Compulsory licencing for crisis management - a BusinessEurope position paper

Key messages

• Compulsory licences weaken the protection granted by patents and they should only be used in mainly knowledge-based economies as a last resort and in very limited circumstances.
• The current international and EU frameworks as well as Member States legislations are sufficient to regulate compulsory licencing of patents.
• The Commission proposal on Compulsory Licencing represents a fundamental change of approach when it comes to balancing powers between the European Commission and Member States, with negative implications on the intellectual property rights of companies and their fundamental freedom of activity. We consider that this EU intervention is against the principles of proportionality and subsidiarity.
• The European patent law system, one the main enablers of EU innovation also in the areas of the digital and sustainable transition, should not be put at risk by this proposal.
• Trade secrets and know-how should clearly be excluded from the scope of the proposal on Compulsory Licencing.
• Clear definitions (of e.g., “crises”, “emergencies”, “crisis-relevant products”, “additional measures complementing the Union compulsory licence”) are necessary to limit the wide discretion of the European Commission and ensure legal certainty.
• If the proposed system is set in place, industry, as key players under the compulsory licensing mechanism, should be a permanent fully-fledged member of the Advisory Body that is meant to assist the Commission in the decision-making process.
• The “adequate remuneration” should be negotiated and determined by the right holder and the licencee(s). This should remain a prerogative of the parties to the contract. A determination by the Commission would run contrary to the principle of the parties’ autonomy in the determination of the essential parts of their contract.