[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3175 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 3175
To amend title 35, United States Code, with respect to establishing
procedures for granting authority to the Under Secretary for Commerce
for Intellectual Property and Director of the Patent and Trademark
Office to grant compulsory patent licenses for exporting patented
pharmaceutical products to certain countries consistent with
international commitments made by the United States, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 25, 2006
Mr. Leahy introduced the following bill; which was read twice and
referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 35, United States Code, with respect to establishing
procedures for granting authority to the Under Secretary for Commerce
for Intellectual Property and Director of the Patent and Trademark
Office to grant compulsory patent licenses for exporting patented
pharmaceutical products to certain countries consistent with
international commitments made by the United States, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Life-Saving Medicines Export Act of
2006''.
SEC. 2. PURPOSES AND FINDINGS.
(a) Purpose.--The purpose of this Act is to promote public health
by permitting the export of life-saving pharmaceutical products and
other medicines manufactured in the United States by compulsory license
to residents of participating countries with insufficient or no
manufacturing capability in the pharmaceutical sector for the product
in question consistent with the General Council Decision of the World
Trade Organization.
(b) Findings.--Congress finds the following:
(1) The United States Trade Representative recently
announced that it ``welcomes'' the World Trade Organization
amendment to ``allow countries to override patent rights when
necessary to export life-saving drugs to developing countries
that face public health crises but cannot produce drugs for
themselves.''. United States Ambassador Portman called this ``a
landmark achievement that we hope will help developing
countries.''.
(2) Compulsory licensing of patents is a ``fixture in
almost all patent systems'' in the world as noted in the
Berkeley Technology Law Journal in 2003. By the end of the
1950s, for example, an estimated 40,000 to 50,000 compulsory
licenses were issued regarding patents in the United States.
(Access to Patented Medicine in Developing Countries, F.M.
Scherer, www.cmhealth.org/docswg4; World Health Organization).
Indeed, the WHO paper notes that the ``United States has led
the world in issuing compulsory licenses to restore competition
when violations of the antitrust laws have been found, or in
the negotiated settlement of antitrust cases before full
adjudication has occurred.''
(3) The vast majority of people living in developing
countries or least developed nations have limited or no access
to many medicines that are saving and extending lives of those
in other, more developed nations. Since sales of the patented,
brand-name versions of such medicines are minimal or non-
existent in many impoverished regions of the world providing
generic versions of those medicines under the WTO General
Council Decision will have minimal impact on the sales of
brand-name, patented versions in such regions.
(4) The World Health Organization has estimated that \1/3\
of the world's population lacks regular access to essential
medicines, including antiretroviral drugs, and that a number of
essential medicines are under patent.
(5) Medicines and vaccines are needed throughout the world
to combat newly arising public health threats such as the avian
flu. A United States National Intelligence Estimate in January
2000 notes that ``New and emerging infectious diseases will
pose a rising global health threat...''.
(6) Millions of people with HIV/AIDS in developing
countries need antiretroviral drugs. More than 40,000,000
people worldwide have HIV and 95 percent of them live in
developing countries. Malaria, tuberculosis, and other
infectious diseases kill millions of people a year in
developing nations.
(7) Comprehensive reports of the World Health Organization
of the United Nations, in 2004 and 2005 detail the urgent need
for pharmaceutical products in developing countries and in
least developed nations.
(8) The World Trade Organization decisions of August 30,
2003, on access to generic medicines is now being considered by
member nations of the World Trade Organization for ratification
as a permanent amendment to the WTO Agreement on Trade Related
Aspects of Intellectual Property Rights.
SEC. 3. EXPORTATION OF PHARMACEUTICAL PRODUCTS FOR PUBLIC HEALTH
PURPOSES.
