified by their granting patent office – the basic
tabulation for the main dataset is provided below (Table 14), showing that the European
Patents accounted for 87.5% of all patents in the dataset.
Table 14: Origin of patents in the retained dataset – frequency and percentage by patent office.
Patent office Freq. Percent
EP 189 316 87.49
National patent offices of EU-27 15 678 7.25
US 8 235 3.81
WO 2 396 1.11
Other 756 0.35
Total 216 381 100
156
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Glossary:International_patent_classification_(IPC)
157
Unless supplemented by a text search, which is also an option offered in PatentScope COVID-19
INDEX.
158
PatentSight® is a commercial patent database accessible upon subscription
(https://go.patentsight.com/?welcome=1 )
159
Based on the “Active Authorities Today” variable which listed names of countries where the patents
were active (i.e. the authorities in which at least one member of the patent family is currently active. This
includes both pending applications that are still under prosecution and granted patents that are still in force)
160
As explained earlier observations were searched (filtered) by IPC groups and subgroups, but once
identified, only their subclass IPC codes were exported as this level of granularity was judged sufficient for
later descriptive analysis.
77
Second, information contained in the Active Authorities variable was processed in order
to remove all other jurisdictions were the members of each patent family were active,
except for EU-27 countries. This step makes this exercise different from the usual
approach to counting the patent family size161
as defined in the literature, because it will
capture only the “EU subset” of a patent family (i.e. the patent family size would
normally include a validation in for example the US, whereas here information on non-
EU validations is ignored).
161
OECD, Measuring the technological and economic value of patents, ENQUIRIES INTO
INTELLECTUAL PROPERTY'S ECONOMIC IMPACT © OECD 2015, p. 92.
78
ANNEX 5: LEGAL BACKGROUND AND THE KEY LEGAL
PROVISIONS
5A. THE INTERNATIONAL LEGAL CONTEXT
The Paris Convention162
of 1883 already enabled countries to take legislative measures
providing for the grant of compulsory licences to prevent abuses resulting from the
exercise of patent exclusive rights163
. This explains why, at the time the TRIPS
Agreement was negotiated, most countries in the world already had in place compulsory
licensing schemes. The TRIPS Agreement leaves untouched the principles on
compulsory licensing laid down in the Paris Convention. However, it provides several
conditions for the granting of compulsory licences.
As indicated in the introduction, a compulsory licence164
refers to the possibility for a
government to allow a third party to use a patent without the authorisation of the right
holder, subject to certain conditions aiming at preserving the legitimate interests of the
patent holders. The TRIPS Agreement sets the international legal obligations as regards
compulsory licensing. It provides two types of compulsory licensing schemes: (i)
compulsory licensing for the domestic market (Article 31), which applies to all types of
products and (ii) compulsory licensing for the export, which only applies to
pharmaceutical products (article 31bis).
Article 31 allows the granting of a compulsory licence, for any type of product. In this
context, the compulsory licence must be predominantly for the supply of the domestic
market of the WTO Member authorising the use. This condition limits in practice the
export of goods made under a compulsory licence.
The TRIPS Agreement does not list the grounds on which a compulsory licence can
be granted. The WTO members retain their margin of manoeuvre in this respect, as
explicitly confirmed by the Doha Declaration165
. Nor does the TRIPS Agreement limit
the purposes of a compulsory licence, which can be to import or locally manufacture
products. In contrast, the TRIPS agreement provides several conditions under which a
162
Paris Convention for the protection of industrial property of March 20, 1883.
163
See article 5(2) of the Paris Convention that provides for that “Each country of the Union shall have the
right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses
which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to
work”. Article 5(3) further provides that forfeiture of the patent shall not be provided for except in cases
where the grant of compulsory licenses would not have been sufficient to prevent the said abuses and
article 5(4) states that a compulsory license may not be applied for on the ground of failure to work or
insufficient working before the expiration of a period of four years from the date of filing of the patent
application or three years from the date of the grant of the patent, whichever period expires last.
164
The term “compulsory licence” is found in national patent laws but not in the TRIPS Agreement where
article 31 refers to the “use [of patents] without authorization of the right holder”.
165
The Doha Declaration states in that respect that: “Each Member has the right to grant compulsory
licences and the freedom to determine the grounds upon which such licences are granted.” Article 31 lists
some possible grounds (national emergency or extreme urgency, public non-commercial use, remedy to
anti-competitive practices, dependency of patents) that are often included in national legislations (see in
that respect the EPO study on Compulsory licensing in Europe, 2018). The only limitation as regards
grounds concern semi-conductors where article 31 TRIPS provides that compulsory licensing in such case
shall only be for public non-commercial use or to remedy a practice determined after judicial or
administrative process to be anti-competitive.
79
compulsory licence can be authorised (see Annex 5). These conditions constitute the
frame for any TRIPS-compliant compulsory licensing scheme for the domestic market.
Among other conditions, Article 31 of the TRIPS Agreement does not allow compulsory
licensing to supply foreign markets (or at least not predominantly). This condition was
the result of negotiations on the TRIPS Agreement but it left a gap in the compulsory
licensing system whereby countries with no or limited manufacturing capacity were not
able to make us of this system. The link between the TRIPS Agreement and public health
was clarified in 2001 Doha Declaration (Annex 5) which also mandated further work on
the issue of the members with no or limited manufacturing capacity. This resulted in
implementation of the so-called Paragraph 6 system which in turn led to the adoption of
Article 31bis of the TRIPS Agreement.
Under Article 31bis of the TRIPS Agreement, a country can grant a compulsory licence
to the extent necessary for the purposes of production and the export of a
pharmaceutical product. It establishes a specific mechanism of mainly procedural
requirements (e.g. transparency, packaging) that would allow to address the
circumstances of two sides – the exporting country and the importing country. Depending
on where the product is protected by a patent, either only the exporting or both the
exporting and the importing country may need to issue relevant compulsory licences. The
European Union implemented this new disposition in its legal order through the adoption
of regulation (EC) No 816/2006166
. The EU may only act as an exporter to the countries
with no or limited manufacturing capacity.
5B. THE EU LEGAL CONTEXT AND PRACTICE
There is no EU harmonisation as regards compulsory licensing for the domestic market,
including as regards European patents with a unitary effect167
. EU countries have all
implemented compulsory licensing schemes but for different grounds and following
different procedures, in accordance with the flexibilities left at international level.
In contrast, compulsory licensing for export purposes of pharmaceutical products is
regulated by Regulation (EC) No 816/2006. In the context of Regulation (EC) No
816/2006, EU countries remain the main points of contacts for granting the compulsory
licence, checking whether the conditions are respected and when it is terminated. The
role of the Commission remains limited to the case where the export of the product under
a compulsory licence would be directed to an importing country which is not a WTO
member. In such case, the importing country must make a notification to the Commission
instead of the WTO.
The mechanism under Article 31bis of the TRIPS Agreement was only used once, in the
Canada-Rwanda case (see Annex 5d). In 2021 Bolivia and Antigua and Barbuda notified
the WTO of their intention to use Article 31bis of the TRIPS Agreement for the
production of COVID-19 vaccines, but this has not resulted in a compulsory licence
under the system. For the system to function, a manufacturer of these products must be
166
Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on
compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to
countries with public health problems.
167
Recital 10 of Regulation EU No 1257/2012 of 17 December 2012 implementing enhanced cooperation
in the area of the creation of unitary patent protection provides that: “compulsory licences for European
patents with unitary effect should be governed by the laws of the participating Member States as regards
their respective territories.”
80
identified and the exporting country where that manufacturer is located must be ready to
issue a compulsory licence for that purpose. Regulation (EC) No 816/2006 was never
used nor evaluated168
.
Two other EU legislations provide for a compulsory licensing scheme. First, the
Regulation on Community plant variety rights169
provides for the possibility for the Plant
Variety Office to grant a compulsory licence on a community plant variety right, on
application by a Member State, by the Commission or by an organisation set up EU
level170
. Second, the Biotech Directive171
provides for the possibility, where a plant
breeder cannot use a plant variety without infringing a patent, to apply for a compulsory
licence.
As discussed in section1.3, compulsory licensing is often presented as a ‘last resort
mechanism’172
. In the vast majority of cases, voluntary agreements are the most efficient
solution to ensure the manufacturing and supply of critical products. Voluntary
cooperation ensures not only the licensing of necessary IP, but is likely to provide the
crucial tools needed to manufacture the product, including know-how, technical
expertise, qualified personnel for training and even access to raw materials. For instance,
in the context of the COVID-19 crisis, hundreds of voluntary agreements were concluded
to ensure the scaling up of the COVID-19 related products across the globe. There were
several tries to increase the production of certain products through compulsory licences,
e.g. in Israel, Hungary and Russia, but it does not appear that they have brought major
results in terms of access to these products. Likewise, to this date, no compulsory licence
was granted to produce COVID-19 vaccines based on the WTO Decision on the TRIPS
Agreement.
5C. COMPULSORY LICENSING AND THE TRIPS WAIVER
On 2 October 2020, several WTO members submitted a proposal for a decision by the
WTO General Council that would waive WTO members’ obligation to protect and
enforce some IP rights in relation to the prevention, containment or treatment of COVID-
19. The assumption was that IP rights were an impediment to a swift scaling-up of
manufacturing capacities and that access to vaccines in developing countries could not be
found by operating within the IP system. The proposal was then made to waive IP rights.
The EU submitted an alternative proposal on 18 June 2021, insisting on the need to make
full use of the flexibilities of the TRIPS Agreement, especially as regards compulsory
licensing.
168
Article 19 of Regulation (EC) No 816/2006 provides that “Three years after the entry into force of this
Regulation, and every three years thereafter, the Commission shall present a report to the European
Parliament, the Council, and the European Economic and Social Committee on the operation of this
Regulation including any appropriate plans for amendments. The report shall cover, in particular: (a) the
application of Article 10(9) on determining the remuneration of the rights-holder; (b) the application of the
simplified and accelerated procedure referred to in Article 16(4); (c) the sufficiency of the requirements
under Article 10(5) to prevent trade diversion, and (d) the contribution this Regulation has made to the
implementation of the system established by the Decision.”
169
Regulation No 2100/94 of 27 July 1994 on Community plant variety right.
170
Article 29 of the Plant Variety Regulation.
171
Article 12 of Directive 98/44/EC of 6 July 1998 on the legal protection of biotechnological inventions.
172
Article 31 of the TRIPS Agreement requires that efforts must be made to obtain authorisation from the
right holder on reasonable terms and conditions and that such efforts proved unsuccessful. However, there
are no specific rules on what those terms and conditions are or what type and length of efforts are required.
Also, this requirement can be waived in “the case of a national emergency or other circumstances of
extreme urgency or in cases of public non-commercial use”.
81
Waiving IP rights differs from compulsory licensing. A compulsory licence is an
authorisation granted by a government to a party other than the patent holder to use
a patented invention without the consent of the patent holder. The TRIPS Agreement
explicitly allows compulsory licensing, provided that some conditions, such as a limited
duration and the payment of an adequate remuneration, are met. The TRIPS Agreement
does not provide for a mechanism to waive IP rights. Waiving IP rights consists of
depriving the patent owner of its rights, including of the possibility to ask for a
remuneration.
This explains why the EU, among other WTO members, were not in favour of waiving IP
rights. The EU considered that the TRIPS Agreement already provides for a solution,
namely compulsory licensing. Compulsory licensing is a legitimate tool to scale up the
production of critical goods. For compulsory licensing to be an efficient tool, it is
however necessary to ensure proper implementation at national level, taking full
advantage of the flexibilities of the TRIPS Agreement.
Discussions at WTO level pursued and led to a consensus during the 12th Ministerial
Conference of June 2022. The agreement mainly provides clarifications of existing
flexibilities (i.e. the calculation of the remuneration can take into account the
humanitarian and not-for-profit purpose of vaccine distribution programme, there is no
need to make efforts to obtain the authorisation from the right holder in case of an
emergency, and a compulsory licence can be based on any instrument available in the
law). In addition, the agreement waived the “predominantly for the domestic market”
condition, meaning that products manufactured under a compulsory licence can more
easily be exported to other countries.
This agreement, valid for 5 years, is applicable to developing countries and limited to
COVID-19 vaccines, with the possibility of an extension to cover the production and
supply of COVID-19 diagnostics and therapeutics. Discussions are still ongoing as
regards the extension of the agreement.
5D. CONDITIONS UNDER WHICH A COMPULSORY LICENCE CAN BE GRANTED
UNDER ARTICLE 31 OF THE TRIPS AGREEMENT
Article 31 of the TRIPS agreement provides several conditions under which a
compulsory licence can be authorised which can be summarised as follows:
 The compulsory licence shall be considered on its individual merits. This condition
aims at preventing blanket authorisations not taking into account the circumstances
of each authorisation.
 Prior to the compulsory licence, the user shall made efforts to obtain authorisation
from the right holder on reasonable terms and conditions. This requirement may be
waived in the case of a national emergency or other circumstances of extreme
urgency173
or in cases of public non-commercial use.
 The scope and duration of the compulsory licence shall be limited to the purpose for
which it was authorised.
173
The Doha Declaration states in that respect that “Each Member has the right to determine what
constitutes a national emergency or other circumstances of extreme urgency, it being understood that
public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other national
emergency or other circumstances of extreme urgency”.
82
 The compulsory licence shall be non-exclusive and non-assignable.
 The compulsory licence shall be authorised predominantly for the supply of the
domestic market.
 The compulsory licence shall be terminated if and when the circumstances which
led to it cease to exist and are unlikely to recur. This condition is subject to the
legitimate interests of the licensee.
 The right holder shall be paid adequate remuneration.
 The legal validity of any decision relating to the authorisation of a compulsory
licence and any decision relating to the remuneration shall be subject to judicial
review.
5E. ARTICLE 31BIS OF THE TRIPS AGREEMENT AND ITS IMPLEMENTATION
IN EU LAW
Article 31 of the TRIPS Agreement does not allow compulsory licensing to supply
foreign markets (or at least not predominantly). At the height of the AIDS epidemic this
quickly proved controversial. Once bound by the TRIPS Agreement, countries with
manufacturing capacities could no longer export goods manufactured under a
compulsory licensing to foreign markets. Some countries, facing grave public health
problems, consider that the system implemented by the TRIPS Agreement severely
affected their access to medicines174
. This led in 2001 to the Doha Declaration which in
turn led to the adoption of Article 31bis of the TRIPS Agreement.
