Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems

Article 1

Scope

This Regulation establishes a procedure for the grant of compulsory licences in relation to patents and supplementary protection certificates concerning the manufacture and sale of pharmaceutical products, when such products are intended for export to eligible importing countries in need of such products in order to address public health problems.

Member States shall grant a compulsory licence to any person making an application in accordance with Article 6 and subject to the conditions set out in Articles 6 to 10.

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

(1) ‘pharmaceutical product’ means any product of the pharmaceutical sector, including medicinal products as defined in Article 1(2) of Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use (¹), active ingredients and diagnostic kits ex vivo;

(2) ‘rights-holder’ means the holder of any patent or supplementary protection certificate in relation to which a compulsory licence has been applied for under this Regulation;

(3) ‘importing country’ means the country to which the pharmaceutical product is to be exported;

(4) ‘competent authority’ for the purposes of Articles 1 to 11, 16 and 17 means any national authority having competence to grant compulsory licences under this Regulation in a given Member State.

Article 3

Competent authority

The competent authority as defined in Article 2(4) shall be that which has competence for the granting of compulsory licences under national patent law, unless the Member State determines otherwise.

Member States shall notify the Commission of the designated competent authority as defined in Article 2(4).

Notifications shall be published in the Official Journal of the European Union.

Article 4

Eligible importing countries

The following are eligible importing countries:

(a) any least-developed country appearing as such in the United Nations list;

(b) any member of the WTO, other than the least-developed country members referred to in point (a), that has made a notification to the Council for TRIPs of its intention to use the system as an importer, including whether it will use the system in whole or in a limited way;

(c) any country that is not a member of the WTO, but is listed in the OECD Development Assistance Committee's list of low-income countries with a gross national product per capita of less than USD 745, and has made a notification to the Commission of its intention to use the system as an importer, including whether it will use the system in whole or in a limited way.

However, any WTO member that has made a declaration to the WTO that it will not use the system as an importing WTO member is not an eligible importing country.

Article 5

Extension to least-developed and developing countries which are not members of the WTO

The following provisions shall apply to importing countries eligible under Article 4 which are not WTO members:

(a) the importing country shall make the notification referred to in Article 8(1) directly to the Commission;

(b) the importing country shall, in the notification referred to in Article 8(1), state that it will use the system to address public health problems and not as an instrument to pursue industrial or commercial policy objectives and that it will adopt the measures referred to in paragraph 4 of the Decision;

(c) the competent authority may, at the request of the rights-holder, or on its own initiative if national law allows the competent authority to act on its own initiative, terminate a compulsory licence granted pursuant to this Article if the importing country has failed to honour its obligations referred to in point (b). Before terminating a compulsory licence, the competent authority shall take into account any views expressed by the bodies referred to in Article 6(3)(f).

Article 6

Application for a compulsory licence

The application pursuant to paragraph 1 shall set out the following:

(a) the name and contact details of the applicant and of any agent or representative whom the applicant has appointed to act for him before the competent authority;

(b) the non-proprietary name of the pharmaceutical product or products which the applicant intends to manufacture and sell for export under the compulsory licence;

(c) the amount of pharmaceutical product which the applicant seeks to produce under the compulsory licence;

(d) the importing country or countries;

(e) where applicable, evidence of prior negotiation with the rights-holder pursuant to Article 9;

(f) evidence of a specific request from: (i) authorised representatives of the importing country or countries; or (ii) a non-governmental organisation acting with the formal authorisation of one or more importing countries; or (iii) UN bodies or other international health organisations acting with the formal authorisation of one or more importing countries, indicating the quantity of product required.

Article 7

Rights of the rights-holder

The competent authority shall notify the rights-holder without delay of the application for a compulsory licence. Before the grant of the compulsory licence, the competent authority shall give the rights-holder an opportunity to comment on the application and to provide the competent authority with any relevant information regarding the application.

Article 8

Verification

The competent authority shall verify that:

(a) each importing country cited in the application which is a WTO member has made a notification to the WTO pursuant to the Decision, or

(b) each importing country cited in the application which is not a WTO member has made a notification to the Commission pursuant to this Regulation in respect of each of the products covered by the application that: (i) specifies the names and expected quantities of the product(s) needed; (ii) unless the importing country is a least-developed country, confirms that the country has established that it had insufficient or no manufacturing capacity in the pharmaceutical sector in relation to a particular product or products in one of the ways set out in the Annex to the Decision; (iii) confirms that where a pharmaceutical product is patented in the territory of the importing country, that importing country has granted or intends to grant a compulsory licence for import of the product concerned in accordance with Article 31 of the TRIPS Agreement and the provisions of the Decision.

This paragraph is without prejudice to the flexibility that least-developed countries have under the Decision of the Council for TRIPS of 27 June 2002.