(a) In General.--Chapter 29 of title 35, United States Code, is
amended by inserting after section 297 the following:
``Sec. 298. Exportation of pharmaceutical products for public health
purposes
``(a) Definitions.--In this section:
``(1) Eligible country.--The term `eligible country' means
a country that--
``(A)(i) is designated by the United Nations as a
least developed country; or
``(ii) if not so designated--
``(I) has certified to the General Council
that the country seeks to participate in the
compulsory licensing system under this section
as authorized by the General Council Decision;
or
``(II) has certified through an official
government finding if not a member of the World
Trade Organization, that the country does not
possess sufficient manufacturing capacities to
produce the pharmaceutical product that such
country seeks to import under this section;
``(B) has provided notice to the Director
describing such lack of sufficient manufacturing
capacities; and
``(C) has not terminated that country's
participation in such compulsory licensing system by
certifying to the General Council or to the Director
that it no longer desires to participate in such a
system.
``(2) General council.--The term `General Council' means
the General Council of the WTO established by paragraph (2) of
Article IV of the Agreement Establishing the World Trade
Organization entered into on April 15, 1994.
``(3) General council decision.--The term `General Council
Decision' means the decision of the General Council of 30
August 2003 on the Implementation of Paragraph 6 of the Doha
Declaration on the TRIPS Agreement and Public Health and the
WTO General Council Chairman's statement accompanying the
Decision (JOB(03)/177, WT/GC/M/82) (collectively known as the
`TRIPS/health solution').
``(4) Generic manufacturer.--The term `generic
manufacturer' means, with respect to a pharmaceutical product,
a manufacturer that does not hold the patent to such
pharmaceutical product or is not otherwise authorized by the
patent holder to make use of the invention.
``(5) Pharmaceutical product.--The term `pharmaceutical
product' means any patented product, or pharmaceutical product,
including components of that product, manufactured through a
patented process, of the pharmaceutical sector including any
drug, active ingredient of a drug, diagnostic, or vaccine
needed to prevent or treat potentially life threatening public
health problems, including those listed in Paragraph 6 of the
Doha Declaration on the TRIPS Agreement and Public Health.
``(6) TRIPS agreement.--The term `TRIPS Agreement' means
the Agreement on Trade-Related Aspects of Intellectual Property
Rights (described in section 101(d)(15) of the Uruguay Round
Agreements Act (19 U.S.C. 3501 note)).
``(7) World trade organization.--The term `World Trade
Organization' means the organization established pursuant to
the WTO Agreement.
``(8) WTO agreement.--The term `WTO Agreement' means the
Agreement Establishing The World Trade Organization entered
into on April 15, 1994.
``(9) WTO.--The term `WTO' has the meaning given that term
in section 2 of the Uruguay Round Agreements Act (19 U.S.C.
3501).
``(10) Uruguay round agreements.--The term `Uruguay Round
Agreements' has the meaning given such term in section 2(7) of
the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
``(b) Issuance of Compulsory License.--Notwithstanding any other
provision of part II or this part, and subject to subsections (c) and
(d), the Director shall issue a compulsory license to a generic
manufacturer of a pharmaceutical product or a patented product under
this section consistent with the Life-Saving Medicines Export Act of
2006 for the purposes of--
``(1) manufacturing and exporting to an eligible country,
(including using nongovernmental agencies to assist in handling
and distribution to eligible countries) such pharmaceutical
products, including exporting for the purpose of foreign
testing and certification and other activities reasonable
related to such manufacturing and exporting; and
``(2) such other purposes under that Act.
``(c) Application for Compulsory License.--
``(1) In general.--
``(A) Submission.--Except as provided under
subsection (g), a generic manufacturer that seeks to
manufacture and export a pharmaceutical product to an
eligible country (including through the use of a
nongovernmental organization) shall submit to the
Director an application as developed by the Director
for a compulsory license as described in this section.
``(B) Assistance.--The Director shall establish an
office within the Patent and Trademark Office to
assist--
``(i) applicants under this section,
including aiding persons in identifying what
patents cover which pharmaceutical products and
in providing other advice and guidance to
facilitate the filing of complete applications;
and
``(ii) eligible countries, nongovernmental
organizations, or nations likely to become
eligible countries, identify companies in the
United States which could provide
pharmaceutical products under this section to
such countries.