The Doha Declaration first recognised the “gravity of the public health problems
affecting many developing and least-developed countries, especially those resulting from
HIV/ AIDS, tuberculosis, malaria and other epidemics.” With that background, the Doha
Declaration reaffirmed the right of WTO members to ‘use, to the full, the provisions in
the TRIPS Agreement, which provide flexibility for this purpose’. These flexibilities
include:
 the right for each Member to grant compulsory licences, to freely determine the
grounds for such licences, and to freely establish its own exhaustion regime;
 the right for each Member to determine what constitutes a national emergency or
other circumstances of extreme urgency.
Importantly, paragraph 6 of the Doha Declaration stated that “WTO Members with
insufficient or no manufacturing capacities in the pharmaceutical sector could face
difficulties in making effective use of compulsory licensing under the TRIPS Agreement.
We instruct the Council for TRIPS to find an expeditious solution to this problem”.
Based on that, the WTO Decision of 30 August 2003 was adopted. It introduced Article
31bis into the TRIPS Agreement, whose main feature can be summarised as follows:
174
Before the TRIPS Agreement, Low and Medium Income Countries (LMCIs) were able to obtain
medicines manufactured in countries where patent rights were not recognised. The TRIPS Agreement put a
stop to such practices as WTO members were under the obligation to grant and respect patent rights and
only allow compulsory licensing predominantly for the supply of their domestic market.
83
 This mechanism only concerns pharmaceutical products which are defined in the
2003 Decision as any patented product, or product manufactured through a patented
process, of the pharmaceutical sector needed to address the public health
problems175
.
 Export is only possible to eligible importing Members. The 2003 Decision specifies
that eligible importing Members include any least-developed country Member and
any other Member that has made a notification to the Council for TRIPS of its
intention to use the system as an importer176
. EU countries have opted out of using
the system as importers.
 The importing country must make a notification to the Council of TRIPS on (i) the
names and expected quantities of the expected products, (ii) its insufficient or lack
of manufacturing capacities177
and (iii) its intention to grant a compulsory licence in
accordance with article 31 of the TRIPS Agreement.
 The compulsory licence issued by the exporting country must respect the following
conditions: (i) only the amount necessary to meet the needs of the eligible importing
Member(s) may be manufactured under the licence and the entirety of this
production shall be exported; (ii) the products produced under the licence shall be
clearly identified through specific labelling or marking and (iii) before shipment
begins, the licensee shall post on a website information on the quantities being
supplied to each destination and the distinguishing features of the product(s). The
exporting country must also notify to the Council of TRIPS the grant of the licence.
 Adequate remuneration must be paid in the exporting country but not in the
importing country if the compulsory licence to import was granted for the same
products already covered by the compulsory licence to export.
 Importing countries must take reasonable anti-diversion measures to prevent re-
exportation of products made under the compulsory licence (best efforts obligation).
The European Union implemented this new disposition in its legal order through the
adoption of Regulation (EC) 816/2006 which relevant features can be summarised as
follows:
 The regulation covers compulsory licensing178
for the manufacture and sale of
pharmaceutical products179
intended for export to eligible importing countries in
need of such products.
 In terms of procedure, Member States can provide a compulsory licence to any
person making an application180
to the competent authority181
of the Member
175
Active ingredients necessary for its manufacture and diagnostic kits needed for its use are explicitly
included. Vaccines are not explicitly mentioned but it is usually considered that they are covered.
176
Members can decide to use the system as importers in a limited way, for example only in the case of a
national emergency or other circumstances of extreme urgency or in cases of public non-commercial
use. This was for instance the case of some EU countries (e.g. Czech Republic, Cyprus, Estonia,
Lithuania, etc.) before their accession to the European Union. This is still the case for non EU countries
such as China, Israel, Mexico, Türkiye.
177
Unless the importing country is a least developed country.
178
Compulsory licensing of patents and supplementary protection certificates.
179
Pharmaceutical products are defined as any product of the pharmaceutical sector, including medicinal
products as defined in Article 1(2) of Directive 2001/83/EC.
84
State(s) where the patents and supplementary protection certificates have effect and
cover the manufacture and sale for exports. A person can apply for a compulsory
licence to authorities in more than one country. In accordance with the TRIPS
Agreement, importing country(ies) must make a notification to the WTO or, in case
of a non-WTO member, to the Commission.
 The application for a compulsory licence must include evidence of a specific request
from (i) authorised representatives of the importing country(ies), (ii) a non-
governmental organisation acting with the formal authorisation of the importing
country(ies), or (iii) UN bodies or other international health organisations with the
formal authorisation of the importing country(ies).
 The compulsory licence must be limited to the purpose of manufacturing the
product for export and distribution in the country(ies) cited in the application.
Products made or imported under the compulsory licence cannot be put on the
market of another country182
. To this end, the regulation provides for specific
labelling obligations as well as the setting-up of a website with relevant information
on the quantities and features of products made under the compulsory licence.
 Adequate remuneration must be paid by the licensee to the right-holders as
determined by the competent authority.
5F. THE RWANDA – CANADA CASE UNDER ARTICLE 31BIS OF THE TRIPS
AGREEMENT
The mechanism under Article 31bis of the TRIPS Agreement was only used once, in the
context of the Canada-Rwanda case. Médecins Sans Frontières (Doctors without
Borders) had identified five urgently needed drugs for its field projects, one of them
being a treatment for HIV/ AIDS. Rwanda was the importing country in need of access to
HIV medicine183
. A Canadian privately held generic manufacturer, Apotex, agreed to
produce the drugs. The chronology of the process of exporting Apo-TriAvir went as
follows184
:
180
Article 6(3) of Regulation (EC) No 816/2006 provides the elements to be included in the application
(such as the name and contact details of the applicant, the non-proprietary name of the pharmaceutical
product, the amount needed, where applicable, evidence of prior negotiation).
181
Member States need to notify the Commission of the designated competent authority to grant
compulsory licences under Regulation (EC) No 816/2006.
182
Article 13 of the Regulation provides for the prohibition of importation on the territory of the EU.
183
Médecins Sans Frontières, “Neither expedious, nor a solution: The WTO August 30th decision is unworkable”,
Issue Brief, 29 August 2006 : https://msfaccess.org/neither-expeditious-nor-solution-wto-august-30th-decision-
unworkable
184
Rwanda’s notification to the WTO Council for TRIPS, 19 July 2007,
https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-
DP.aspx?language=E&CatalogueIdList=67527&CurrentCatalogueIdIndex=0&FullTextSearch=
- Canada’s notification to the WTO Council of grant of a CL for export under the 30 August 2003 decision, 4 October
2007: https://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_e.htm
85
Figure 13: Chronology of the process of exporting Apo-TriAvir
Source: CEIPI(2023), p. 65.
The first shipment of the Apotex drug was sent to Rwanda in September 2008185
.
However, it appears that, by the time the first shipment of Apo-TriAvir arrived to
Rwanda, a generic product made by a Chinese manufacturer was already on the market.
Although the export of Apo-TriAvir is the first and only fully executed case of
compulsory licensing under Art. 31bis, all parties involved in the procedure criticized the
Canadian compulsory licensing law and deemed it “unworkable”186
. In their review of
the Canadian compulsory licensing law submitted to the Government of Canada,
Médecins Sans Frontières criticized the process provided for in the Canadian compulsory
licensing law as being onerous and unnecessarily hindered by Health Canada’s approval
for eligibility under the regime187
. A key criticized element is the timeframe in the
Rwandan case expanding over four and a half years before the first shipment was ever
made. Upon completion of the application, the manufacturing company in Canada
declared that they would not go through the Canadian compulsory licensing law process
again unless it were simplified188
. The delay could be explained by the implication of
Health Canada and the Canadian Intellectual Property Office as evidenced by the process
map below (Figure 14).
185
K. Lybecker and E. Fowler, “Compulsory Licensing in Canada and Thailand: Comparing Regimes to
Ensure Legitimate Use of the WTO Rules”, Journal of Law, Medicine & Ethics, Vol. 37, Issue 2, Summer
2009, pp. 222-239.
186
Apotex Corp. Press Release after receiving final tender approval from Rwanda for Vital HIV drugs, 7
May 2008, https://www.biospace.com/article/releases/apotex-corp-receives-final-tender-approval-from-
rwanda-for-vital-aids-drug-/
187
Médecins Sans Frontières, idem, supra 130.
188
T.Talaga, ”Hope for cheap HIV drugs dims”, Toronto Star, 19 September 2009, available at:
https://www.thestar.com/life/health_wellness/2009/09/19/hope_for_cheap_hiv_drugs_dims.html.
December 2004 - Apotex
agreement to produce a
fixed-dose combination
September 2005 -
Amendment of Schedule 1
of CAMR to include fixed-
dose combination drugs
August 2006 - Regulatory
approval of product by
Health Canada
May 2007 - Rwanda
notification to the WTO
Council for TRIPS of intent
to import medicine under
Art. 31bis
September 2007 - Apotex
files and obtains a 2-year CL
October 2007 - Canada
notification to WTO Council
for TRIPS of intent to export
medicine
May 2008 - Apotex received
final tender approval from
Rwanda to export the CL
drug
86
Figure 14: Access to Medicine Process - Health Canada and the Canadian Intellectual Property Office
Source: CEIPI(2023), page 66.
The Canadian compulsory licensing law has been amended several times since the
Médecins Sans Frontières initiative, but it appears it has not been used since the
Rwandan case, as demonstrated by Health Canada’s189
most recent reports as well as the
WHO, WIPO and WTO 2020 study on “Promoting Access to Medical Technologies and
Innovation”190
.
189
Health Canada evaluation reports: https://www.canada.ca/en/health-canada/corporate/transparency/corporate-
management-reporting/evaluation.html
190
“Promoting Access to Medical Technologies and Innovation - Second Edition - Intersections between public health,
intellectual property and trade”, 29 July 2020: https://www.wto.org/english/res_e/publications_e/who-wipo-
wto_2020_e.htm
Identification of eligible importing country and product
Patent search
(Where applicable): File drug submission then file the distinguishing features
package with Health Canada + differences in export product marking if applicable
Negotiations for voluntary licence with patentee
Patentee's refusal to grand a voluntary agreement
Submission of WTO notification by both exporter and importer
Submission of solum declaration for export to Health Canada
Provision of copy of supply agreement with importing country to the Health Canada commissionner
and the patentees
Website notification and payment of royalties
Provision of notice for export
 Access to medicine process initiated
87
ANNEX 6: SUPPLEMENTARY EVIDENCE
Illustration of the need for several national compulsory licences in case of EU cross-
border crisis
Figure 15 and Figure 16 below are provided to illustrate the need for several national
compulsory licences in case of EU cross-border crisis affecting the Single Market,
especially with regards to the need of issuing corresponding licences for all partners
involved in the manufacturing process, as well as in the final use. In addition, national
compulsory licences remain applicable to the national territory, meaning that the goods
produced under a compulsory licence cannot be exported to another Member State, or
only in small quantities
Figure 15: National compulsory licensing systems in practice in case of a patented product with cross-border value
chains – example
Source: own elaborations.
Figure 16: EU compulsory licensing system in practice in case of Member States with export limitations – example
Source: own elaborations.
88
Figure 17: Export of goods to other Member States, 2021, [EUR billion]
Source: Eurostat - Comext DS-018995, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Intra-
EU_trade_in_goods_-_main_features
Table 15: Are current national laws on compulsory licensing fit to tackle: national crisis?
I am giving my contribution as No
No
opinion Yes Total
Academic/research institution 3 1 1 5
Business association 1 1 19 21
Company/business organisation 1 1 15 17
Consumer organisation 1 0 0 1
EU citizen 6 1 4 11
Non-governmental organisation (NGO) 6 0 0 6
Other 2 2 2 6
Public authority 1 1 2 4
Total 21 7 43 71
Source: Open public consultation, Question 3
Table 16: Are current national laws on compulsory licensing fit to tackle: EU crisis?
I am giving my contribution as No
No
opinion Yes Total
Academic/research institution 4 1 0 5
Business association 2 1 18 21
Company/business organisation 2 1 14 17
Consumer organisation 1 0 0 1
EU citizen 7 1 3 11
Non-governmental organisation (NGO) 6 0 0 6
Other 1 2 2 5
Public authority 2 1 1 4
Total 25 7 38 70
Source: Open public consultation, Question 3
Table 17: Are current national laws on compulsory licensing fit to tackle: global crisis?
I am giving my contribution as No
No
opinion Yes Total
Academic/research institution 4 1 0 5
89
Business association 2 1 18 21
Company/business organisation 1 1 15 17
Consumer organisation 1 0 0 1
EU citizen 7 1 2 10
Non-governmental organisation (NGO) 5 0 0 5
Other 1 3 1 5
Public authority 1 2 1 4
Total 22 9 37 68
Source: Open public consultation, Question 3
Table 18: Number of Member States where EP patents were active, by COVID-related IPC as defined in PatentScope
COVID Index (WIPO)
IPC Description
Average
all
patents
Average
EP
Total
patent
families
A41D - OUTERWEAR; PROTECTIVE GARMENTS;
ACCESSORIES 2.35 3.61 1738
A61B - DIAGNOSIS; SURGERY; IDENTIFICATION 2.49 3.01 61955
A61F - FILTERS IMPLANTABLE INTO BLOOD VESSELS;
PROSTHESES; [...] BANDAGES [...]; FIRST-AID KITS 3.62 4.03 8987
A61G - TRANSPORT, PERSONAL CONVEYANCES, OR
ACCOMMODATION SPECIALLY ADAPTED FOR PATIENTS OR
DISABLED PERSONS 2.76 3.52 1970
A61H - PHYSICAL THERAPY APPARATUS;[...] ARTIFICIAL
RESPIRATION; 2.86 3.40 1834
A61K - PREPARATIONS FOR MEDICAL, DENTAL, OR TOILET
PURPOSES 6.53 7.27 99648
A61L - METHODS OR APPARATUS FOR STERILISING
MATERIALS OR OBJECTS [...]; DISINFECTION, STERILISATION
[...] 3.70 4.47 14964
A61M - DEVICES FOR INTRODUCING MEDIA INTO, OR
ONTO, THE BODY 3.52 3.88 22375
A62B - DEVICES, APPARATUS OR METHODS FOR LIFE-
SAVING 2.31 2.96 2663
A62D - [...] COMPOSITION OF CHEMICAL MATERIALS FOR
USE IN BREATHING APPARATUS 3.46 4.09 202
B25J - MANIPULATORS; CHAMBERS PROVIDED WITH
MANIPULATION DEVICES 1.90 2.62 9734
C07D - HETEROCYCLIC COMPOUNDS 7.74 8.18 24052
C07H - SUGARS; DERIVATIVES THEREOF; NUCLEOSIDES;
NUCLEOTIDES; NUCLEIC ACIDS 6.45 6.74 9689
C07K – PEPTIDES 7.20 7.54 33736
C12M - APPARATUS FOR ENZYMOLOGY OR
MICROBIOLOGY 3.87 4.23 8780
C12N - MICROORGANISMS OR ENZYMES; COMPOSITIONS
THEREOF; [...] 6.16 6.54 46613
C12P - FERMENTATION OR ENZYME-USING PROCESSES TO
SYNTHESISE A DESIRED CHEMICAL COMPOUND[...] 6.77 7.06 14042
C12Q - MEASURING OR TESTING PROCESSES INVOLVING
ENZYMES, NUCLEIC ACIDS OR MICROORGANISMS 4.63 5.07 26094
90
G01N - INVESTIGATING OR ANALYSING MATERIALS BY
DETERMINING THEIR CHEMICAL OR PHYSICAL PROPERTIES 4.33 4.78 33219
G16B - BIOINFORMATICS, [...] ICT SPECIALLY ADAPTED FOR
GENETIC OR PROTEIN-RELATED DATA PROCESSING [...] 4.84 5.15 2072
G16C - COMPUTATIONAL CHEMISTRY;
CHEMOINFORMATICS; COMPUTATIONAL MATERIALS
SCIENCE 4.79 5.02 329
G16H - HEALTHCARE INFORMATICS, [...] ICT SPECIALLY
ADAPTED FOR THE HANDLING OR PROCESSING OF
MEDICAL OR HEALTHCARE DATA 2.73 3.26 7441
F24F - AIR-CONDITIONING; AIR-HUMIDIFICATION;
VENTILATION; USE OF AIR CURRENTS FOR SCREENING 2.35 3.14 1744
Source: own analysis based on PatentSight® data for selected IPC codes; Note: IPC descriptions shortened.
