EU patent reform proposal addresses compulsory licensing and SPCs

The European Commission on Thursday published a package of regulations that would establish an EU-wide compulsory licensing scheme allowing other companies to make drugs without the patent holder’s consent in emergency situations and establishes community-wide supplementary protection certificates (SPCs) that would extend the patent term for pharmaceutical products for up to five additional years. Currently, SPCs are only granted at the national level.

The Commission said that these proposals “will create a more transparent, effective and futureproof intellectual property rights framework.”

The rules have been sent to the European Parliament and the Council of the European Union for discussion and approval before they can enter into force.

SPCs

An SPC is an “IP right that extends the term of a patent (by up to five years) for a human or veterinary pharmaceutical product, or a plant protection product, that has been authorised by regulatory authorities.” Currently, such certificates are only conferred at the national level.

“As confirmed by the evaluation carried out in 2020 … today’s purely national procedures for granting SPCs involve separate examination proceedings (in parallel or subsequent) in Member States,” said the proposal. “This entails duplication of work, resulting in high costs and more often discrepancies between Member States in decisions to grant or refuse SPCs including in litigation before national courts.”

There is a “clear need to complement the unitary patent (‘European patent with unitary effect’) by a unitary SPC.”

The unitary patent will enter into force on 1 June 2023, allowing for a single patent that covers all participating Member States.

Compulsory licensing

Another part of the package establishes an EU-wide system of compulsory licensing that allows the use of a patented product without the patent holder’s consent. These licenses are used in emergency situations, such as for medical products during the COVID-19 pandemic.

The proposal aims to replace the “patchwork” of different licensing schemes that are in place in EU member states.

“Member States have implemented different compulsory licensing schemes in national legislation, only applicable to their national territory. The proposal leaves these national compulsory licensing systems untouched. The Union compulsory licensing system introduced by this proposal does not aim at addressing purely national crises. The proposal instead aims to address crises that have a cross-border dimension within the EU, which do not fall within the scope of national compulsory licensing schemes.”

Industry response

The European Federation of Pharmaceutical Industries and Associations (EFPIA) offered a mixed assessment of the reform proposal. While the group supported unitary SPCs, it opposed the compulsory licensing proposal.

“Today’s release of the patent package proposal provides some positives, but also considerable concerns and uncertainty for companies operating in the region,” said EFPIA.

“EFPIA is encouraged by the move toward simplification and harmonization surrounding the SPC framework and the opportunities for its implementation via the Unitary patent. However, the EC’s proposal for an EU-level compulsory license, which could be used to broadly abrogate the IP rights of innovators, provokes concerns for the stability of the IP regime in Europe and appears to disregard lessons learned from the COVID pandemic response.”

The group added that compulsory licensing is a “last-resort option” and “prevents the innovators themselves – who best understand the technology – from choosing the best-positioned, trusted partners to bring a given product to market within the shortest possible time frame, in the interest of patients.”

European Commission

EU patent reform proposal addresses compulsory licensing and SPCs

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