``(2) Content of application.--The Director shall approve
an application submitted under paragraph (1) if such
application contains--
``(A) the name of the pharmaceutical product to be
manufactured and exported under the license;
``(B) an estimate of the quantities of the
pharmaceutical product to be manufactured and exported
under the license and a stipulation that the amount
manufactured and exported shall not exceed the amount
necessary to meet the needs of the eligible country;
``(C) for each patented invention to which the
application relates--
``(i) the name of the patent holder and the
applicable patent number; or
``(ii) a statement by the applicant on
information and belief of the name of the
patent holder and applicable patent number;
``(D) the name of the eligible country to which the
pharmaceutical product will be exported and the name of
any nongovernmental organization which will assist in
the effort;
``(E)(i) copies of the notifications of the
eligible countries that are member countries of the
WTO, as defined in the General Council Decision, made
to the Council for TRIPS regarding notifications set
forth under 2(a) of such Decision; and
``(ii) for eligible countries that are not member
countries of the WTO, a copy of the information
required by the notification as set forth under 2(a) of
such Decision published on a public website and the
address of such website;
``(F) a copy of a written request for a voluntary
license sent by registered mail to each patent holder,
which shall have occurred during a period of at least
60 days before the submission of the application to the
Director, and a brief description of any subsequent
negotiations;
``(G) copies of--
``(i) notifications required under the
General Counsel Decision;
``(ii) the name of the authorized
designated official of the eligible country, or
a nongovernmental organization duly authorized
to assist in the distribution of pharmaceutical
products--
``(I) from whom the generic
manufacturer has received a specific
request for a pharmaceutical product
and is taking steps to prepare such
product or related products; or
``(II) with whom the generic
manufacturer has reached an agreement
to manufacture and export the
pharmaceutical product; or
``(iii) a copy of a valid license, other
authorization, or communication issued by a
potential eligible country permitting import of
the pharmaceutical product from the United
States; and
``(H) an agreement or understanding entered into by
the applicant to comply with the conditions described
under subsection (d) and with the provisions of the
General Council Decisions; and
``(I) any additional information reasonably
required by the Director, including information
necessary to ensure the identification of the product
that is the subject of the application.
``(3) Combined license applications.--The Director may--
``(A) establish procedures to permit a combined
license application from more than 1 eligible country;
``(B) issue a multi-country license if appropriate;
``(C) issue rules based on the requirements of this
section relating to separate country applicants, in
consultation with the National Advisory Board on
Implementation of the General Council Decision
established under section 5 of the Life-Saving
Medicines Export Act of 2006, except for modifications
made to accommodate applying the rules for 1 country to
applications filed by more than 1 eligible country in
the same filing; and
``(D) waive any record keeping, application, or
related provision of this subsection to the extent
necessary to implement this paragraph for any combined
application from multiple countries.
``(4) Action by director.--
``(A) In general.--Not later than 60 days after the
submission of an application, the Director shall
approve or deny that application.
``(B) Conditional denial.--The Director may deny an
application and request additional information or
evidence to be submitted within 30 days after making
the request. If additional information or evidence is
submitted within the 30-day period, the Director shall
make a final approval or denial of the application
within 60 days after the date of submission of the
additional information or evidence.
``(5) Appeal of denial.--An applicant may seek review of a
final adverse decision of the Director, including any adverse
decision based on failure to comply with any provision of
paragraph (2) in the United States Court of Appeals for the
Federal Circuit. The judgement of such court shall be subject
to final review by the Supreme Court upon certiorari in the
manner prescribed in section 1254 of title 28. The United
States Court of Appeals for the Federal Circuit shall decide
all relevant questions of law, provide appropriate orders,
relief, or judgments, and shall hold unlawful and set aside any
determination of the Director that the court finds to be--
``(A) arbitrary, capricious, an abuse of
discretion, inconsistent with this section, or
otherwise not in accordance with law;
``(B) contrary to constitutional right, power,
privilege, or immunity;
``(C) in excess of statutory jurisdiction,
authority, or limitations, or in violation of a
statutory right; or
``(D) without observance of procedure required by
law.
