2023-04-27 18:09:15
In the Corona pandemic, the European Commission has long defended Biontech against calls from India and South Africa to lift the patent protection for its vaccine. In the end, however, the World Trade Organization (WTO) made it easier for poor countries to issue compulsory licenses for the production of Covid-19 vaccines against the will of pharmaceutical companies. There was no reason for this in the EU. Vaccine production worked on the basis of voluntary agreements without relaxing patent protection. Nevertheless, the Commission now wants to create an option at EU level to oblige patent owners to issue compulsory licenses in emergencies.
The proposal is a key part of the patent package presented by the Commission in Brussels on Thursday. This EU compulsory license should not only apply to vaccines or medicines, but to patents of all kinds. The prerequisite is that the Commission first declares an EU crisis. In such cases, the Commission can then issue compulsory licenses with the involvement of the Member States. However, this should expressly only apply as a last resort if there are no voluntary agreements. The patent holders should receive appropriate compensation.
So far, only Member States can issue compulsory licenses at national level. In Germany, too, there is this as a crisis instrument. In the Commission’s view, however, this is not suitable for overcoming EU-wide crises that affect the entire internal market.
Corona pandemic has proven the value of patent protection
The proposals are met with resistance in industry. “The planned regime for compulsory licenses in certain emergency situations weakens the protection of intellectual property rights,” emphasizes the Federation of German Industries. Coercive measures endangered the further development of innovative technology needed in crises.
Especially during the corona pandemic, the protection of intellectual property was a prerequisite for the development and availability of effective vaccines at unprecedented speed. The German Chemical Industry Association (VCI) takes a similar position. Compulsory licenses weakened the incentive for research in key areas of the chemical industry.
However, the approach has met with approval in the EU Parliament, which, like the Council of Ministers, must agree to the proposal for it to come into force. “In crises, we as a Union must be able to act more quickly, and the patent rules can help with that,” said MP Tiemo Wölken (SPD).
End of the ongoing dispute over mobile phone patents
Regardless of this, the patent package contains a proposal to facilitate the often difficult negotiations between the holders of mobile phone patents and their users. These so-called standard essential patents (SEP) are basic technologies that are becoming increasingly important as standards for 5G or Wi-Fi for networked cars or factories (keyword Industry 4.0). In other words: without a license from the patent holders, the automotive industry – which the Commission is particularly interested in – cannot bring connected cars onto the market.
The owners of the patents are obliged to grant them on fair, reasonable and non-discriminatory terms – FRAND for short. So far, however, this has often led to years of disputes, such as between Nokia and Volvo not so long ago.
Approval from automobile manufacturers
In addition, the number of SEPs is huge, which makes it particularly confusing for small and medium-sized companies in the EU. There are a total of 75,000 and 30 percent of the owners are now from China, 19 percent each from Korea and the USA and 15 percent from the EU. The Commission also suspects that many of the patents do not play a significant role for the standards concerned, i.e. companies only want to secure user income by registering SEPs.
The Commission therefore wants to make SEP licensing more transparent, predictable and efficient. She wants to create a new register for this. The SEPs registered there should then be checked to see whether they are really indispensable for the standard in question. In addition, a mechanism supported by experts is intended to prevent disputes over the amount of license fees from dragging on for years. The case should only go to court if this does not lead to a result after nine months. Nokia was heavily criticized. The Association of the Automotive Industry spoke of a balanced approach.
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