Figure 18: Main branch groups in parts and components - share of parts and components in each branch group’s
trade (%)
Source: Gaulier, G., Sztulman A., Ünal D., Are Global Value Chains Receding? The Jury Is Still Out. Key Findings
from the Analysis of Deflated World Trade in Parts and Components, CEPII Working Paper 2019-01, Paris, page 18.
91
Table 19: Overview of different national grounds for a compulsory licensing(CL) applicable in crises
Member
State
Legal provision for
granting CL for
crisis management
Competent authority for
crisis CL
Assessment Comment
Austria Austrian Patent Act
(Patentgesetz), section
36(5)
Austrian Patent Office Public interest crises “public interest”, could be also in case of a “national emergency” or “other
circumstances of extreme urgency”
Belgium Code of Economic Law,
Art. XI.38
Council of Ministers (for public
health CL).
Public health crises “public health grounds”
“a) a medicine, a medical device, a medical device or product for diagnosis, a derived
or combinable therapeutic product; b) the process or product necessary for the
fabrication of one or more products indicated under a); and c) a diagnostic method
applied outside the human or animal body”
Bulgaria Law of Patents and Utility
Models Registration
(1993), Art. 32(2)
Bulgarian Patent Office
(Disputes department)
Public interest “public interest, even if negotiations with the right owner have not been conducted”
Croatia Patent Act, Art. 104(5) Zagreb Commercial Court National urgency “in situations of extreme urgency on a national level, in particular for national security,
public interest protection in the field of health, food supply, environmental protection
and improvement, or to remedy an anti-competitive practice”
Cyprus Cypriot Patents Act, Sec.
55
Council of Ministers National security or
public safety
“in situations of extreme urgency on a national level, in particular for national security,
public interest protection in the field of health, food supply, environmental protection
and improvement”
Czechia Act on Inventions and
Rationalisation Proposals
No. 527/1990 Coll.
(Czech Patent Act), Sec.
20
Industrial Property Office Public Interest “in there exists a threat to an important public interest”
Denmark Danish Patents Act, Sec.
47
Maritime and Commercial High
Court in cases on the merits
(Section 50 of the Patents Act)
Public interest “essential public interests render it necessary”
Estonia Estonian Patents Act of
16 March 1994, Sec.
47(1)
Harju County Court (court of
first instance)
National defence and
public interest
“national defence, environmental protection, public health and other significant
national interests of the Republic of Estonia require the use of the invention, including
the need to use the invention in connection with a natural disaster or other emergency”
“in the event of an epidemic” and in an emergency situation” (referring to the meaning
set in the Communicable Disease Prevention and Control Act and in the Emergency
Situation Act)
92
Finland Finnish Patents Act
(550/1967), Sec. 47
Market Court Public interest “considerable public interest”
France French Intellectual
Property Code (CPI), Art.
L613-16
Ministry in charge of industrial
property (on request of the
Ministry of Public Health)
Public heath “Interests of public health”:
“(a) a medicinal product, a medical device, an in vitro diagnostic medical device or an
ancillary therapeutic product
(b) a process for obtaining them, a product necessary for obtaining them or a process
for manufacturing such a product
c) an ex vivo diagnostic method.”
“The patents for these products, processes or diagnostic methods may only be subject
to the ex officio license system in the interest of public health when these products, or
products derived from these processes, or these methods are made available to the
public in insufficient quantity or quality or at abnormally high prices, or when the
patent is exploited under conditions that are contrary to the interest of public health”
Art. L613-18 CPI Ministry in charge of industrial
property
National economy “in the interest of the national economy”: “if the absence of working or the inadequacy
in quality or quantity of the working undertaken is seriously prejudicial to economic
development and the public interest”
Art. L613-19 CPI Ministry in charge of industrial
property (on request of the
ministry in charge of national
defence)
National defence “in the interest of the national defence”
Law n° 2020-290 of
March 23, 2020 of
emergency to face the
epidemic of covid-19
introduced a new article
L.3131-15 in the public
health code
Prime Minister Public health This article allows the Prime Minister, when a state of health emergency is declared,
and for the sole purpose of guaranteeing public health :
- to order the requisition of all goods and services necessary for the fight against the
health disaster as well as of any person necessary for the functioning of these services
or the use of these goods;
- to take any measure allowing the provision of appropriate medicines to patients for
the eradication of the health disaster.
Germany Sec. 24(1) Patent Act
(Patent Gesetz)
Federal Patent Court
(Bundespatentgericht)
Public interest “the public interest calls for the grant of a compulsory licence”.
Public interest cannot be described in general. It exists if a medicine to treat serious
illnesses has specific therapeutic characteristics that comparable medicines do not have,
or not to the same extent or if the use of such a medicine leads to a reduction of side
effects that would have been suffered when prescribing/using different medicines.
However, public interest cannot exist if there is a similar treatment possible with a
different medicine191
.
Infektionsschutzgesetz -
IfSG and Sec. 13 German
Federal Ministry of Health “epidemic situation of national importance is determined by the German Bundestag”
191
EPO(2018), p. 30.
93
PA
Greece Arts. 13 Greek Patents
Act
Hellenic Property Organisation
(OBI)
National health or
national defence
“Imperative need for purposes of national health or national defence exists”.
Hungary Art. 33/B(1) Hungarian
Patents Act
Hungarian Intellectual Property
Office (HIPO) is
competent to grant compulsory
licences based on
Art. 33/A PA (for the treatment
of public health problems).
Public health “For the interest of public health problems”
“In the interest of meeting domestic demand stemming from a public health crisis”
referred to in Subsection (2) of Section 228 of Act CLIV of 1997 on Health Care.
Covering patented medicinal products, active substances or investigational medicinal
products as well as medical devices or for patented procedures, equipment or devices
required for the production of healthcare products.
Ireland Sections 70 to 75 of the
Patents Act 1992. Buscar
cual
Controller of Patents, Trade
Marks and Designs
X “a demand in the State for the subject matter of the patent is not being met or is not
being met on reasonable terms or that the establishment or development of commercial
or industrial activities in the State is unfairly prejudiced”
Italy Intellectual Property Code
(Codice della proprietà
industriale
2005, hereinafter IP Code
or IPC), Art. 70-bis
Italian Minister of Health in
agreement with the Italian
Minister of Economic
Development
National emergency “national health emergency” for “medicines and medical devices deemed essential for
dealing with the health emergency” (requires the declaration of a state of emergency)
Latvia192
Art. 54(3) of the Patent
Law of 2007, amended on
1 January 2016.
Administrative court of first
instance
National defence or
economic interests
“vital importance for the welfare, defence or economic interests of the people of
Latvia”
Art. 54(5) Patent Law Cabinet of Ministers National emergency “state of national emergency”
Lithuania Patent Law of the
Republic of Lithuania of
18 January 1994,
No. I-372 (modified on 3
February 2012).
Government of the Republic Public needs,
national security or
public health
“public needs, national security and public health protection, development of
economically important sectors, or if a competent court determines that a method of the
exploitation of a patented invention by its owner or licensee is anti-competitive”
Luxemburg Law of 20 July 1992 on
Patents, Art. 63
Government Public interest “public interest”. They are also called ex-officio licences, which are delivered by the
Government where the invention has been declared by decree of public interest.
Malta Art. 39 of the Patents and
Designs Act (Cap. 417 of
the Laws of Malta)
Minister responsible for the
protection of industrial property
National security “where the national security or public safety so requires, even without the agreement of
the proprietor of the patent or the patent application”
Netherlands Patents Act of 15
December 1994 (Dutch
Patent Act), Art. 57(1)
Minister of Economic Affairs Public interest “public interest”
Art. 59 Dutch Patent N/A National defence “national defence”
192
EPO(2018), p. 75.
94
Act193
Poland Act of 30 June 2000 on
Industrial
Property, Art. 82(1)
Patent Office National emergency “to prevent or eliminate the state of national emergency, in particular in the field of
defence, public order, the protection of human life and health, as well as the protection
of the natural environment”
Act of 30 June 2000 on
Industrial
Property,
Patent Office Public interests “to prevent or remove a threat to important state interests, in particular public safety
and order”
Portugal194
Industrial
Property Code in Arts.
107 to 112.
Government Public interest “public interest”
Romania Arts. 43(4) of the
Romanian Law No.
64/1991 on patents
(Romanian Patents Act)
Bucharest Tribunal National emergency “a) in national emergency cases;
b) in other cases of extreme emergency;
c) in cases of public use for non-commercial purposes.”
Slovakia Slovak
Patent Act, Sec. 27
District Court Banská Bystrica Public interest “in case of threat to an important public interest”
Slovenia Art. 125(1) Industrial
Property Act (ZIL-1-
UPB3) (amended up
to 6 December 2013).
District Court of Ljubljana Public interest or
national security
“where the public interest is concerned, in particular if national security, nutrition,
health or the development of other vital sectors of the national economy so requires”
Spain Patents Act (Ley
24/2015), Art. 95(2)
Patent and Trademarks Office
(OEPM) (by request of the
Government)
Public interest “public interest”, meaning:
(a) the initiation, increase or generalisation of the exploitation of the invention, or the
improvement of the conditions under which such exploitation takes place, are of major
importance for public health or national defence.
(b) The non-exploitation or the inadequacy in quality or quantity of the exploitation
carried out is seriously detrimental to the economic or technological development of
the country.
c) The needs of national supply.
Sweden195
Section 47 of the Swedish
Patents Act No. 837 of
1967 as
amended.
Patent and Market Court Public interest “public interest of utmost importance requiring a compulsory licence to be granted to
someone who intends to exploit the invention commercially”
193
EPO(2018), p. 85.
194
EPO(2018), p. 97.
195
EPO(2018), p. 103.
95
Table 20: Institutions competent to grant compulsory licences across Member States
Ministry/
Governme
nt
Patent
Office/
IPO
Court Agency Competiti
on
Authority
Other # of Auth.
competent
to grant
CL
Austria X X 2
Belgium* X X196
2
Bulgaria X X 2
Croatia X 1
Cyprus X X 2
Denmark X 1
Estonia X X 2
Finland X 1
France X X 2
Germany X X 2
Greece* X X 2
Hungary X X 2
Ireland X 1
Italy* X X X X 4
Lithuania* X X 2
Luxembourg* X X 2
Malta X 1
Netherlands X X 2
Poland X 1
Romania X 1
Slovakia X 1
Slovenia X 1
Spain X X 2
Sweden X 1
TOTAL 13 9 14 1 2 1 40
Source: CEIPI (2023), pp 32-33
Note: Results exclude Latvia and Portugal. *= In times of crisis, the usual authority for applying for/granting
compulsory licences is different. From Questionnaire Responses, Member States responses on question 18.
196
Minister + Committee on CL or Minister + Advisory Committee (on Bioethics): “The Advisory Committee on Bio-
ethics is an intergovernmental committee established by the national and regional governments to inform the public
and the authorities about bio-ethical topics. The Committee is composed of lawyers, geneticists, ethicists, philosophers
and physicians from different organizations and representing a broad scale of ideological and philosophical beliefs.”
96
Table 21: Overview of divergences in scope, procedures and conditions
Member
State
Scope Procedures Conditions
Patent
Appl.197 SPC198 RDP
199
Trade
secrets/know-
how
Appeal Preliminary relief Embargos200
Criteria for remuneration
Austria No No No No
Yes
(Appeal to the Higher Regional Court of Vienna
and (in exceptional cases) to the Austrian Supreme
Court)
Uncertain
(The Austrian Patent Code
does not foresee the specific
possibility of a compulsory
licence by way of a
preliminary injunction but
provides for an expedited
decision before the Austrian
Patent Office, in case a
patented invention is needed
in the public interest)
Yes
(Four years after
application date or three
years after grant date if
the patented invention is
not exploited to an
appropriate extent).
Yes
Appropriate remuneration
determined by the
Austrian PO considering
the economic value of the
licence (section 37.1
Patent Code).
Belgium No No No No
Yes
(Administrative appeal for annulment of the
decision can be introduced before the Council of
State)
No
Yes
(Four years from the
filing date of the patent
application or three
years from the grant
date of the patent in
case there is a lack of
exploitation)
Yes
Adequate remuneration to
the patentee, taking the
economic value of the
licence into account.
197
CEIPI(2023): The CL legislation of many Member States does not explicitly refer to the possibility for a CL to cover published patent applications. There are different views among
the national experts consulted on how to interpret the absence of reference to published patent applications. In some Member States national experts consider that requests for a CL can
cover published patent applications, e.g., in Croatia, Greece, Romania and Spain even though the law is unclear.