``(d) Conditions of License.--Under rules issued by the Director,
the following conditions shall apply to a compulsory license issued
under this section:
``(1) The pharmaceutical product--
``(A) shall be a generic version of a patented
product approved as safe and efficacious by the World
Health Organization of the United Nations or the United
States Food and Drug Administration; and
``(B) shall be manufactured solely for export to
the eligible country listed in the application under
subsection (c); and
``(C) shall not be exported to any other country
except for nation parties to a regional trade agreement
as set forth in paragraph 6(i) of the General Council
Decision.
``(2) The pharmaceutical product, or the label or packaging
of the pharmaceutical product, for export shall be--
``(A) clearly identified as being produced under
the system set out in the General Council Decision; and
``(B) distinguished from the pharmaceutical product
or its label or packaging manufactured by the patent
holder through labeling, shaping, sizing, marking,
special packaging, or other means or combinations of
means, which shall be consistent with paragraph
2(b)(ii) of the General Council Decision and include--
``(i) a statement that such pharmaceutical
product has been manufactured solely for export
to the specific eligible country or to nation
parties to a regional trade agreement as
provided for in paragraphs 6(i) and 6(ii) of
the General Council Decision and is not
approved for marketing in the United States;
``(ii) a statement indicating that the
pharmaceutical product is subject to a
compulsory license issued to the generic
manufacturer; and
``(iii) any other markings determined
appropriate by the Director to distinguish such
pharmaceutical product from the patented
pharmaceutical product, which may include a
different trademark name or distinctive color
or shaping, so long as--
``(I) such distinction is feasible
and does not have a significant impact
on price and will not undermine the
humanitarian purposes of the Life-
Saving Medicines Export Act of 2006;
and
``(II) the Director may temporarily
waive the requirements of the
distinguishing marks under urgent
circumstances for limited quantities of
such pharmaceutical products.
``(3) The term of such compulsory license shall expire on
the date that is the earliest of--
``(A) 7 years after the date of issuance of the
license;
``(B) the date the importing country is no longer
an eligible country; or
``(C) on a petition from the original patent
holder, on the date that the Director, in consultation
with the National Advisory Board on Implementation of
the General Council Decision established under section
5 of the Life-Saving Medicines Export Act of 2006,
determines that the circumstances that have led to the
granting of the license cease to exist and it appears
probable that such circumstances will not reoccur.
``(4) The licensee shall keep accurate records of all
quantities of products manufactured and distributed under its
license and shall make such records available upon request to
an independent person agreed to by the parties, or otherwise
approved by the Director, for the sole purpose of ensuring
whether the terms of the license have been met.
``(5) A generic manufacturer issued a license under this
section may notify the Director if the estimated quantity of
the pharmaceutical product set forth in the application and
subsection (c)(2)(B) will be insufficient to meet the projected
need during the remainder of the license period. The Director
shall adjust the estimated quantity to the quantity proposed by
the licensee unless compelling evidence demonstrates that the
proposed quantity is excessive.
``(e) Compensation to Patent Holder.--
``(1) In general.--The holder of a compulsory license under
this section shall pay to the patent holder a royalty in an
amount and by a date determined by the Director that shall not
be--
``(A) earlier than the date of each shipment for
export of the pharmaceutical product under the
compulsory license; or
``(B) later than 45 days after the date of each
shipment.
``(2) Amount of royalty.--In consultation with the
Secretary of Health and Human Services, the Director of the
National Institutes of Health, the Director of the United
States Agency for International Development, and the Director
of the Centers of Disease Control, the Director, when
determining a royalty amount under paragraph (1), shall
consider the following:
``(A) The provisions of paragraph 3 of the General
Council Decision and the need for the licensee under
this section to make a reasonable return sufficient to
sustain a continued participation in humanitarian
objectives.
``(B) The humanitarian and noncommercial reasons
for issuing a compulsory license under this section.
