EU Council approves Regulation on Compulsory Licensing in Crisis Situations

On 27 October 2025, the Council of the European Union adopted the new Regulation on compulsory licensing for crisis management. This regulation, which will be directly applicable the day after its publication in the Official Journal of the EU, provides the Union with a harmonised instrument to ensure access to essential products and technologies in crisis situations, especially when voluntary agreements with industrial property rights holders are not possible or are insufficient.

The experience of the COVID-19 pandemic highlighted the limitations of fragmented and territorially restricted national compulsory licensing systems, as well as the need for a coordinated European response to large-scale emergencies.

The European regulation establishes that the granting of compulsory licenses is a measure of last resort, and the route of voluntary agreements between owners and potential manufacturers or distributors must always be prioritized. During the granting procedure, the European Commission shall offer the parties the opportunity to reach a voluntary agreement before proceeding with the granting of the license. Only if such agreements are not feasible or are insufficient, will public intervention be allowed.

Scope and competent authority

The regulation shall be applicable to the following industrial property rights:

• Patents (including published applications);
• Utility models; and
• Supplementary protection certificates, in force in one or more Member States.

In addition, in order for a compulsory license to be granted on these industrial property rights, it will be necessary to first activate one of the so-called "crisis or emergency modes", established in the regulation itself.

In this regard, it should be noted that this regulation does not replace national systems, which will continue to be applicable to exclusively national crises, but complements them in crisis situations of pan-European scope. In such cases, the competent authority to grant compulsory licenses will be the Commission itself, thus ensuring a unified and coherent response across the territory of the Union.

Sectoral exclusions

Certain strategic sectors, such as microchips, gas and defense, are excluded from the scope of the regulation. This exclusion occurs because the specific crisis instruments governing these sectors do not provide for compulsory licensing, or establish their own intervention mechanisms, given their particular sensitivity to the security and economic stability of the Union.

Compulsory License Features

The licenses provided for in the regulations will be non-exclusive and non-transferable – except in the cases expressly provided for – and will be limited in scope, duration and territory, in accordance with the specific objectives that motivate their granting.

Regarding the remuneration to the rights-holder, it is necessary to set "adequate" compensation, with a maximum limit of 4 per cent of the annual gross income generated by the licensee from the activities carried out under the license.

Export ban

On the other hand, the regulation expressly prohibits the export of products manufactured under a compulsory license outside the internal market. To this end, it is planned to implement customs controls and traceability obligations to prevent territories not covered by the license or by the regulation.

This measure seeks to ensure that the compulsory licensing mechanism serves exclusively to meet the internal needs of the European Union in crisis situations, avoiding its use to supply external markets or for commercial purposes outside the general European interest.

A coordinated response

The new regulation strengthens the European Union's ability to respond in a coordinated manner to crises affecting the supply of essential products, by establishing a harmonised framework for granting pan-European compulsory licenses.