198
CEIPI(2023): While it was reported that SPCs are covered by CL legislation in some MS, e.g., in Croatia, Czech Republic, Estonia, Greece, Hungary, Lithuania, Romania and
Slovakia, it was reported that in several other MS CLs cannot cover SPCs on the basis of literal interpretation (because SPCs are not explicitly mentioned in the CL provisions). In the
absence of cases, explicit mention in the law (e.g., Section 70 d of the Finnish PA and Art. 100(5) of the Spanish PA) or in authoritative official documents of interpretative value (e.g.,
Memorandum (MvT) for the legislative bill of 19 April 2021, amending the Netherlands Patents Act 1995, p. 2, clarifying the application of CLs to SPCs and paediatric extensions of
SPCs).
199
Regulatory Data Protection.
200
Some MS have national laws that provide a certain period during which a CL cannot be requested.
97
Bulgaria No No No
No
(However, Art. 9
Trade Secret
Law states:
“The
acquisition, use
or disclosure of
a trade secret
shall not be
considered
unlawful in the
following cases
[...] for the
protection of an
interest
recognized by
the law of the
European Union
or by the
Bulgarian
legislation.”)
Yes
The BPO decision may be appealed within three
months of its announcement to the parties before
the Sofia City Administrative Court. The decision of
the Sofia City Administrative Court is subject to
cassation before the Supreme Administrative
Court, whose decision is final. The Sofia City
Administrative Court and the Supreme
Administrative Court may return the case back to
the BPO for a new decision on the merits based on
the court’s explicit instructions on the application of
the law.
_ _
Yes
(The invention has not
been exploited for a
period of four years from
the date of filing of the
patent application or
three years from the
grant of the patent)
Yes
Art. 32(10) provides that
the compulsory licensee
shall owe the patent owner
a remuneration but does
not provide as to who
determines it.
Croatia Yes Yes No No
Yes
The decisions of the court issued in the procedures
for the grant of a compulsory licence may be
appealed in accordance with the rules laid down in
the Act on Civil Proceedings. The High
Commercial Court has jurisdiction on appeal.
_ _
Yes
(Lack of exploitation:
after the expiration of a
period of four years from
the filing date of a patent
application, or after the
expiration of three years
from the date the patent
was granted)
Yes
Taking into account the
economic value of the
authorisation and need to
correct anti-competitive
practice (Art. 69(5) PA).
Cyprus No No No No
Yes
The Registrar’s decision may be referred to the
Administrative Court for review and the decision of
the Administrative Court may be appealed before
the Supreme Court panel of three Supreme Court
judges.
_ _
Yes
(Any time after the
expiration of four years
from the date of the
grant of a patent – Art.
49 Patent Laws)
Yes
Reasonable remuneration
according to the nature of
the invention and the
economic value of the
authorisation.
Czech
Republic
No Yes No No
Yes
The decision on grant or rejection of the
compulsory licence may be appealed within one
month to the President of the Office. The appellate
decision may be subject to administrative review
_ _
Yes
(In case of an
insufficient use of the
invention, a compulsory
licence cannot be
Yes
The grant of a compulsory
license shall not affect the
right of the proprietor of
the patent for the
98
relating to all factual and legal aspects before the
Prague City Court. The judgment of the Prague
City Court may be challenged in a cassation
complaint with the Czech Supreme Administrative
Court.
granted before four
years from patent
application filing date or
three years from the
grant)
compensation of the value
of the license. If the value
of the license is not
agreed by concerned
parties it shall be
determined, upon request,
by the court, taking into
account the importance of
the invention and the
value of the license
contracts in the relevant
technical field (Section
20.7).
Denmark No No No No
Yes
Decisions delivered by the Maritime and
Commercial High Court or the district court can be
appealed to the Eastern or Western High Court, or
the Supreme Court (Danish Administration of
Justice Act, Sections 368(1) and (4)). According to
Section 368(4) of the Danish Administration of
Justice Act, a decision delivered by the High
Courts or the Maritime and Commercial High Court
may be appealed to the Supreme Court if the
outcome of the case is of fundamental legal
importance and of general importance to the
application and development of the law or has
significant societal implications in general, or
where there are other special reasons why the
case should be heard before the Supreme Court.
Uncertain201
Yes
(In case the invention is
not exercised, three
years of the grant of the
patent or four years from
the filing of the patent
application)
Yes
The Maritime and
Commercial Court shall
decide as the court of first
instance whether a
compulsory licence shall
be granted and shall also
determine the extent to
which the invention may
be exploited, fix the
compensation and lay
down the other terms of
the compulsory licence
(Section 50).
Estonia No Yes No No
Yes
The court decision granting or refusing a
compulsory licence for an invention may be
_ _
Yes
(Lack of use of the
invention within three
A court shall determine the
terms and conditions of
the compulsory licence,
201
The rules allow the Maritime and Commercial High Court or the district court to order a compulsory licence as a preliminary measure. On the other hand, it may be argued that the
competence to grant compulsory licences lies only with the Maritime and Commercial High Court in cases on the merits, according to Section 50 of the Patents Act. Whether that
would prevent the same court from granting a compulsory licence as a preliminary measure is unclear. If a potential compulsory licence can be granted as a preliminary measure, it
would probably at least require that the person requesting the compulsory licence had negotiated with the patentee to obtain a licence by agreement first, according to Section 49 of the
Patents Act.
99
appealed first to the circuit court and further to the
Supreme Court.
years from the
publication of the notice
concerning the grant of
the patent or within four
years from the filing of
the patent application)
including the extent and
duration of the use of the
invention and the amount
and procedure for
payment of the licence fee
(Art. 47.3).
Finland Yes202
Uncertain
(Section
70d of the
Finnish PA
could
argue for
the
extension
to SPCs)
No No
Yes
Under Section 7(4) of the Market Court
Proceedings Act (100/2013), a party may appeal
by submitting a written petition of appeal to the
Supreme Court. Any appeal to the Supreme Court
is subject to a leave to appeal. The period for filing
a request for an appeal is 60 days from the day of
the Market Court’s initial adjudication.
Uncertain
(Possible according to the
law wording, uncertain in
practice)
Yes
(If three years have
elapsed since the grant
of the patent and four
years have elapsed from
the filing of the
application and the
invention is not worked
or brought into use to a
reasonable extent in
Finland – section 45 PA)
Compulsory licences shall
be granted by a court of
law, which shall also
decide the extent to which
the invention may be
exploited and shall
determine the
remuneration to be paid
and any other conditions
under the licence (Section
50).
France
Yes
Art. L613-
19 French
Intellectual
Property
Code (CPI)
No No No
Yes
Decisions may be appealed following the regular
civil appeal procedures (i.e. within one month).
Decisions of the ministry in charge of industrial
property may be appealed pursuant to the relevant
public law provisions.
Uncertain
(The law does not foresee it.
There is no case law to
date)
Yes
(Lack of exploitation:
three years following the
grant of the patent, or
four years following the
publication of the
application)
Yes
According to special
conditions, which might be
determined by a tribunal
(Art. L613-12).
Germany
No
(CL
expressly
only
permissible
after the
patent has
been
Yes
(CL
extends
also to a
SPC, it
may also
be applied
for and
No No
Yes
The decision of the Federal Patent Court may be
appealed before the FCJ (Bundesgerichtshof).
Yes
(Section 85 Patent Code)
No
Yes
Equitable remuneration
considering the economic
value of compulsory
licensing.
202
According to Section 48 Finnish PA, it is possible for a third party to obtain a CL for the exploitation of an invention where the third party at the time of public disclosure of the
patent application documents was exploiting the invention for which the patent has been applied, on the condition that the application leads to the grant of a patent and that there are
special reasons for granting the CL and that the third party was not aware or could not have been aware of the patent application. The CL can also extend to a time period preceding the
grant of the patent.
100
granted) granted in
isolation
only for
the SPC)
Greece Yes Yes No No
Yes
The decision can be appealed before the Court of
Appeal, whose decision can be further appealed
before the Supreme Court. In the case of a
compulsory licence granted by the State, the
decision may be appealed before the Supreme
Administrative Court.
No
Yes
(Three years from grant
or four years from filing
of a patent have passed)
Yes
Established by the
competent court and
accompanied by an
opinion of the IP office
regarding, amongst
others, the terms of the
compensation and the
amount, which are
determined in accordance
with the extent of the
industrial exploitation of
the protected invention.
(Article 13.5 and 13.6).
Hungary No Yes No No
Yes
CL for public health grounds:
The decision of the HIPO may be subject to judicial
review before the Metropolitan Court. The decision
of the Metropolitan Court may be appealed before
the Metropolitan Court of Appeal, and the decision
of the Metropolitan Court of Appeal is subject to
judicial review before the Curia (Hungarian
Supreme Court).
Yes203
(There is no court practice
relating to the preconditions
and its scope)
Yes
(Lack of exploitation:
four years from the date
of filing of the patent
application or within
three years from the
grant of the patent)
Yes
The patentee shall receive
adequate compensation
for the compulsory license,
which shall be fixed, failing
agreement between the
parties, by the court. The
compensation shall take
into adequate account the
economic value of the
compulsory license. In
particular, it shall be
commensurate with the
royalty the holder of the
compulsory license would
203
Given the principle that a preliminary injunction can be requested in all civil litigation, including the lawsuit for granting a compulsory licence based on dependency and lack of
genuine use, seeking provisional relief seems to be theoretically possible (other types of compulsory licence belong to the competence of the HIPO and thus are not civil lawsuits).
Special provisions of the PA regarding preliminary injunctions (presumptions, factors to be considered) relate only to infringement disputes, and therefore a provisional injunction
sought in the context of a compulsory licence would be governed by the general provisions of the Code of Civil Procedure (Act CXXX of 2016).
101
have paid on the basis of
an exploitation contract
concluded with the
patentee, taking into
account the licensing
conditions in the technical
field of the invention
(Article 33.3).
Ireland
Yes
(Section
76(1) Irish
PA)
No No No
Yes
A decision of the Controller can also be appealed
to the High Court. The decision of the High Court
can be further appealed to the Court of Appeal on
a point of law. If the 63 IE matter is of general
public importance or the interests of justice require
it, an appeal shall lie to the Supreme Court.
Uncertain
(The Irish courts have not, to
date, granted a compulsory
licence by way of preliminary
relief)
No
Yes
Adequate remuneration,
considering the economic
value of the licence.
Italy No
Uncertain
(Law
refers
explicitly
to patents
only,
coverage
of SPC is
a matter of
legal
interpretati
on))
No No
Yes
The decision is taken by the UIBM (IPO), which is
a branch of the Ministry of Productive Activities.
Hence, it can be appealed as an administrative
procedure before the Lazio Regional
Administrative Court (T.A.R. Lazio).
Yes
(An IP civil court may issue
an order equivalent to a
compulsory licence but there
is no precedent for this.
Such an order may be also
applied via a preliminary
measure in order to skip the
length of the UIBM
procedure.)
Yes
(Four years after
application and three
years after grant if lack
of effective exploitation
by the patent owner).
Yes
Adequate remuneration,
determined considering
the economic value
of the authorization (Art.
70bis.2).
Latvia No No No No
Yes
Since the decision to grant a compulsory licence is
taken by an administrative court of first instance, it
may be appealed to the Administrative Court of
Appeal. The rulings of the latter, in turn, may be
appealed to the Supreme Court of Latvia.
_ _
Yes
(if a patented invention
has not been used in
Latvia or has been used
to an insufficient degree
within four years from
the date of application or
three years from the
date on which the grant
of a patent was
published)
Yes
Determined by the court,
observing the economic
value of the licence, the
extent of use of an
invention and other
circumstances (Section
54.9).
Lithuania No Yes No
No
(However, the
Yes
All final decisions of a competent court or authority
_ _ No
Yes
Fair remuneration, taking
102
laws of the
Republic of
Lithuania may
establish
obligation to
trade secret
holder to
disclose
information
constituting
trade secret for
reasons of
public interest to
court,
government, or
public
administration
institution and
(or) body.)
described in the above may be appealed to a Court
of Appeal of Lithuania.
into consideration
economic value of the
invention (Art. 39.2).
Luxembourg No No No No
Yes
Before the Luxembourg Court of Appeal.
_ _
Yes
(Lack of exploitation:
three years from the
grant of a patent or four
years from the filing date
of the patent application)
Yes
Adequate remuneration,
considering the economic
value of the licence.
Malta
Yes
(Art. 40
Maltese
Patent and
Designs
Act)
No No No
Yes
For compulsory licences granted in the public
interest the decision may be appealed to the
relevant court of first instance indicated herein and,
even if the Act is silent on this issue, in terms of
general laws of procedure a further appeal from
judgment thereof is possible by application filed
before the Court of Appeal.
The act is silence for the other situations of
compulsory licensing.
_ _
Yes
(Expiration of a period of
four years from the date
of filing the application
for the patent or three
years from the grant of
the patent)
Yes
“Equitable remuneration”
for a sworn application
filed by any person who
proves his ability to work
the patented invention in
Malta. Determined by the
Court.
“Appropriate
remuneration” for:
Sworn application filed by
the owner of the patent.
Application filed by a
breeder.
Application filed by the
holder of a patent
concerning a
103
biotechnological invention
who cannot exploit it
without infringing a prior
plant variety right.
National security or public
safety.
Netherlands No Yes No
No
(The
Netherlands
Trade Secrets
Act do not
contain any
provisions on
forced access to
know-how.
However, the
Act leave open
the possibility of
such a statutory
forced access
regulation.)
Yes
After a decision by the Minister about a compulsory
licence in the public interest, both parties (applicant
and patentee) may lodge an objection,21 which is
a complaint sent to the Minister himself to re-
evaluate his previous decision. The term to submit
an objection is six weeks.22 After the decision on
objection, an appeal can be lodged to the
administrative chamber of the District Court of The
Hague.23 A final appeal may be lodged to the
Council of State (Raad van State). Both the
objection and the appeal have suspensive effect,
unless the decision of the Minister provides
otherwise on grounds of urgency.
No
Yes
(Three years of lack of
use before a CL can be
requested).
Yes
In case of national
defence, the Minister who
is directly concerned shall
determine, by agreement
with the patent holder, the
fee to be paid to the patent
holder by the State (Art.
59).
Poland No No No No
Yes
Parties to the proceedings are entitled to lodge a
complaint with the Voivodeship Administrative
Court in Warsaw. A decision rendered by the
Voivodeship Administrative Court can be appealed
before the Supreme Administrative Court.
No No
Yes
Determined proportion to
the market value of the
license, of the royalty and
the manner and time limits
of payment (Art. 84.2).
Portugal No No No No
Yes
The decision to grant or not grant a compulsory
licence can be appealed to the Intellectual Property
Court. The expert panel’s decision on the terms
and compensation of the compulsory licence may
also be appealed to the Intellectual Property Court.