``(C) The economic value to the importing country
of the use that has been authorized by the Director.
``(D) The need for low-cost pharmaceutical products
by persons in eligible countries.
``(E) Whether the importing country has a patent
applicable to the pharmaceutical product sought to be
imported under this section.
``(F) The ordinary levels of profitability in the
United States, of commercial agreements involving
pharmaceutical products, and any relevant international
trends in relevant prices as reported by the United
Nations or other appropriate humanitarian organizations
or agencies for the supply of such products for
humanitarian purposes.
``(3) Royalty rate formulas.--
``(A) In general.--
``(i) Factors.--Except as provided in
subparagraph (B), the amount of the royalty
payable to any patentee under this subsection--
``(I) shall be based on
considerations under paragraph (2); and
``(II) shall not exceed the amount
determined by multiplying the
commercial value of the pharmaceutical
product to be exported under the supply
agreement by 4 percent.
``(ii) Multiple patentees.--If more than 1
patentee is due a royalty for a pharmaceutical
product under this section, the amount of the
royalty payable for the pharmaceutical product
shall be divided by the number of patentees.
``(B) Alternative royalty rate formula.--
``(i) In general.--
``(I) Establishment and use.--
Subject to subclause (II), the Director
may establish and use an alternative
royalty rate formula under this
subparagraph instead of the royalty
rate formula under subparagraph (A),
if--
``(aa) the Director makes a
determination that the
alternative royalty rate
formula is more appropriate or
efficient to employ; and
``(bb) the alternative
royalty rate formula is based
on the methodology described
under clauses (ii) through (v).
``(II) Limitation.--If the royalty
amount determined under the alternative
royalty rate formula under subclause
(I) exceeds the dollar amount
determined by multiplying the
commercial value of the pharmaceutical
product to be exported under the supply
agreement by 4 percent the royalty
amount shall be set at such dollar
amount.
``(ii) Human development index countries.--
If the name of the country to which a
pharmaceutical product is to be delivered under
this section is on the Human Development Index
maintained by the United Nations Development
Program, the rate for calculation of the
royalty to be paid to any patentee shall be
determined by--
``(I) adding 1 to the total number
of countries listed on such Index;
``(II) subtracting from the sum
determined under subclause (I) the
numerical rank on the Index of the
country to which the pharmaceutical
product is to be exported;
``(III) dividing the difference
determined under subclause (II) by the
total number of countries listed on the
Index; and
``(IV) multiplying the quotient
determined under subclause (III) by
0.04.
``(iii) Single and multiple patentees.--For
a country described under clause (ii), the
amount of the royalty payable to any patentee
shall be determined--
``(I) if there is only 1 patentee,
by multiplying the total monetary value
of the agreement pertaining to the
pharmaceutical product to be exported
under this section by the royalty rate
determined in accordance with clause
(ii); and
``(II) if there is more than 1
patentee, by dividing the amount
determined under subclause (I) by the
number of patentees.
``(iv) Countries not on human development
index.--If the name of the country to which a
pharmaceutical product is to be delivered under
this section is not on the Human Development
Index maintained by the United Nations
Development Program, the Director shall--
``(I) determine if relevant
circumstances in that country are
reasonably similar to another country
on that Human Development Index;
``(II) if determining a similar
country under subclause (I), use the
procedures under clause (ii) to
determine a royalty payment using the
numerical rank of that other country;
and
``(III) if determining a royalty
rate under subclause (II), state the
reasons for making the determination
that the country to which the product
is to be exported was reasonably
similar to the country on such Index
used in the calculation.
``(v) Regional trade agreements.--If the
Director knows during review of an application
that the pharmaceutical products are to be
delivered under this section to parties to a
regional trade agreement where re-exportation
is allowed under paragraph 6(i) and (ii) of the
General Council Decision, the Director shall--
``(I) determine if relevant
circumstances in those countries are
reasonably similar to a country on the
Human Development Index;
``(II) if determining a similar
country under subclause (I), use the
procedures under clause (ii) to
determine a royalty payment based on
the numerical rank of that other
country; and
``(III) if determining a royalty
rate under subclause (III), shall state
the reasons for making the
determination that the countries to
which the products are to be re-
exported under paragraph 6(i) and (ii)
of such Decision were reasonably
similar to the country selected on such
Index.