Article 9

Prior negotiation

Article 10

Compulsory licence conditions

Before shipment to the importing country or countries cited in the application, the licensee shall post on a website the following information:

(a) the quantities being supplied under the licence and the importing countries to which they are supplied;

(b) the distinguishing features of the product or products concerned.

The website address shall be communicated to the competent authority.

The licensee shall be responsible for the payment of adequate remuneration to the rights-holder as determined by the competent authority as follows:

(a) in the cases referred to in Article 9(2), the remuneration shall be a maximum of 4 % of the total price to be paid by the importing country or on its behalf;

(b) in all other cases, the remuneration shall be determined taking into account the economic value of the use authorised under the licence to the importing country or countries concerned, as well as humanitarian or non-commercial circumstances relating to the issue of the licence.

Distribution may be carried out for example by any of the bodies listed in Article 6(3)(f) and on commercial or non-commercial terms including completely without charge.

Article 11

Refusal of the application

The competent authority shall refuse an application if any of the conditions set out in Articles 6 to 9 are not met, or if the application does not contain the elements necessary to allow the competent authority to grant the licence in accordance with Article 10. Before refusing an application, the competent authority shall give the applicant an opportunity to rectify the situation and to be heard.

Article 12

Notification

When a compulsory licence has been granted, the Member State shall notify the Council for TRIPS through the intermediary of the Commission of the grant of the licence, and of the specific conditions attached to it.

The information provided shall include the following details of the licence:

(a) the name and address of the licensee;

(b) the product or products concerned;

(c) the quantity to be supplied;

(d) the country or countries to which the product or products are to be exported;

(e) the duration of the licence;

(f) the address of the website referred to in Article 10(6).

Article 13

Prohibition of importation

Article 14

Action by customs authorities

The importer, and where appropriate, the exporter shall be given ample opportunity to supply the competent authority with the information which it deems appropriate regarding the products.

Article 15

Personal luggage exception

Articles 13 and 14 shall not apply to goods of a non-commercial nature contained in travellers' personal luggage for personal use within the limits laid down in respect of relief from customs duty.

Article 16

Termination or review of the licence

The competent authority shall have the authority to review, upon reasoned request by the rights-holder or the licensee, whether the licence conditions have been respected. This review shall be based on the assessment made in the importing country where appropriate.

In situations where Article 9(2) applies, no evidence of negotiation with the rights-holder will be required.

Article 17

Appeals

Article 18

Safety and efficacy of medicinal products

Where the application for a compulsory licence concerns a medicinal product, the applicant may avail himself of:

(a) the scientific opinion procedure as provided for under Article 58 of Regulation (EC) No 726/2004, or

(b) any similar procedures under national law, such as scientific opinions or export certificates intended exclusively for markets outside the Community.

Article 18a

Union compulsory licence

Articles 7, 8, 9 and 12 shall apply mutatis mutandis.

The Commission shall, by means of an implementing act:

(a) grant a Union compulsory licence referred to in paragraph 1;

(b) reject an application for a Union compulsory licence submitted pursuant to paragraph 2;

(c) modify or terminate the Union compulsory licence granted pursuant to point (a).

In cases referred to in the first subparagraph, point (b), of this paragraph, Article 11 shall apply mutatis mutandis.

In cases referred to in the first subparagraph, point (c), of this paragraph, Article 5, point (c), and Article 16 shall apply mutatis mutandis.

The implementing acts referred to in the first subparagraph of this paragraph shall be adopted in accordance with the examination procedure referred to in Article 18b(2).

On duly justified imperative grounds of urgency relating to the impact of the public health problems to be addressed, the Commission shall adopt immediately applicable implementing acts in accordance with the procedure referred to in Article 18b(3).

Article 18b

Committee procedure

Article 18c

Applicability to and in the United Kingdom in respect of Northern Ireland

The procedure for granting a Union compulsory licence under Article 18a, and a Union compulsory licence granted under that Article, shall not apply to and in the United Kingdom in respect of Northern Ireland. The United Kingdom in respect of Northern Ireland shall ensure that the products manufactured under such a licence are not imported into the Union or Northern Ireland in accordance with Article 13, and shall take the necessary actions to that end in accordance with Article 14.

Article 19

Review

Three years after the entry into force of this Regulation, and every three years thereafter, the Commission shall present a report to the European Parliament, the Council, and the European Economic and Social Committee on the operation of this Regulation including any appropriate plans for amendments. The report shall cover, in particular:

(a) the application of Article 10(9) on determining the remuneration of the rights-holder;

(b) the application of the simplified and accelerated procedure referred to in Article 16(4);

(c) the sufficiency of the requirements under Article 10(5) to prevent trade diversion, and

(d) the contribution this Regulation has made to the implementation of the system established by the Decision.

Article 20

Entry into force

This Regulation shall enter into force on the 20th day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.