No
(The law does not
contemplate the possibility
of obtaining a compulsory
licence by way of a
preliminary injunction.)
Yes
(Lack of exploitation:
four years of the filing
date or three years of
the grant date)
Yes
Adequate remuneration,
taking into account the
economic value of the
licence (Art. 108.6).
Romania Yes Yes No No
Yes
The decision may be appealed to the Bucharest
Court of Appeal.
No
(There is neither case law
nor special statutory
provisions relating to the
possibility of obtaining a
compulsory licence within a
preliminary injunction
Yes
(If the invention has not
been used or has not
been sufficiently used,
four years from the filing
date of the patent
application or a period of
Yes
Determined by the
Bucharest Tribunal in
relation to the commercial
value of the licences
granted.
104
procedure.) three years after the
grant of the patent)
Slovakia No Yes No No
Decisions of the Court are subject to full judicial
review with respect to all legal and factual aspects
of the decision. The first instance decision of the
Court, whether grant of the compulsory licence or
rejection of an application, may be appealed within
fifteen days to the Regional Court Banská Bystrica.
_ _
Yes
(Lack of use: four-year
period from the patent
application filing date or
three-year period from
the date of grant)
Adequate compensation
as well as terms of
payment shall be
determined by a court on
proposal of one of parties
to licence agreement
taking into consideration
the importance of an
invention and usual
licence prices in a
particular field.
Slovenia No No No No
Yes
The decision may be appealed to the Court of
Appeal of Ljubljana (Art. 31 Non-Contentious Civil
Procedure Act, Official Gazette of SRS, No. 30/86
as amended).
_ _ No
Mandatory compensation,
determined with regard to
the circumstances of each
case, while taking into
account the economic
value of the compulsory
licence (Art. 127.2).
Spain Yes Yes
No
No
(But the parties
must act in
good faith. For
the patentee
this means inter
alia that it must
disclose to the
licensee the
know-how in its
possession that
is necessary for
an adequate
exploitation of
the invention -
article 100.4 of
the Spanish
Patent Act.)
Yes
The decision reached by the OEPM is appealable
at an administrative level (i.e. to be resolved within
the OEPM) and subsequently before the
contentious-administrative courts, first to the
Tribunal Superior de Justicia, then to the
Contentious-Administrative Chamber of the
Tribunal Supremo. The appeal will be heard by the
Tribunal Supremo only if it deems the case to have
a cassational interest for the formation of case law.
Uncertain
(Not expressly, but the
provisional measures that
both courts and
administrative bodies may
adopt under general
procedural law constitute an
open list, and therefore in
cases of urgency it might be
theoretically possible.)
Yes
(Failure to exploit or
insufficient exploitation
of the patented invention
for more than four years
after the filing of the
patent application, or
three years after the
publication of the
mention of grant)
Yes
Based on the economic
importance of the
invention.
Sweden No No No No Uncertain Yes Yes
105
Yes
An appeal to the Patent and Market Court of
Appeal is subject to the grant of leave to appeal. A
further appeal to the Supreme Court is then subject
to a double requirement for leave to appeal (i.e.
first from the Patent and Market Court of Appeal
and subsequently from the Supreme Court).
(No explicit provisions and
has not been done in
practice. It is conceivable
that the court would consider
arguments concerning the
right to a compulsory licence
in deciding whether to grant
preliminary injunctive relief
against a defendant.)
(Lack of exploitation:
three years have passed
from the grant of the
patent and four years
from the date of filing of
the patent application)
Established by the Court.
106
The table below gives an overview on existing and upcoming Emergency Instruments and Responses in the EU, based on Annex 9 of the impact
assessment on SMEI204
and complemented by an evaluation of the relevance of these instruments for the initiative on compulsory licensing for crisis
management, marked as: highly relevant, relevant, less relevant.
Table 22: Detailed mapping of existing and upcoming Emergency Instruments and Responses
Emergency instrument/
measure
Status Responsible
DGs/bodies
Relevance for CL Comment
Integrated Political Crisis
Response (IPCR)
Mechanism
Council Implementing
Decision; Existing
mechanism
Council Highly relevant The activation decision (full activation mode) of the Presidency can trigger the CL
granting process under Option 3 and 4.
European Alliance
Against Coronavirus
Ad-hoc group GROW Relevant As a platform for collaboration (among others matchmaking events) the initiative aims
at fostering voluntary solutions and therefore avoiding a CL.
EU Rapid Alert Function Ad-hoc solution
Regulations
GROW Relevant The initiative aims at detecting disruptions in supply chains.
EU Rapid Alert system
Function
Existing mechanism:
European Union Rapid
Information System
(Safety Gate/RAPEX)
DG JUST Less relevant The initiative is about an alert system for dangerous goods.
EU Vaccines Strategy and
Joint Vaccine
Procurement
Communication SANTE Highly relevant The initiative refers to the public health emergency recognized under the European
Health Union (see below).
European Health Union
(first key initiative :
Serious Cross-Border
Threats to Health
Regulation)
Regulation (EU)
2022/2371
SANTE Highly relevant Recognition of public health emergency by COM Implementing Act can trigger the
CL granting process under Options 3 and 4.
HERA and the Emergency
Framework Regulation
(EU) 2022/2372
Commission DG
established on 16
September 2021 with
Commission Decision
HERA Highly relevant The Council Regulation on a framework of measures for ensuring the supply of crisis-
relevant medical countermeasures in the event of a public health emergency at Union
level, which should have been recognised under the serious cross-border threats to
health regulation (see above), provides the framework for HERA’s proposed crisis
204
COMMISSION STAFF WORKING DOCUMENT Impact Assessment Report Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL for a Single Market Emergency Instrument Brussels, 19.9.2022 SWD(2022) 289 final, Register of Commission Documents - SWD(2022)289 (europa.eu)
107
C(2021) 6712
-Regulation
mode and enables the Union to take necessary measures for sufficient and timely
availability and supply of crisis-relevant medical countermeasures in case of future
public health emergencies. As the objective of the regulation is to establish a
framework of measures for ensuring the supply of crisis relevant medical counter-
measures in the event of a public health emergency at Union level, a CL could give
bargaining power when negotiating voluntary agreements, hence facilitating
conclusions of voluntary agreements. CL could also serve as a last resort instrument
for the supply of the Union with crisis relevant goods, in case voluntary solutions fail.
Emergency Assistance on
Cross-Border Cooperation
in Healthcare
Communication DG Health
and Food
Safety
Highly relevant The initiative refers to the public health emergency recognized under the European
Health Union (see above).
COVAX Facility and
Vaccine Sharing
Mechanism
Global initiative TRADE/
INTPA
Highly relevant A CL allows as a last resort instrument access to IP protected products, if there are
suitable production capacities.
Task Force for Industrial
Scale-up of COVID-19
Vaccines
Ad hoc Task Force GROW Relevant The initiative aims at avoiding the need of a CL (e.g. by promoting voluntary
partnerships etc.)
Coronavirus Response in
Relation to Personal
Protective Equipment
Commission
Recommendation (13
March 2020)
accompanied by
guidance, followed by
the introduction of
temporary measures
adjusting the PPE
export authorisation
scheme for 30 days
GROW Relevant The initiative aims at speeding up the production of critical products in times of crisis.
Extra-EU Export
Authorisation Mechanism
of Covid-19 Vaccines and
their Active Substances
Commission
Regulation
SANTE/
TRADE
Relevant A CL can also, under certain circumstances, secure the continuous supply with crisis
relevant products.
Joint Procurements for
Medicinal Counter
Measures
Legislative Proposal SANTE Highly relevant The initiative refers to the public health emergency recognized under the European
Health Union (see above).
A New European
Pandemic Information
Proposal announced in
the Lessons Learnt
SANTE/
ECDC
Less relevant The initiative already takes effect at a very early stage (No crisis yet, only early signals
of potential threats). At this stage, a CL is not to be considered (last resort instrument).
108
Gathering System & New
European Chief
Epidemiologist &
European Health Data
Space
Communication
A Framework for the
Activation of an EU
Pandemic State of
Emergency
Proposal announced in
the Lessons Learnt
Communication
Relevant The initiative aims among others at supporting the manufacturing of essential counter-
measures in times of crisis.
Short-term EU Health
Preparedness for COVID-
19 Outbreaks
Communication Relevant The initiative aims at ensuring free movement of essential critical supplies in the EU
and concluding agreements with vaccine producers.
Union Civil Protection
Mechanism (UCPM)
Based on a number of
legal acts, including
Decision 1313/2013,
as amended by
Regulation 2021/836
ECHO Highly relevant In the event of a disaster within the Union a patent protected technology could be
needed. A CL could help in case voluntary solutions fail
RescEU See above ECHO Highly relevant The initiative refers to the UCPM (see above).
Humanitarian Air Bridge See above ECHO Less relevant The initiative provides for a transport service.
European Civil Protection
Pool (ECPP)
See above ECHO Highly relevant The initiative refers to the UCPM (see above)
EU Solidarity Corps Regulation Less relevant The initiative aims at promoting solidarity and visibility of humanitarian aid among
Union citizens
The Seveso Directive
Technological Disaster
Risk Reduction
Directive ENV Highly relevant In the event of a major accident within the Union a patent protected technology could
be needed. A CL could help in case voluntary solutions fail.
Proposal for a Directive to
Enhance the Resilience of
Critical Entities Providing
Essential Services in the
EU
Proposal for a
Directive
HOME Less relevant The initiative is about critical entities rather than critical products.
Emergency Support
Instrument
Financial instrument
(set up by Council
Regulation 2016/369
and activated by a
separate Council
BUDG Highly relevant Council decision activating the Emergency Support can trigger the CL granting
process under Options 3 and 4.
109
Regulation)
Repair and Prepare for the
Next Generation
Communication Less relevant The initiative is a recovery instrument embedded in a long-term EU budget.
The Single Market
Emergency Instrument
(SMEI)
Legislative Proposal GROW Highly relevant The declaration of the Single Market Emergency Mode can trigger the CL granting
Process under Options 3 and 4.
Border Management
Measures to Protect
Health and Ensure
Availability of Goods
Guidelines Relevant The initiative aims at addressing disruptions to the delivery of goods.
‘Green Lanes’ System and
the Forthcoming Transport
Mobility Contingency
Plan
Communication and a
planned
Communication
MOVE Relevant A CL could be considered (as a last resort instrument) where a certain patent protected
technology is needed to overcome the disruption in the EU transport and mobility
system.
COVID-19 Clearing
House for Medical
Equipment (CCH)
Ad hoc group SG Relevant The Clearing House Serves among others as a platform for dialogue and information
sharing between Member States and h industry. Its Matchmaking Platform aims at
facilitating voluntary solutions. With this objective the initiative aims at avoiding the
need for a CL.
Council Recommendation
on Coordinated Approach
to the Restriction of Free
Movement
Council
Recommendation
JUST
HOME
Less relevant The initiative is about the free movement of persons in times of crisis.
Free Movement of
Workers, Posted Workers,
Service Providers
Communications EMPL Less relevant The initiative is about the free movement of workers in times of crisis.
Schengen Strategy and
Foreseen Revision of
Schengen Border Code as
Regards Border Closures
Communication;
planned proposal for a
regulation and changes
in Practical Handbook
for Border Guards
HOME Less relevant The initiative is about introducing internal border controls in times of crisis.
Guidance on Free
Movement of Health
Professionals and
Minimum Harmonisation
of Training in Relation to
COVID- 19 Emergency
Communication GROW Less relevant The initiative focuses on the allocation of skilled persons (health care workers) rather
than the supply with products.
110
Measures
Temporary Restriction on
Non-essential Travel in
the EU
Communications Less relevant The initiative is about travel restrictions in times of crisis.
Re-open EU Web portal GROW/
JRC
Less relevant The initiative focuses on providing information to EU citizens.
EU Digital COVID
Certificate
Regulation JUST/
CNECT
Less relevant The initiative focuses on persons rather than products.
EU Passenger Locator
Form
Commission
Implementing
Decision
Less relevant The initiative focuses on persons (tracing) rather than products
National Contact Tracing
Apps
National actions &
Recommendation &
Implementing
Decision
Less relevant The initiative focuses on persons (tracing) rather than products. Relevant at most if a
particular app or the software is behind the app is patent protected and access is
needed.
Treatment of Third
Country Nationals at the
External Borders
Regulation Less relevant The Initiative focuses on persons rather than products.
Contingency Plan for
Ensuring Food Supply and
Food Security
Communication AGRI/
MARE/
SANTE
Highly relevant The declaration of a food crisis affecting more than one Member State could trigger
the CL granting process under Options 3 and 4.
A patent protected technology might be needed in times of a food crisis. A CL could
be the last resort instrument.
Common Market
Organisation Regulation
(EU) No 1308/2013
Regulation AGRI Less relevant The initiative is about market disturbance (significant price rises or falls).
Regulation (EU)
2021/2115 (CAP Strategic
Plans)
Regulation AGRI Less relevant The initiative lays down rules on general and specific objectives to be pursued through
financial Union support.
Market observatories AGRI Less relevant The initiative provides different sectors with more transparency by means of
disseminating market data and short-term analysis in a timely manner.
Agricultural civil dialogue
groups
AGRI Less relevant The initiative is a stakeholder consultation tool.
Fighting Disinformation -
Communications, Action
Plan and Code of Practice
In particular: Joint
Communication
accompanied by
actions
Less relevant The initiative lacks a triggering mechanism in times of crisis.
111
Data Act Act CNECT/ G1 Less relevant The initiative aims at creating a Single Market for data.
Cyber-security Directive Less relevant However, it does not seem impossible that a CL could be needed in this context to gain
access to a critical information and communication technology that could help fight
cyber-attacks.
Chips Act Act Highly relevant The activation of the crisis stage (semi- conductor crisis) by COM through an
Implementing Act can trigger the CL granting process under Options 3 and 4.
Security of Energy Supply Regulation ENERGY Highly relevant The declaration of a Union emergency by COM can trigger the CL granting process
under Options 3 and 4.
Critical Raw Materials
Resilience
Communication Relevant The initiative is about improving the supply chain resilience. A CL could become
relevant in case certain patent protected technologies or procedures for the
reprocessing of goods are needed.
Copernicus Programme &
Galileo Programme
Regulations Less relevant Nevertheless, it is conceivable that a CL is needed in case a patent protected
technology is required.
Single Market
Enforcement Task Force
for Compliance with
Single Market Rules
(SMET)
Communication Relevant Products produced under a CL also face restrictions/ barriers in the Single Market
(lack of EU- wide exhaustion)
Defence and Security
Work Contracts
Directive Less relevant The initiative is about (incompatible) procurement requirements in times of crisis
(deadlines imposed by the usual award procedures).
