European authorities will be able to order the use of patents and similar rights without the holders’ consent when supplies of critical products—vaccines, masks or other medical kit—are at risk. The Council of the European Union has approved a regulation to allow compulsory licensing of intellectual‑property rights in crisis situations.
The law, agreed on 27 October, puts a premium on voluntary co‑operation. It encourages firms to reach licences and offers compulsory licences only as a last resort. It also shields trade secrets from forced disclosure—unless a narrow, strictly necessary exception applies—so companies need not hand over proprietary manufacturing know‑how as a routine matter.
The move follows a string of EU crisis tools born of the COVID‑19 pandemic. Brussels has already proposed a Single Market Emergency Instrument and a regulation to secure supplies of medical countermeasures. Those instruments give the bloc powers to keep goods moving and to secure access to vital products across the internal market.
A trade-off
Officials argue that voluntary deals remain the quickest way to ramp up production. A manufacturer that shares know‑how under contract usually speeds a response more effectively than a court order. Yet negotiators also accept that firms may sometimes refuse or delay. In such cases, compulsory licensing offers a legal backstop to permit third parties to make protected products in the public interest.
The compromise reflects a trade‑off. Lawmakers wanted to ensure access to life‑saving goods in crises while avoiding measures that would cripple future innovation. By protecting trade secrets from routine disclosure, the regulation aims to preserve firms’ incentives to invest in research and to keep confidential processes that patents do not reveal.
You might be interested
Critics say the shield for trade secrets may blunt the regulation’s bite. If key manufacturing details remain guarded, a compulsory patent licence alone might not let a third party produce a complex vaccine quickly. Supporters counter that the law still allows disclosure when strictly necessary and that the shield will make firms more willing to strike voluntary deals.
Last resort only
In May, the Council and the European Parliament reached a provisional agreement on the regulation governing compulsory licensing for crisis management purposes. The agreement, aiming at ensuring the availability of critical products within the internal market during emergencies, establishes a framework under which intellectual property rights may be exercised without the authorisation of the rights holders.
The measures are a last resort, with priority given to voluntary agreements between patent holders and potential users. These measures apply only once relevant authorities officially activate a crisis or emergency mode at the EU level.
We consider that this EU intervention is against the principles of proportionality and subsidiarity. — Business Europe position paper
Notably, the regulation excludes sectors such as gas, chips, and defence products and does not mandate the disclosure of trade secrets. The measures were born in the context of addressing the fragmented national approaches previously in place, and they are to safeguard a high level of intellectual property protection while enhancing European crisis preparedness.
Business criticism
In June, the trade association Business Europe issued a position paper sharply criticising the development. „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,“ it said. „The current international and EU frameworks as well as member states legislations are sufficient to regulate compulsory licencing of patents.“
According to the statement, 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,“ Business Europe said at the time.
It also demanded that “industry, as key players under the compulsory licensing mechanism, be a permanent fully-fledged member of an advisory body that is meant to assist the Commission in the decision-making process“, should the proposed system be set in place. The association saw adequate remunaraiton as the central negotiating point.
Awaiting plenary approval
The regulation now becomes part of a broader EU emergency toolkit. Its backers hope that the mix of voluntary incentives and a limited compulsory option will make the bloc both faster and fairer in future crises. Whether it proves sufficient when the next emergency arrives will depend on how readily firms and governments use the tools at their disposal.
The approval of the first-reading position is the last step in the adoption process at Council level. The text still needs to be approved in a plenary session of the European Parliament. The regulation will enter into force 20 days after its publication in the Official Journal.
