European Union: European Commission Launches Public Consultation On Compulsory Licensing Of Patents

Following a call for evidence in April 2022, the European Commission launched a public consultation in July 2022 seeking to revise the framework on compulsory licensing of patents in the EU. The general objective being to create a less fragmented and better-suited compulsory licensing system for EU-wide crises of a health, environmental, nuclear or industrial nature. Nevertheless, the consultation recognises that any system should remain exceptional and a last resort measure, applicable where voluntary agreements are not implemented, and bearing in mind that compulsory licensing may have a significant impact on IP holders.

The European Commission is inviting responses from relevant stakeholders including all parts of the IP community (IP rights holders, users, lawyers and IP offices), and notably singles out the health sector (including generic manufacturers, start-ups and patient associations) and the EMA. The main areas for which the Commission invites contributions include:

The aim of the consultation is to collect views from all stakeholders in order to understand the different grounds and procedures available for issuing compulsory licensing in a crisis in EU member states, such as the COVID-19 pandemic, to identify bottlenecks and the impact on such system's stakeholders. The consultation will support the impact assessment on compulsory licensing.

Over the last couple of years, the complexity around the manufacturing and supply of vaccines to deal with the COVID-19 pandemic has manifested some of the challenges in the protection and exploitation of intellectual property rights, including the debate over whether a waiver of intellectual property rights is the solution to address world demand for COVID-19 vaccines. On 17 June 2022, at the 12^th WTO Ministerial Conference in Geneva (MC12), WTO members agreed to waive certain parts of the TRIPS Agreement to allow countries to authorise the use of patents related to the production and supply of the COVID-19 vaccines without the consent of the patent holder, but the countries must provide "adequate remuneration" to the patent holder.

Inventors and innovative industries have been disappointed by outcome of the MC12 meeting. The pharmaceutical industry, as represented by The European Federation of Pharmaceutical Industries and Associations (EFPIA), has criticised the decision as a backward step in the industry's collective ability to tackle the COVID-19 pandemic and future global health threats. EFPIA has further expressed its view that the decision "sends a dangerous signal not only to the pharmaceutical industry but to all innovative sectors. Dismantling the very framework that has brought solutions to tackle COVID-19 and facilitated the unprecedented number of partnerships, voluntary licensing, and knowledge-sharing taking place during this pandemic in record breaking time, can have ripple effects for the future".

Against this backdrop, the launch of the public consultation by the European Commission provides a useful forum for all interested parties to engage in dialogue and offer proposals with a view to achieving a more harmonised, predicable and workable regime on compulsory licensing. Even if EU harmonisation is achieved to some degree, any new regime will need to be compatible with TRIPS. In particular, under Article 31(b) of TRIPS, compulsory licensing is only available after an unsuccessful attempt on the part of the proposed user of IP rights to obtain authorisation from the rights holder on reasonable commercial terms, and within a reasonable period of time. Consequently, even in the case of a global health emergency, any request for a compulsory licence under a new harmonised regime will not be immediate.

The consultation will be open until 29 September 2022.