Crisis Management and
Resilience Acquis in the
Financial Services Area
Regulations and
Directives
Less relevant The initiative aims at the free movement of capital.
EXEMPLARY CRISIS DEFINITION
As far as the crisis definition used in other initiatives is concerned, an overview of the most pertinent ones is provided below:
Table 23: The definition of crisis in other existing and upcoming Emergency Instruments and Responses – selected examples
Instrument Crisis definition
Integrated Political
Crisis Response (IPCR)
Mechanism
Article 3(a)*: “‘Crisis’ means a situation of such a wide-ranging impact or political significance, that it requires timely policy coordination and
response at Union political level”.
2 Cumulative Elements:
1) Wide-ranging impact or political significance
+
112
2) Requirement of timely policy coordination & response at Union level
*Council Implementing Decision (EU) 2018/1993 of 11 December 2018 on the EU Integrated Political Crisis Response Arrangements L 320/28]
European Health Union Public health emergency: Article 2(1)(e)*: in order for the Regulation to apply, the threats need to fall under the categories of serious cross-border
threats to health set out in (a) – (d): threats of biological/ chemical/ environmental/ climate/ unknown origin.
*REGULATION (EU) 2022/2371 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 November 2022 on serious cross-
border threats to health and repealing Decision No 1082/2013/EU
HERA and the
Emergency Framework
Regulation (EU)
2022/2372
Public health emergency: Article 2(2)*: “‘Public health emergency’ means a public health emergency at Union level recognised by the
Commission in accordance with Article 23 of Regulation (EU) No…/…[the SCBTH Regulation”, i.e. Regulation (EU) No …/… of the European
Parliament and of the Council of … on serious cross-border threats to health and repealing Decision No 1082/2013/EU].
“Europe needs to be better prepared to anticipate and address jointly the ongoing and increasing risks, not only of pandemics but also of man-made
threats such as bioterrorism.”**
*REGULATION (EU) 2022/2371 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 November 2022 on serious cross-
border threats to health and repealing Decision No 1082/2013/EU
**Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions – Building a European Health Union: Reinforcing the EU’s resilience for cross-border health threats
Union Civil Protection
Mechanism (UCPM)
Disaster:
Article 4(1)*: "'Disaster' means any situation which has or may have a severe impact on people, the environment, or property, including cultural
heritage".
Scope/Triggering of civil protection mechanisms by – Article 1(2)*: “The protection to be ensured by the Union Mechanism shall cover primarily
people, but also the environment and property, including cultural heritage, against all kinds of natural and man-made disasters, including the
consequences of acts of terrorism, technological, radiological or environmental disasters, marine pollution, hydrogeological instability and acute
health emergencies, occurring inside or outside the Union. In the case of the consequences of acts of terrorism or radiological disasters, the Union
Mechanism may cover only preparedness and response actions.”
*Decision No 1313/2013/EU of the European Parliament and of the Council of 17 December 2013 on a Union Civil Protection Mechanism, latest
amendment by Regulation (EU) 2021/836 of the European Parliament and of the Council of 20 May 2021
The Seveso Directive
Technological Disaster
Risk Reduction
Major accident:
Article 3(13)*: “‘major accident’ means an occurrence such as a major emission, fire, or explosion resulting from uncontrolled developments in
the course of the operation of any establishment covered by this Directive, and leading to serious danger to human health or the environment,
immediate or delayed, inside or outside the establishment, and involving one or more dangerous substances”
113
3 Cumulative Elements:
1) Major emission, fire, or explosion resulting from uncontrolled developments in the course of the operation of an establishment
+
2) Leading to serious danger to human health or the environment
+
3) Involving one or more dangerous substances
*Directive 2012/18/EU of the European Parliament and of the Council of 4 July 2012 on the control of major- accident hazards involving
dangerous substances, amending and subsequently repealing Council Directive 96/82/EC
Emergency Support
Instrument
Ongoing or potential natural or man-made disaster:
Article 1(1)*: Measures have to be “appropriate to the economic situation in the event of an ongoing or potential natural or man-made disaster.
Such emergency support can only be provided where the exceptional scale and impact of the disaster is such that it gives rises to severe wide-
ranging humanitarian consequences in one or more Member States and only in exceptional circumstances where no other instrument available to
Member States and to the Union is sufficient.”
3 Cumulative Elements:
1) An ongoing or potential natural or man-made disaster”
+
2) Exceptional scale and impact of the disaster is such that it gives rises to severe wide-ranging humanitarian consequences in one or
more Member States
+
3) No other instrument available to Member States and to the Union is sufficient.
*Council Regulation (EU) 2016/369 of 15 March 2016 on the provision of emergency support within the Union as amended by Council
Regulation (EU) 2020/521 of 14 April 2020 activating the emergency support under Regulation (EU) 2016/369, and amending its provisions
taking into account the COVID-19 outbreak
SMEI ‘Crisis’ Article 3 (1)*: means an exceptional unexpected and sudden, natural or man-made event of extraordinary nature and scale that takes place
inside or outside of the Union.
In principle SMEI provides for a two-stage mechanism:
1. Single Market vigilance mode means a framework for addressing a threat of significant disruption of the supply of goods and services of
strategic importance and which has the potential to escalate into a Single Market emergency within the next six months (Article 3 (2)*).
2. The Single Market emergency means a wide-ranging impact of a crisis on the Single Market that severely disrupts the free movement on
the Single Market or the functioning of the supply chains that are indispensable in the maintenance of vital societal or economic activities in the
Single Market (Article 3 (3)*).
114
*Proposal for a Regulation of the European Parliament and the Council establishing a Single Market emergency instrument and repealing Council
Regulation No (EC) 2679/98
Chips Act Article 18* Activation of the crisis stage
A semiconductor crisis shall be considered to occur when there are serious disruptions in the supply of semiconductors leading to significant
shortages, which:
entail significant delays or significant negative effects on one or more important economic sectors in the Union, or
prevent the supply, repair and maintenance of essential products used by critical sectors.
*Proposal for a Regulation establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act)
Note: based on COMMISSION STAFF WORKING DOCUMENT Impact Assessment Report Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
for a Single Market Emergency Instrument Brussels, 19.9.2022 SWD(2022) 289 final, Register of Commission Documents - SWD(2022)289 (europa.eu)
Table 24: The triggering and de-triggering of crisis instrument in other existing and/or upcoming Emergency Instruments and Responses – selected examples
Instrument Triggering and De-triggering
Integrated Political
Crisis Response (IPCR)
Mechanism
Two Modes:
(Article 2(1)(2),(b)):*
 Information sharing mode (pre-stage) to establish the situation & prepare for possible full activation
 Full activation mode to prepare response measures
Activation:
(Article 4):*
 Article4(1)*: Presidency takes IPCR activation decision (initiative by Member States possible)
 Article 4(2)*: Triggering upon invocation of solidarity clause (Article 222 TFEU) – still formal adoption by Presidency
 Article 4(5)*: “The decision to activate the IPCR in information sharing mode may also be taken by agreement of the GSC, the
Commission services and the EEAS, in consultation with the Presidency”
Switching between modes:
 Article 4(6)*: the Presidency may decide at any point to escalate or de-escalate the operation from one mode of activation to the other
(exception: solidarity clause invocation requires full mode)
Deactivation:
(Article 5):*
 Decision taken by Presidency after consultation with Member States, Commission and the HR (no deactivation when solidarity clause is
115
invoked)
*Council Implementing Decision (EU) 2018/1993 of 11 December 2018 on the EU Integrated Political Crisis Response Arrangements L 320/28]
European Health Union Recognition of emergency situations:
Article 23(1):* “The Commission may, based on the expert opinion of the Advisory Committee referred to in Article 24, formally recognise a
public health emergency at Union level; including pandemic situations where the serious cross-border threat to health in question endangers public
health at the Union level.”
Two Cumulative Elements for recognition:
1) Serious cross-border threat to health
2) Endangerment of public health at Union level
 Prior liaising with the WHO (Article 23(3)*)
 Adoption by means of implementing acts
 Examination procedure in Article 27(2)*
 Exception (Article 23(4), subpara. 3*): for cases where this is duly justified on imperative grounds of urgency related to the severity of a
serious cross-border threat to health or due to the rapidity of its spread among Member States – more expeditious procedure: immediately
applicable implementing acts to recognise a public health emergency
 “The new rules will enable the activation of EU emergency response mechanisms, in close coordination with the World Health
Organization (WHO), without making it contingent upon the WHO’s own declaration of a Public Health Emergency of International
Concern (PHEIC).” (cf. No. 3, p. 7**)
 Enabling effect of measures following the recognition (Article 25*) (recitals 18, 19*)
Termination:
 Article 23(2)*: termination as soon as one of the applicable conditions is no longer met.
* REGULATION (EU) 2022/2371 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 November 2022 on serious cross-
border threats to health and repealing Decision No 1082/2013/EU
**Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions – Building a European Health Union: Reinforcing the EU’s resilience for cross-border health threats
HERA Activation:
 Recognition of a public health emergency required (cf. Article 2(2)*)
 Article 3(1): upon proposal of the Commission, the Council “may adopt a regulation activating the emergency framework where
appropriate to the economic situation.”
 Article 3(3)*: Duration of the activation is limited to 6 months, but renewable (Article 4* procedure)
116
 Funding: Activation of emergency funding, Article 13*: “Where this measure is activated, emergency support under Regulation (EU)
2016/369 is activated to finance expenditure necessary to address the public health emergency […]” “In the event of a public health
emergency at Union level, in order to ensure the necessary flexibility and rapidity in implementation, the Council could also trigger
financing through the Emergency Support Instrument (ESI), demonstrated in the past to be both flexible and fast. During the COVID-19
crisis, the ESI27 proved efficient and effective in ensuring rapid and flexible funding, essential in times of urgency” (p. 13, No. 6.3**)
 “The Council activation of the emergency framework will also specify which of the […] emergency measures, appropriate to the
economic situation, should be implemented” (p. 9, No. 4)**
 Two phases: "preparedness phase" and "crisis phase". In the “crisis phase”, HERA will be able to draw on stronger powers for swift
decision-making and implementation of emergency measures. (p. 2, No. 2**)
* REGULATION (EU) 2022/2371 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 November 2022 on serious cross-
border threats to health and repealing Decision No 1082/2013/EU
**Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social
Committee and the Committee of the Regions – Introducing HERA, the European Health Emergency preparedness and Response Authority, the
next step towards completing the European Health Union
The Single Market
Emergency Instrument
(SMEI)
In principle, SMEI provides for a two-stage mechanism:
1) Single Market vigilance mode addressing a threat of significant disruption of the supply of goods and services of strategic importance and which
has the potential to escalate into a Single Market emergency within the next six months
 Activation (Article 9*): It is activated by a Commission implementing act taking into consideration the opinion of the Advisory Group
(composed of one representative per Member State).
 Extension and deactivation (Article 10*): The Commission, if it considers that the reasons for activating the vigilance mode remain valid,
and taking into consideration the opinion provided by the advisory group, may extend the vigilance mode for a maximum duration of six
months by means of an implementing act (Art. 10 (1)*). Where the Commission, taking into consideration the opinion provided by the
advisory group, finds that the threat is no longer present, it shall deactivate the vigilance mode in full or in part by means of an
implementing act (Article 10 (2)*).
2) The Single Market emergency mode
 Activation (Article 14*): It shall be activated by means of a Council implementing act upon the Commission’s proposal taking into
consideration the opinion of the Advisory Group.
 Extension and deactivation (Article 15*): Where the Commission considers, taking into consideration the opinion provided by the
advisory group, that an extension of the Single Market emergency is necessary, it may propose to the Council to extend the Single Market
emergency no later than 30 days before the expiry of the period for which the Single Market emergency has been activated (Article 15
(1)*). Where the Commission, taking into consideration the opinion provided by the advisory group, considers that the criteria for
activation of Single Market emergency are no longer fulfilled, it shall propose to the Council the deactivation of the Single Market
emergency (Article 15 (2)*).
117
*Proposal for a Regulation of the European Parliament and the Council establishing a Single Market emergency instrument and repealing Council
Regulation No (EC) 2679/98
Chips Act Article 18* Activation of the crisis stage:
 Article 18(2)* “Where an assessment of the Commission provides concrete, serious, and reliable evidence of a semiconductor crisis, the
Commission may activate the crisis stage by means of implementing acts in accordance with Article 33(2)*. The duration of the activation
shall be specified in the implementing act. (…)”
 Article 18(3)* “Before the expiry of the duration for which the crisis stage was activated, the Commission shall, after consulting the
European Semiconductor Board, assess whether the activation of the crisis stage should be prolonged. Where the assessment concludes
that a prolongation is appropriate, the Commission may prolong the activation by means of implementing acts. The duration of the
prolongation shall be specified in the implementing acts adopted in accordance with Article 33(2)*. (…)”
*Proposal for a Regulation establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips Act)
Note: based on COMMISSION STAFF WORKING DOCUMENT Impact Assessment Report Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
for a Single Market Emergency Instrument Brussels, 19.9.2022 SWD(2022) 289 final, Register of Commission Documents - SWD(2022)289 (europa.eu)
118
Compulsory licensing during COVID crisis
COVID-related compulsory licencing in the world:
 Hungary: HIPO CL for Gilead’s remdesivir;
 Israel: CL granted for Iopinavir/ritonavir (Kaletra) produced by Abbvie;
 Russia: CL granted by the government for the Eurasian patents (ЕА025252, ЕА025311, ЕА029712, ЕА020659, ЕА032239 and ЕА028742) Gilead
for remdesivir.
Source: CEIPI(2023), p.126.
Examples of compulsory licences
Table 25: Identified case law on compulsory licences
Member
State / EU
Year Domain /
product
Outcome Duration
until CL
granting
Further information The parties Source
Austria 1972 Medicine /
Inderal,
propranolol
hydrochloride
Issued and
cancelled
in review
procedure
Ca. 2 years
and 8
months
Application made on grounds of no sufficient exploitation of the
patent.
The CL was granted in first instance, but the appeal of the patentee
against this decision was successful before the Supreme Court, and
the application was dismissed.
The question at issue was whether the import of a product
manufactured abroad using a patented process in Austria was or was
not an “exploitation of the invention in Austria”. While the first
instance did not accept such importation as an exploitation of the
invention in Austria and therefore granted a CL, the board of appeals
approached the issue from a different perspective and argued that
under the circumstances, it was unreasonable to demand from the
patentee to exploit the patent in Austria and reversed the first
instance’s decision so that the CL was denied.
