The Council of the EU adopted its position on the EU Regulation on compulsory licensing for crisis management on 26 June (press release). The Regulation, originally proposed by the European Commission on 27 April 2023, aims to create an efficient compulsory licensing framework at EU level to ensure access to key products and technologies in EU crisis situations, where voluntary agreements are not available or adequate. The Council’s position constitutes the mandate for negotiations with the European Parliament, which previously adopted its first reading position on the proposal on 13 March 2024 (see here).
Stakeholders’ views on the Commission’s original proposal have varied, with civil society organisations, such as Médecins Sans Frontières, typically favouring a broader application of the compulsory licensing regulation, whereas industry organisations generally support a narrower application.
Those in favour of the proposal, including Médecins Sans Frontières and Médecins du Monde, called for: obligations on the rights-holder to allow access to sufficient information and trade secrets if a compulsory licence is issued, in order to achieve the objectives of compulsory licensing; the ability to waive attempts for voluntary licensing in an emergency; and the use of the compulsory licence procedure whenever necessary, rather than as a last resort.
Criticisms of the original proposal focused on: the lack of safeguards for trade secrets; the lack of involvement of the rights-holder; and the lack of a definition of ‘crisis’. The Council’s position appears to address a number of these concerns, however it remains to be seen whether industry organisations continue to consider that there are grounds for concern.
The Council’s adopted position on the proposal (see here):
- restructures the procedure of granting an EU-wide compulsory licence with the aim of ensuring rights-holders are better informed throughout the procedure;
- underlines the ‘last resort’ nature of a compulsory licence, to be used only when voluntary agreements are not available or adequate;
- strengthens the roles of the relevant advisory body for the particular crisis mode and national IP experts in assisting the Commission to establish whether there is a need to grant an EU compulsory licence;
- protects rights-holders from having to disclose trade secrets; and
- reduces to three, from five, the number of EU legislative acts in accordance with which a crisis mode or emergency mode can be declared at EU-level in respect of granting an EU compulsory licence.
The Council and the Parliament are expected to hold informal negotiations in autumn 2024 with the aim of reaching agreement on the final text of the proposal. It can take approximately 12 months for a proposal to enter into force once it has been accepted.
For further information, please contact:
Rachel Montagnon, Herbert Smith Freehills
Rachel.Montagnon@hsf.com
