Last updated: 18 March 2024
See updates at the end of the post.
On 27 April 2023, the Commission proposed new rules to help companies, especially small and medium-sized companies (SMEs), make the most of their inventions, leverage new technologies and contribute to the EU’s competitiveness and technological sovereignty.
The proposed Regulations on compulsory licensing of patented inventions in crisis situations and the revision of the legislation on supplementary protection certificates will create a more transparent, effective and futureproof intellectual property rights framework.
Compulsory licensing of patented inventions in crisis situations
The Commission action plan on intellectual property rights has identified several areas of patent law that need to be further improved and harmonised. One of these areas is compulsory licensing.
- The COVID-19 crisis highlighted that an appropriate balance between patent rights and other rights and interests is a staple of the patent system.
- During the COVID-19 crisis, the conflicting interests were access to health products and preserving innovation incentives that are key to developing new health products, such as vaccines and therapeutics.
- The pandemic added another element to the discussion: the role intellectual property rights could and should play in a crisis. In other words, the question became: how we can preserve the balance and incentives for innovation while ensuring swift access to critical products and technologies in crises, even in the absence of voluntary agreements. Patent law already provides a solution: compulsory licensing.
What is a compulsory Licence?
A compulsory licence is the possibility for a government to allow a third party to use a patented invention without the authorisation of the rights-holder, subject to certain conditions. Compulsory licensing can therefore complement current EU efforts to improve its resilience to crises.
What is the role of compulsory licensing?
Compulsory licensing has a dual role, as it can:
- incentivise the conclusion of voluntary agreements and
- also enable the manufacturing of products needed to tackle a crisis in the absence of (appropriate) voluntary agreements.
However, for compulsory licensing to fulfil this role, an efficient compulsory licensing scheme needs to be built in the EU, able to rely on the Single Market, complementing EU crisis instruments and in line with the EU’s international obligations.
Current lack of EU-wide harmonisation of compulsory licensing for the domestic market
There is currently no EU-wide harmonisation of compulsory licensing for the domestic market, including as regards European patents with a unitary effect. Instead, there is a patchwork of different national rules and procedures on compulsory licensing.
- National rules have insufficient territorial reach, since products manufactured under a compulsory licence in one Member State either cannot be supplied to another Member State, or can only be supplied in limited quantities.
- National procedures are also different from each other, and decision making is not coordinated at EU level. This limits the ability to rely on the Internal Market to guarantee supplies across all the Union territory
What is the aim of this initiative?
This initiative aims to provide the Internal Market with an efficient compulsory licensing scheme for crisis management, with the following two main objectives:
- First, it aims to enable the EU to rely on compulsory licensing in the context of the EU crisis instruments.
- Second, it introduces an efficient compulsory licensing scheme, with appropriate features, to allow a swift and appropriate response to crises, with a functioning Internal Market, guaranteeing the supply and the free movement of crisis-critical products subject to compulsory licencing in the internal market
How does the initiative hope to achieve its objectives?
The new rules in the form of a Regulation foresee a new EU-wide compulsory licensing instrument that would complement other EU crisis instruments, such as the Single Market Emergency Instrument. In the aftermath of the COVID-19 crisis, these new rules further enhance the Union’s resilience to crises, by ensuring access to key patented products and technologies in crises, should voluntary agreements not be available or adequate.
Is there a Q&A available on compulsory licensing?
Yes there is. You can view it here.
Factsheet on compulsory licensing
There is a factsheet available on compulsory licensing. You can download it here.
Supplementary Protection Certificates
What is a supplementary Protection Certificate?
A supplementary protection certificate (SPC) is an IP right that extends a patent by up to five years for a pharmaceutical or plant protection product that has been authorised by regulatory authorities, thereby encouraging innovation and promoting growth and jobs in these sectors.
What is the problem with the currently available SPC Protection?
Currently, to obtain SPC protection in more than one Member States for a given product, it is necessary to file separate national applications, in the national languages of the respective Member States, with the risk of SPCs being granted in some Member States and denied in others. As a result, the current system suffers from fragmentation, which leads to complex and costly procedures, as well as legal uncertainty.
What does this initiative/reform introduce?
The proposed SPC reform includes the creation of a unitary SPC, complementing the unitary patent that will enter into force on 1 June 2023, allowing for a single patent that
covers all participating Member States in a unitary manner.
- The SPC reform also introduces a centralised examination procedure, implemented by EUIPO, in close cooperation with EU national IP offices.
- Once the proposed SPC reform is adopted, it will be possible to file a single, combined, application.
- This application will be subject to a single examination which, if positive, will result in the grant of a unitary SPC (for those 17 Member States participating in the unitary patent system at the moment) and of national SPCs in further Member States.
The unitary SPC will also incentivise innovators to use the unitary patent. In the absence of a unitary SPC, a unitary patent could be extended only by means of national SPCs, i.e. in a non-unitary manner, leading to greater administrative burden and costs. In addition, for all SPCs based on a European patent, infringements will be handled by the new Unified Patent Court (at least for the initially 17 participating Member States), provided that the applicable conditions are fulfilled.
Who will be able to use the new SPC centralised procedure?
The SPC centralised procedure will be accessible to any company, start-up, research organisation, innovator, etc. that holds a valid patent on a medicinal product or a plant protection product, and a corresponding marketing authorisation in the EU.
Applicants will be able to file a ‘combined application’ with a view to the grant of both a unitary SPC and national SPC for additional Member States not covered by the unitary patent.
What is/are the benefits of the reform/proposal for SMEs?
- The new proposal will significantly decrease the cost and burden of SPC protection in the EU, and increase transparency and legal certainty.
- It will also bring significant benefits for both, innovative SMEs and for SMEs that manufacture generics.