Remarkably, this case and further CJEU case law (C-235/89, C-
30/90, C-191/90) finally led to the provision being amended.
Claimant:
Austrian
company
Arcana KG
Dr. G. Hurka
Defendant:
British
company
Imperial
Chemical
Industries Ltd
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 10-11
Belgium 2022 EP2160038B2 Appeal With respect to Télé-Secours, the Court considered that Tunstall’s Claimant:
119
method for
Tone
Signalling
pending – – behaviour was abusive because the patented system became
necessary to Télé-Secours’ activities over the years. This system was
the safest way to connect the hardware sold by Tunstall to the Télé-
Secours call center. If Télé-Secours could not use the patented
system with third parties’ software, it would be forced to stay with
Tunstall. The Court therefore considered that Tunstall’s refusal to
license was an abuse of the economic dependency of Télé-Secours.
With respect to Victrix the Court also considered that Tunstall’s
refusal to license was abusive. This license was necessary for Victrix
to compete on the Belgian market and the refusal was discriminatory
because Tunstall already licensed its technology to other major
actors of the telecare market.
The Brussels court ordered Tunstall to grant a non-exclusive license
to Télé-Secours and to Victrix for the remaining duration of the
patent and for the Belgian territory. The the license fee should be
equal to the average price paid by the other licensees taking into
consideration the remaining duration of the patent. The parties have
three months to conclude a license agreement. It also ordered
Tunstall to furnish all information needed to use the protocols it
developed based on its patented telecommunication system.
Tunstall (UK)
Defendants :
Victris SL
(Spain) & Téle-
Secourts
(Belgium)
Bulgaria – – – – – – – – No CL procedures were issued in Bulgaria (at least since 1993, the
year the current Bulgarian Law of Patents and Utility Models
Registration was first adopted).
– – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 18
Croatia – – – – – – – – There have been no cases concerning CL in Croatia. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 56
Cyprus – – – – – – – – There has been only one case in recent years, which related to
licensing of a medication for a genetic condition ordered by the
Council of Ministers under Art. 55 Cypriot Patents Law, Law 16(I)
– – “Compulsory
Licensing in
Europe: A
120
of 1998, as amended (1998 to 2006), but there is no reported decision
as the issue was not contested.
Country-by-
Country
Overview” (EPO,
2018), p. 25
Czech
Republic
2000 No available
information
Not issued – – The application for a CL was rejected, because the patentee proved
that it sufficiently works the invention through licensees in the Czech
Republic.
Claimant:
Czech company
EXIMPO
Defendant:
Philips
Electronics,
N.V.
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 28
Denmark 1943 Medicine /
Isopropylantip
yrin
Issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent.
The Supreme Court confirmed a CL for production of a medicine
during the Second World War as the product was not exploited in
Denmark.
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 34
1966 Medicine /
Phenylbutazon
e
Issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent.
The Danish Patents Commission granted a CL (today, only the courts
have such competence) to a defendant due to the fact that the patent
had not been sufficiently exploited in Denmark considering the
demand for it and without there being any legitimate reasons for it.
The decision was confirmed by the Maritime and Commercial Court
and subsequently by the Supreme Court.
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 34
1972 Military /
Delaying
mechanism,
which is part
of the catapult
seat
Issued No
available
information
The Danish Ministry of
Defence had imported SAAB Draken fighter planes that had
catapult seats. An English company had a patent to a
delaying mechanism that was part of the catapult seat. The
Danish Ministry of Defence and SAAB were awarded a
compulsory licence for said delaying mechanism.
Claimant:
Danish Ministry
of
Defence and
SAAB
Defendant: no
available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 34
121
Estonia – – – – – – – – There have been no cases concerning CL in Estonia. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 36
Finland 1979 Medicine Not issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent and of public interest.
The District Court concluded that also subjective reasons, such as
market-related and economic reasons presented by the defendant in
the case, could constitute a legitimate ground for non-exploitation of
a patent within the meaning of Section 45 Finnish Patents Act
(550/1967). As the demand for the drug was sufficiently satisfied
through import and production in Finland, and was available at a
reasonable price, also no such public interest as set forth in Section
47 existed. The decision was later confirmed by the Court of
Appeals, and further appealed to the Supreme Court. The parties
settled before the Supreme Court was able to render its decision.
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 42
France 1983 Motor vehicle
safety /
Coupling head
intended to air
brake systems
on motor
vehicles
Issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent.
A CL was granted to the alleged infringer because the patent owner
did not exploit the patent in France (the patent was however
exploited in Germany).
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 45
1997 Industrial
production of
meat /
Machine for
the automatic
production of
skewers
Issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent.
The defendant was the owner of a patent on a machine for the
automatic production of skewers, which the defendant was not
exploiting. For this reason, the Court of Appeal granted a licence on
the patent to the claimant, a company commercialising a machine for
the automatic production of skewers.
Claimant:
NIJAL
Defendant:
EMSENS
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 45
2003 No available Not issued – – The requested CL was not granted because the patent had expired. No available “Compulsory
122
information information Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 44
Germany 1995 Medicine /
Interferon
gamma
(rheumatoid
arthritis)
Issued and
cancelled
in review
procedure
– – The requested CL was not granted because the patent had expired. Confidential WHO/WIPO/WT
O (2020), p. 240
2016 Medicine /
Raltegravir
(HIV/AIDS)
Issued Ca. 2 years
and 2
months
(including
the
negotiation
phase)
Preliminary CL granted to a pharmaceutical company involved in an
injunction procedure with another pharmaceutical company. The
patent was eventually invalidated.
Applicant:
Shionogi
Defendant:
Merck Sharp &
Dohme
WHO/WIPO/WT
O (2020), p. 240
2018 Medicine /
alirocumab
(cholesterol-
lowering
treatment)
Not issued – – The requested CL was not granted because the patent had expired. Confidential WHO/WIPO/WT
O (2020), p. 240
Greece – – – – – – – – There have been no cases concerning CL in Greece. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 54
Hungary No
avail
able
infor
ma-
tion
Medicine /
active
ingredient for
reducing blood
pressure
Not issued
in the first
instance,
but
decision
annulled at
second
No
available
information
Application made on grounds of dependency of patents.
The specificity of the present case is that a process patent was
compared with a product patent.
The court of first instance rejected to grant a CL and established that
the plaintiff had failed to provide an appropriate basis of comparison,
since it is not enough to prove that the dependent patent represents an
important technical advance of considerable economic significance;
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 59
123
instance it should also be demonstrated that this progress exists in respect of
the earlier patent.
At second instance, the Metropolitan Appeal Court annulled the
decision of the Metropolitan Court and ordered the first instance
court to reopen the case. The Metropolitan Appeal Court established
that in terms of “significant technical progress” a comparison
between the product and process patents was also possible.
The decision of the Metropolitan Appeal Court was not challenged
by the Curia (Supreme Court) because the basic patent’s term had
expired.
Ireland 1966 Industry /
Sealing head
used for
securing metal
caps to bottles
and jars so as
to create an
air-tight seal
Not issued – – Application made on grounds of abuse of monopoly rights.
The Irish Supreme Court held that even though there was a void
restrictive clause in an agreement, this did not necessarily mean that
demand was not being met on reasonable terms. However, this case
was decided under legislation that has now been repealed.
Claimant:
Thomas Hunter
Ltd.
Defendant:
James Fox &
Company Ltd.
and B. & J.
Metal Caps Ltd.
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 63
Italy 2005 Medicine /
imipenem-
cilastatin
(antibiotic)
SPC
Issued At least ca.
1 year and
10 months
CL granted as remedy to anti-competitive behaviour. Claimant:
Competition
and Market
Authority
Defendant
(Rightholder):
Merk & Co.
WHO/WIPO/WT
O (2020), p. 240
2007 Medicine /
finasteride
(prostetic
hyperplasia)
SPC
Issued No
available
information
CL granted as remedy to anti-competitive behaviour and to allow
parallel export to neighbouring markets with expired patent
protection.
Claimant:
Competition
and Market
Authority
Defendant
(Rightholder):
Merk & Co.
WHO/WIPO/WT
O (2020), p. 240
Latvia – – – – – – – – According to the information provided by the Latvian Patent Office
(www.lrpv.gov.lv/en), no CL have been granted or registered in
– – “Compulsory
Licensing in
124
Latvia. Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 76
Lithuania – – – – – – – – There have been no cases concerning CL in Lithuania. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 72
Luxembo
urg
– – – – – – – – There are no published cases concerning CL in Luxembourg. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 74
Malta – – – – – – – – There are no published cases concerning CL in Malta. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 83
Netherlan
ds
1986 Protected plant
variety of
tulips
Not Issued – – CL to plant variety rights. Claimant:
Pennings
Defendant:
Schoorl
Case nr. BIE
1987.18,
Chairman of the
District Court of
Haarlem;
Pennings vs
Schoorl,
16.07.1986
Poland – – – – – – – – On the basis of the currently applicable legislation, no proceedings
concerning CL have been recorded.
– – “Compulsory
Licensing in
Europe: A
125
Country-by-
Country
Overview” (EPO,
2018), p. 96
Portugal – – – – – – – – There is no available information concerning cases involving CL in
Portugal.
– – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 98
Romania – – – – – – – – There have been no cases concerning CL in Romania. – – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 100
Slovakia – – – – – – – – Based on information provided by the Industrial Property Office of
the Slovak Republic, there is no record that a CL application was
ever filed in Slovakia.
– – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 108
Slovenia – – – – – – – – There is no available information concerning cases involving CL in
Slovenia.
– – “Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 106
Spain 2001 Medical /
Carboxyalkyl
dipeptide
derivatives
(anti-
Not issued – – The OEPM closed the compulsory licence proceedings
because the parties settled. The patentee appealed the OEPM’s
decision but the Court of Appeals and later the Supreme Court
dismissed the appeal and confirmed the OEPM’s decision. Since a
licence agreement between the parties was reached, it was no longer
Claimant:
Merck & Co.
Inc.
Defendant:
“Compulsory
Licensing in
Europe: A
Country-by-
Country
126
hypertensives) a compulsory licence (subject to the contentious administrative
courts) but a contractual licence (subject to the civil courts) and
therefore the contentious administrative jurisdiction could not rule in
relation to its validity.
Inke, S.A. Overview” (EPO,
2018), p. 39
2003 Medical Not issued – – Application made on grounds of no sufficient exploitation of the
patent.
A pharmaceutical company had requested a CL over a patent that
was considered to be unexploited in Spain. The OEPM refused to
grant the licence and Madrid’s
High Court of Justice revoked the OEPM decision based on formal
reasons, namely the fact that the OEPM had not respected the
established procedure for granting CL. However, the patentee
appealed before the Supreme Court, which reinstated the original
OEPM decision, denying the compulsory licence on the grounds that
a compulsory licence cannot be granted in a situation when the
substantive requirements are not met. In this case it was concluded
that the patent was being exploited in Belgium, and therefore this
exploitation in an EU member state was considered sufficient in view
of the rulings of the Court of Justice of the European Union in the
cases C-60/1990 and C-235/1989.
Claimant:
Astur-Pharma
S.A.
Defendant:
Leo
Pharmaceu-
tical Ltd. A/S
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 39
2015 Medicine /
Sofosbuvir
(hepatitis C)
Not Issued – – The Supreme Court ruled that granting of CL in cases of public
interest is at the discretion of the government, and not an obligation
imposed by the law.
Claimant: group
of patients
suffering from
hepatitis C.
Defendant:
Minister of
Health
WHO/WIPO/WT
O (2020), p. 240
Sweden 1937 Military Issued No
available
information
Application made on grounds of no sufficient exploitation of the
patent.
The case was regarding the possibility to avoid a CL by starting to
exploit or expanding the exploitation of the patent in Sweden after
the filing of an action for a CL (where the answer was negative).
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 104
1945 No available
information
Issued No
available
Application made on grounds of no sufficient exploitation of the
patent.
No available
information
“Compulsory
Licensing in
127
information
The case was regarding the existence of a valid reason for not
exploiting the invention in Sweden where importing from Germany
was not considered sufficient.
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 104
1947 No available
information
Not issued – – Application made on grounds of no sufficient exploitation of the
patent.
The patented products were manufactured in Sweden and the fact
that raw material was imported was not considered relevant.
No available
information
“Compulsory
Licensing in
Europe: A
Country-by-
Country
Overview” (EPO,
2018), p. 104
UK (pre-
Brexit)
2015 Medicine / T-
DM1 (breast
cancer)
Not Issued – – CL requested by patient group following plans to remove T-DM1
from list of cancer treatments paid for by UK Government
(Kmietowicz, 2015a). Price discount negotiated.
Rightholder:
Roche
Request made
to: UK
Government
Request made
by: The
coalition for
affordable T-
DM1
WHO/WIPO/WT
O (2020), p. 241
2019 Medicine /
lumacaftor-
ivacaftor
(cystic
fibrosis)
Not Issued – – A Crown Use licence was requested by a patient group.261 The UK
Government considered issuing a Crown Use licence (a type of
government-use licence) after a pricing deal had not been reached
with the originator following three years of negotiations
(McConaghie, 2019). A few months after the government announced
that it was considering a Crown Use licence, a confidential pricing
deal was agreed (Parsons, 2019).
Request made
for: NHS
Engmand
Rightholder:
Vertex
Request made
by: Just
Treatment
WHO/WIPO/WT
O (2020), p. 241
2001 Protected plant
variety of
potato
Not Issued – – Dutch seed breeder Meijer owns the UK plant breeders’ rights in
‘Lady Rosetta’, a potato variety popularly used in crisp manufacture,
with MBM acting as its exclusive agent in the UK. Sacker applied
unsuccessfully for compulsory exploitation rights in the protected
variety, arguing that Meijer’s refusal to issue a licence was
unreasonable, and that the rights’ holder was failing to satisfy
demand in the UK market.
