Technological progress generally is not disruptive but sequential. Innovations build on prior innovations, typically by presenting improvements or complements. Under patent law, such follow-on innovation meets with an obstacle if the use of the invention underlying it infringes a prior patent, and if, for one reason or another, the owner of that prior patent prefers, as it may, to refuse granting a license. It is only in case the follow-on (or “second”) invention involves an important technical advance of considerable economic significance in relation to the invention claimed in the prior (or “first”) patent that in Europe, in accordance with Art. 31 TRIPS, national patent laws provide for a right of the owner of the second patent to obtain, by way of a decision of the patent office or of a court, a dependency license. By contrast, the EU’s system of unitary patent protection does not provide for a dependency licensing regime. Instead, Reg. 1257/2021 on the European patent with unitary effect refers the matter to national law. This means that despite the importance of its invention the owner of a dependent patent will never obtain a mandatory license covering the Internal Market but only territorially limited national licenses for which it must apply separately in each Member State, go through multiple different procedures and comply with different national requirements. The absurdity of such hindering of follow-on innovation in the Internal Market by regulatory abstention is no less as regards national patents that the European Patent Office grants as a bundle in the form of the European patent and that are now additionally held together by the uniform infringement rules of the Unified Patent Court Agreement. After all, that category of a European patent is supposed to represent an equivalent alternative to the unitary patent and, therefore, ought to meet the same Internal Market requirements. Therefore, this study proposes to harmonize Member States' dependency licensing regimes and to complement the system of unitary patent protection accordingly. To this end, it presents the common principles of national regimes, analyzes the particular need for and characteristics of modern mandatory licensing rules and discusses the deficits of alternative approaches that might be available under EU competition law. A particular stress is put on distinguishing dependency licensing from compulsory licensing in the public interest, and on the functional complementarity existing between incentivizing inventions by patent protection and stimulating follow-on innovation by mandatory licensing regimes
