European Commission Proposes EU IP Harmonization Package with EU-wide Compulsory Licensing
The European Commission proposed new regulations on April 27, 2023, pertaining to standard essential patents, compulsory licensing of patents during crisis scenarios, and the amendment of supplementary protection certificate legislation. These proposed regulations strive to aid companies, particularly SMEs, in maximizing their inventions through the establishment of a more transparent, efficient, and durable framework for intellectual property rights. The proposal will enhance the effectiveness of the Unitary Patent system, which is scheduled to become operational on June 1, 2023.
The suggested new regulations will extend these measures, streamlining certain elements of patent laws that have been inconsistent across different countries until now. Intellectual property (IP) holds greater significance than ever as a crucial catalyst for economic expansion. As per the Commission, industries reliant on IP contribute nearly half of the GDP and more than 90% of all exports within the EU. The proposed new regulations will undergo evaluation and modification by the European Parliament and the member states. They will need to endorse the final agreement before it becomes effective.
What Does the Commission Propose in the Package?
Here are key areas that this initiative intends to tackle
Supplementary Protection Certificates (SPC)
The European Commission has proposed the introduction of a unitary Supplementary Protection Certificate (SPC) to complement the Unitary Patent. The current system of SPC protection suffers from fragmentation, leading to complex and costly procedures and legal uncertainty. The new initiative aims to introduce a centralized evaluation procedure implemented by EUIPO, resulting in the granting of national SPCs for each of the Member States designated in the application. The same procedure may also result in the grant of a unitary SPC.
Standard Essential Patents
The Commission has proposed a new framework to address issues related to standard essential patents (SEPs). The new framework aims to create a balanced system that sets a global benchmark for SEP transparency and efficient negotiations. It includes a SEP register, database, essentiality checks, expert opinions on SEP aggregate royalty, FRAND determination by means of conciliation, SME support measures, and establishing a 'Competence center' at the European Union Intellectual Property Office (EUIPO).
The EU Commission has proposed a new EU-wide compulsory licensing instrument to complement EU crisis instruments such as the Single Market Emergency Instrument, HERA regulations, and the Chips Act. The new rules aim to ensure access to key patented products and technologies in times of crisis when voluntary agreements are not available or adequate. Currently, there are 27 national compulsory licensing regimes in the EU, leading to legal uncertainty for both rights holders and users of IP rights.