Defendant:
Meijer BV &
MBM Produce
Limited
C: Sacker
Potatos Ltd
UK Controller of
Plant Variety
Rights, UK Plant
Variety Rights
Office and Seeds
Division of
DEFRA; Sacker
128
Potatos Ltd vs C
Meijer BV &
MBM Produce
Limited,
31.10.2001
EU 2018 Protected plant
variety of
blackcurrant /
“Ben Starav”
Not issued Application made on public interest grounds. Claimant:
Pixley Berries
(Juice) Limited
Defendant:
Lucozade
Ribena Suntory
Limited
CPVO Decision
NCL001,
28.03.2018
129
Fair compensation and adequate remuneration of right holders
The TRIPS Agreement explicitly provides that the right holder shall be paid an adequate
remuneration, to be determined depending on the circumstances of the case and taking as
one criterion – but not the only one – the economic value of the authorisation. Different
practices exist across countries and there is no single accepted approach to determine the
adequate remuneration. Methods of calculation are sometimes applied to decide on the
adequate level of remuneration. This is for instance the case as regards Regulation (EC)
No 816/2006, which provides that in case of national emergency or other circumstances
of extreme urgency or in cases of public non-commercial use, the remuneration shall be a
maximum of 4% of the price paid by the importing country. By comparison, licensing
fees in the pharmaceutical industry amount to approximately 4-5% of the patented item
(which is deemed one of the higher licensing rates among all industries).
This initiative would provide pre-defined rules to ensure a smooth and quick procedure
while providing legal certainty to right holders. To that end, it would rely on a calculation
method similarly to what exists in Regulation (EC) No 816/2006 (i.e. maximum 4/6% of
the price of the generic product). However, as required under the TRIPS Agreement, the
initiative would also include other criteria considering the circumstances of the case that
could influence the percentage. These criteria would include the subsidies or other
contributions that the right holder has received to develop the invention, the degree to
which development costs have been amortized and the humanitarian circumstances
relating to the issue of the licence. Based on these criteria, the advisory body would
propose a percentage in its recommendation based on which either the Commission (in
PO4) or the Member State (in PO3) would determine the remuneration. In addition, an
appeal procedure is foreseen in the context of which the remuneration should be
reviewed, including upon request of the right holder.
130
Table 26: Share of respondents to the public consultation, per main category, agreeing to a compulsory licence on
patents and patent applications
Source: OPC, total number of replies N=74
Table 27: Share of respondents to the public consultation, per main category, agreeing to a compulsory licence on
SPCs
Source: OPC, total number of replies N=74
Table 28: Share of respondents to the public consultation, per main category, agreeing to a compulsory licence on
RDP
Source: OPC, total number of replies N=74
Table 29: Share of respondents to the public consultation, per main category agreeing to a compulsory licence on
know-how
Source: OPC, total number of replies N=74
Table 30: Share of respondents to the public consultation, per main category, agreeing to a compulsory licence for
cross-border uses
Source: OPC¸ total number of replies N=74
Company - Business association/ organisation 20%, N= 8
NGOs 100%, N= 6
Public authorities 75%, N= 3
Academic/ research institution 100%, N= 5
Company - Business association/ organisation 55%, N= 22
NGOs 100%, N= 6
Public authorities 75%, N= 3
Academic/ research institution 80%, N= 4
Company - Business association/ organisation 2.5%, N= 1
NGOs 100%, N= 6
Public authorities 75%, N= 3
Academic/ research institution 80%, N= 4
Company - Business association/ organisation 5%, N= 2
NGOs 100%, N= 6
Public authorities 50%, N= 2
Academic/ research institution 80%, N= 4
Manufacturing across several
EU countries
Export to another country
All 46%, N= 34 45%, N= 33
Company - Business association/
organisation
12.5%, N= 5 10%, N= 4
NGOs 100%, N= 6 100%, N= 6
Public authorities 75%, N= 3 75%, N= 3
Academic/ research institution 80%, N= 4 100%, N= 5
131
Figure 19: Detailed scheme describing the procedural steps foreseen under Option 2
132
Figure 20: Detailed scheme describing the procedural steps foreseen under Option 3
Figure 21: Detailed scheme describing the procedural steps foreseen under Option 3 (export)
Note: AC – advisory committee, COM – the Commission, MS – Member State.
133
Figure 22: Detailed scheme describing the procedural steps foreseen under Option 4
Figure 23: Detailed scheme describing the procedural steps foreseen under Option 4 (export)
Note: AC – advisory committee, COM – the Commission, MS – Member State.
134
Figure 24: Typology of impact considered in this impact assessment
Source: own elaborations
135
ANNEX 7: SUPPLEMENTARY LEGAL ANALYSIS: THE PRINCIPLE
OF EXHAUSTION IN THE SINGLE MARKET
1. The principle of EU-wide exhaustion in general
EU rules on exhaustion are largely the result of the jurisprudence of the Court of Justice
of the European Union interpreting Article 34 TFEU on measures having equivalent
effect to quantitative restrictions between Member States. The Court of Justice has
always interpreted the Treaty as meaning that rights conferred by IP rights are exhausted
within the Single Market by virtue of putting the relevant goods on the market (by the
right holder or with his/her consent) in the European Union. See for instance cases: e.g.
Centrafarm and Adriaan de Peijper v Sterling Drug Inc (C-15/74), Merck and Co Inc. vs
Stephar BV and Petrus Stephanus Exler (C-187/80).
Under EU law, once a good protected by an intellectual property right has been put
lawfully on the market within the European Union (i.e. by the right holder or with his or
her consent), the rights conferred by that intellectual property right in relation to the
commercial exploitation of the good become exhausted. In that case, the right holder can
no longer invoke the intellectual property right in question to prevent the further resale,
rental, lending or other forms of commercial exploitation of the good by third parties.
In contrast, once a good protected by an intellectual property right has been put on the
market within the EU by a person other than the right holder and without his or her
consent, that right holder may inter alia oppose to the import by third parties of such
good into the European Union or to the putting, resale or otherwise commercial
exploitation of such good into the European Union market in so far as such import or
commercial exploitation would constitute an infringement of the intellectual property
right concerned.
2. The principle of exhaustion as regards patents
In principle, EU secondary law in relation to patents (including rules on supplementary
protection certificates extending the protection of patents for pharmaceutical and plant
protection products) do not include specific rules on exhaustion, but the general
principles affirmed by the jurisprudence of the Court of Justice apply.
Otherwise, “if a patent proprietor could preclude the importation of protected products
marketed in another Member State by him or with his consent, he would be able to
partition the national markets and thus restrict trade between the Member States,
although such a restriction is not necessary to protect the substance of his exclusive
rights under the parallel patents.” See for instance case: Pharmon v Hoechst (C-19/84).
In this spirit also REGULATION (EU) No 1257/2012 OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL of 17 December 2012 implementing
enhanced cooperation in the area of the creation of unitary patent protection states that in
accordance with the case-law of the Court of Justice of the European Union, the principle
of the exhaustion of rights should also be applied to European patents with unitary effect.
Therefore, rights conferred by a European patent with unitary effect should not extend to
acts concerning the product covered by that patent which are carried out within the
participating Member States in which that patent has unitary effect after that product has
been placed on the market in the Union by, or with the consent of, the patent proprietor,
136
unless there are legitimate grounds for the patent proprietor to oppose further
commercialisation of the product (Article 6 and recital 12).
3. Lack of exhaustion of patent rights on products manufactured under a
compulsory licence
The relationship between the principle of EU-wide exhaustion and compulsory licensing
was subject to the CJEU Judgement of 9 July 1985 (C-19/84, Pharmon v Hoechst). The
judgement was based on the following facts:
 Hoechst was the proprietor of a patent in Germany and of parallel patents in the
Netherlands and in the United Kingdom in respect of the same invention, namely a
process for manufacturing the medicine known as 'frusemide'.
 DDSA Pharmaceuticals Ltd, a British company, obtained a compulsory license to
exploit the invention in respect of the parallel patent granted to Hoechst in the
United Kingdom.
 DDSA sold 'frusemide' tablets which it had produced under the compulsory license
to Pharmon, a pharmaceutical company in the Netherlands who intended to market
these pharmaceutical products in the Netherlands.
 Hoechst brought an action against Pharmon before the Dutch Courts for infringing
rights arising under Hoechst's Netherlands patent.
The CJEU, which had been asked by the Hoge Raad of the Netherlands to give a preliminary
ruling, made the following observations in its decision:
 First, the CJEU recalled that in accordance with the principle of the territoriality of
the acts of the public authorities of a Member State, a compulsory licence cannot
confer on its holder rights in the territories of the other Member States.
 Afterwards the CJEU clarified that the question is whether the principle of EU-wide
exhaustion applies where the product imported and offered for sale has been
manufactured in the exporting Member State by the holder of a compulsory licence
granted in respect of a parallel patent held by the proprietor of the patent in the
importing Member State. Briefly: Does EU-wide exhaustion apply to products
manufactured under a compulsory licence?
 The CJEU pointed out that where a compulsory licence is granted to a third party
which allows to carry out manufacturing and marketing operations which the patent
proprietor would normally have the right to prevent, the patent proprietor cannot be
deemed to have consented to the operation of that third party. Such a measure
deprives the patent proprietor of his right to determine freely the conditions under
which he markets his products.
 Finally, the CJEU stated that the substance of a patent right lies essentially in
according the inventor an exclusive right of first placing the product on the market
so as to allow him to obtain the reward for his creative effort. It is therefore
necessary to allow the patent proprietor to prevent the importation and marketing of
products manufactured under a compulsory licence in order to protect the substance
of his exclusive rights under his patent.
Thus, following this judgement, products manufactured under a national compulsory
licence (granted for the use of a national patent) in one Member State cannot be imported
137
in another Member State (where there is a parallel patent) without the consent of the
patent proprietor. When products are brought into circulation under a compulsory license
the principle of EU-wide exhaustion does not apply. As regards the import of the
protected products in another Member State, the patent proprietor is consequently
allowed to stop this marketing operation.
4. Consequences for cross-border supply in times of crisis
Under the current compulsory licensing regime in the Member States, based on national
law and domestic considerations, a Member State cannot consider the impact of a
compulsory licence granted in its jurisdiction on the situation in other Member States.
Nor can it make EU-wide arrangements when issuing a compulsory licence that would
aim at tackling a cross-border crisis (territoriality of national compulsory licensing
schemes). In this context, the lack of exhaustion of national patent rights on a product
made under a compulsory license is a crucial obstacle preventing an EU-wide approach
for addressing a crisis via a compulsory licence. There is no Single Market for products
produced under a compulsory licence.
The free movement of goods in the Single Market is one of the fundamental freedoms of
the Treaties (articles 34 and 35 TFEU). However, it is not applicable without restrictions.
They can be justified by the protection of industrial and commercial property (article 36
TFEU). In its jurisdiction the CJEU has aimed at balancing the different interests
involved by, on the one hand, allowing the free circulation of patented goods if the
marketing was done with the consent of the patent owner (EU-wide exhaustion), but
restricting the free circulation if this consent is missing, as in the case of a compulsory
license (no EU-wide exhaustion). Whereas the advantages of a Single Market might not
be needed when the crisis affects only one Member State that has the capacities to supply
itself with critical products under a national compulsory license, the lack of a Single
Market for such products and its effects become a significant barrier to cross-border
supply in times of an EU-wide crisis when some Member States depend on the capacities
of others.
If a product that is important for solving an EU-wide crises can be manufactured in one
Member State under a compulsory licence, that compulsory licence would not allow the
supply in another Member State. Multiple compulsory licences would need to be
requested in all importing Member States. These additional compulsory licences in the
importing Member States would be necessary to prevent the patent holder from
exercising his patent rights to stop the goods from being imported (still exercisable due to
the lack of exhaustion). Apart from the fact that requiring multiple national compulsory
licenses is a high hurdle for cross-border supply within the EU Single Market, this also
bears the risk of contradicting decisions (for instance diverging in content) due to the
current legal fragmentation of national compulsory licensing schemes.
138
ANNEX 8: SME TEST
This SME-test investigates the impacts of the preferred policy option on SMEs that
might be concerned by compulsory licencing issued to address a crisis.
The test has been conducted in line with the 4-steps foreseen, as following:
STEP-1: IDENTIFICATION OF AFFECTED BUSINESSES
As mentioned in Annex 3, the majority of EPO patent applications originating from
European countries were filed by large companies (75%), followed by SMEs and
individual inventors (20%), and 5% by universities and public research organisations
(see: Figure 11). The 2022 IP SME Scoreboard collected data among 8.372 SMEs in all
27 EU Member States. Only 10 % of these SMEs reported that they own registered IP
rights, such as patents. Among those SMEs owning a registered IP right, national
trademarks are the most commonly owned registered type if IP right, owned by 6 % of
SMEs. This is followed by EU trademarks (EUTM) and patents (both owned by roughly
4 % of SMEs – 4.2 % EUTMs and 3.6 % patents). The least frequently owned registered
types of IP rights are breeder rights / plant variety rights (1 %) and registered Community
design (2 %). Thus, the number of patents owned by SMEs is in general low. However,
the initiative is considered relevant for SMEs as it targets patented products that are
needed for crisis management, regardless of the patent owner (be it a large company or a
SME). Since SMEs own patents, even if this applies to them to a small extent, it cannot
be ruled out that a SME-owned patent will be subject of a compulsory licence.
Nevertheless, as the initiative focuses on patents, only a very small part of the SMEs
could possibly be affected directly by compulsory licencing.
STEP-2: CONSULTATIONS OF SME STAKEHOLDERS
As far the OPC are concerned, the SMEs contributed, but they have not constituted the
majority of respondents (74 in total, out of which 18 companies/business organisations),
see Figure 25 below.
Figure 25: Number of respondents to the OPC by size-classes among companies
Source: OPC
Additionally, twenty two business associations contributed to the OPC, among which
many could have represented the views of smaller companies. Inputs received in the OPC
have not pointed out towards potential negative consequences towards SMEs. The same
concerned the feedback received following the Call for Evidence.
139
STEP-3: ASSESSMENT OF THE IMPACT ON SMES
Impacts that may materialise as a result of the preferred option (PO4) will mainly
concern the patent holders, but the number of SMEs that own IP rights in the EU is
relatively low (see above). Furthermore, apart from the fact that a compulsory licence is
an extreme event in terms of probability (last resort instrument that has been used very
rarely in the past), it can be assumed that small enterprises are more prone to enter into
voluntary agreements than larger firms, hence there could be no need to use the CL at all.
This is because the manufacturing capacities of an SME may be insufficient to satisfy
sudden increase in demand induced by crisis (e.g. carry-out large scale production to
serve several Member States), so they would be more willing to benefit from
remuneration from a licensing agreement. In other words, if during a major cross-border
crisis there is a need for access to critical goods covered by a patent held by an SME, the
probability that such circumstances would lead to CL negotiations is lower that if the
patent holder was a large company.
Yet, if a CL is nevertheless granted, the terms and conditions for an SME would be the
same as for a large company (i.e. the proposed rules would be identical, irrespective of
the patent holder size).
STEP-4: MINIMISING NEGATIVE IMPACTS ON SMES.
The preferred policy option (PO4) is not expected to have negative effects on SMEs.