- By simplifying the SPC procedure, the reform reduces the current cost of application and renewal fees e.g. a five-year long, EU-wide SPC would cost 55% less than the baseline, producing savings of around €137 000 per applicant.
- The bulk of savings would result from the unitary SPC, as the SMEs would avoid paying high renewal fees annually in each of the 17 Member States of the unitary patent protection.
How will the new regime be implemented?
The new SPC rules proposed today are laid out in proposals for four Regulations:
- Two Regulations that introduce a centralised procedure for the grant of national SPCs, by recasting and repealing the existing EU regulations (one for medicinal products and the other for plant protection products), and
- Two completely new Regulations creating a new unitary SPC (with the same centralised examination procedure), one for medicinal products and one for plant protection products.
This makes a total of four regulations which rely on the same principles (in particular the same SPC eligibility criteria) and on the same centralised examination procedure.
Applicants will also be able to file a ‘combined application’ with a view to the grant of both a unitary SPC and national SPC for additional Member States not covered by the unitary patent.
The draft proposals for the four regulations can be viewed here.
What is the relationship between the revision of the pharmaceutical legislation and the new rules for Supplementary Protection Certificates?
Intellectual property (IP) rights, in particular patents and SPCs, protect innovative medicinal products and, together with the regulatory pharmaceutical protections (such as data protection), influence the moment when competing products (generics) can come on the market.
Incentivising innovation while ensuring access, availability and affordability of medicines are key considerations of both EU rules for pharmaceutical products and intellectual property.
The EU’s intellectual property system works in tandem with the EU system of regulatory pharmaceutical incentives (e.g. market protection, data protection), both contributing to the same objectives.
The parallel proposals on the pharmaceutical legislation include enhanced provisions on the Bolar exception (allowing generics to perform research and tests for preparing regulatory approval despite a patent/SPC being in force) to IP rights, that will facilitate the authorisation of generic medicines and thus speed up their availability.
Can a product be covered by both a national and a unitary SPC?
Yes it can, except that a given product cannot be protected by both a national SPC and a unitary SPC in the same Member State.
Any product that is covered by a patent and that is a (human or veterinary) medicinal product, or a plant protection product, and thus falls under the scope of the SPC regulations, can benefit from the new centralised procedure that will be implemented by the EUIPO.
The new SPC regulations foresee the possibility to apply for a “combined application” for the same product to obtain a unitary and national SPCs, for those cases where the product is protected by a European patent having unitary effect. Since a unitary SPC can only cover those (initially 17) Member States where the basic patent has unitary effect, national SPCs would be needed to ensure protection in additional Member States. That said, a given product cannot be protected by both a national SPC and a unitary SPC in the same Member State.
Will the new SPC regime replace the existing national SPC schemes?
No, the proposed SPC rules will not replace the existing national SPC scheme for human and veterinary pharmaceutical products, nor for plant protection products. That said, a centralised SPC application will need to be filed in respect of a medicinal product protected by a European patent (including a unitary patent) and centrally authorised; in such a case, the national route would be closed.
The reform aims at simplifying the EU’s SPC system as regards both the application for and the examination of national SPCs, by introducing an EU centralised examination procedure, reducing divergences and improving transparency and efficiency.
The new rules, however, do not alter the competence of national IP Offices in granting national SPCs, following the binding opinion issued by the examination authority, run by the EUIPO. The reform of the national SPC regime does also not alter the eligibility criteria to obtain an SPC, which remain the ones currently foreseen in Article 3 in the existing legislation for both pharmaceutical products and plant protection products.
Is there a Q&A available on SPCs?
Yes there is. You can view it here.
Factsheet on SPCs
There is a factsheet available on SPCs. You can download it here.
Progress so far
| Date | Update |
|---|---|
| 27 Apr 2023 | Initial legislative proposals published for four new regulations by the European Commission. |
| 13 October 2023 | The JURI Committee issued draft reports proposing a number of amendment and subsequently collected further amendments suggested by Committee members until November 20232. |
| 19 Jan 2024 and 24 Jan 2024 | Based on the numerous amendments proposed for each of the four draft regulations (more than 200 amendments in the case of the regulation on unitary SPCs for medicinal products), a set of compromise amendments was tabled on January 19, 2024 and subjected to a vote in the JURI Committee on January 24, 20242. All compromise amendments to all four draft SPC regulations were unanimously accepted. You can view the video footage of the voting on the four new SPC regulations in the JURI Committee session, the supporting documents, the results of the voting, and the European Parliament’s corresponding press release)2. |
| Late Feb 2024 plenary session | The European Parliament adopted its negotiating position on legislative reforms that, if implemented, would provide the underlying legal framework for unitary SPCs in the EU3. The MEPs have also proposed to adapt Commission proposals that would prevent multiple companies within the same pharmaceutical group each obtaining a unitary SPC in respect of the same medicinal product. The Commission proposed that the restriction apply to “economically linked” companies. The MEPs have proposed to define ‘economically linked’ as meaning “in respect of different holders of two or more basic patents protecting the same product, that one holder, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another holder”3. Other amendments proposed by the MEPs would introduce the potential for an “expedited procedure” for the EUIPO to issue its examination opinion in respect of a unitary SPC application. That procedure could be triggered “whenever duly justified for reasons of urgency”, under the MEPs’ plans3. |
Sources:
- European commission
- The Kluwer Patent Bog
- MEPs adopt position on introduction of unitary SPCs – Judith Krens et al, 15 March 2024, pinsentmasons.com
Updates
| Date | Update(s) |
|---|---|
| 18 March 2024 | 1) New section entitled Progress so far added. 2) Sources updated. |
| 29 Apr 2023 | New section entitled compulsory licensing of patented inventions in crisis situations added, with relevant content. |