``(4) Notice of shipments.--Before each shipment of any
product manufactured under this section, the manufacturer
shall, within 15 days before such product is exported, provide
notice through registered mail specifying the approximate
quantity to be exported to--
``(A) the patentee;
``(B) the purchaser of the product; and
``(C) the Director.
``(f) Renewal of Compulsory License.--
``(1) In general.--A generic manufacturer that is the
holder of a compulsory license under this section may submit to
the Director an application to renew the compulsory license.
``(2) Content of renewal application.--An application under
paragraph (1) shall contain--
``(A) an assurance that the quantities of the
pharmaceutical product authorized to be exported under
the renewal compulsory license will not be exported
before such original compulsory license ceases to be
valid;
``(B) an assurance that the applicant has complied
with the terms, conditions, and royalty payment
required under this section; and
``(C) any other information that the Director may
reasonably require.
``(3) Timing of renewal.--An application for renewal shall
be submitted to the Director not later than 45 days before the
expiration date of the compulsory license.
``(4) Term of renewal.--The term of a renewed compulsory
license shall not exceed the term of the original compulsory
license.
``(5) Limitation.--A compulsory license may not be renewed
more than once.
``(g) Effect of Section.--To the extent authorized in Article 31(b)
of the TRIPS Agreement, nothing in this section shall be construed as
requiring an effort to obtain a voluntary license in the event of--
``(1) a national emergency or other circumstances of
extreme urgency in the eligible country; or
``(2) a public noncommercial governmental use.
``(h) Emergencies and Circumstances of Extreme Urgency.--
``(1) Expedited approval.--
``(A) In general.--The Director may provide
approval on an expedited basis for a limited period of
time to grant a compulsory license regarding a
pharmaceutical product to a generic manufacturer to
address a national emergency or other circumstances of
extreme urgency under such expedited procedures as the
Director determines appropriate.
``(B) Procedures.--Procedures under this paragraph
may include--
``(i) waiving any requirement to seek a
voluntary license from the patent holder; and
``(ii) delaying the determination of
compensation until after an approval is made.
``(2) Waiver.--In carrying out expedited approvals under
this subsection, the Director may temporarily waive any
provision of this section.
``(i) Notification to WTO.--The Director shall notify the WTO of
the issuance, termination, or renewal of a compulsory license under
this section and of the name and address of the licensee, the product
for which the license has been granted, the quantities for which it has
been granted, and the countries to which the product is to be
supplied.''.
(b) Establishment of Procedures.--
(1) In general.--The Under Secretary of Commerce for
Intellectual Property and Director of the United States Patent
and Trademark Office (referred to in this section as the
``Director'') shall establish procedures for implementing this
Act and the amendments made by this Act.
(2) Report.--The Director shall annually submit to the
Committee on the Judiciary of the Senate and the Committee on
the Judiciary of the House of Representatives a report that
describes the activities related to the implementation of this
Act and the amendments made by this Act.
(3) Regulations.--The Director may issue such regulations
as are necessary and appropriate to carry out this Act and the
amendments made by this Act.
(c) Technical and Conforming Amendment.--The table of sections for
chapter 29 of title 35, United States Code, is amended by adding after
the item relating to section 297 the following:
``298. Exportation of pharmaceutical products for public health
purposes.''.
SEC. 4. NONINFRINGEMENT OF PATENT.
Section 271 of title 35, United States Code, is amended--
(1) by redesignating subsections (h) and (i) as subsections
(i) and (j), respectively; and
(2) by inserting after subsection (g) the following:
``(h)(1) It shall not be an act of infringement to manufacture
within the United States or for export outside the United States any
patented invention relating to a pharmaceutical product (as defined
under section 298) by any person that--
``(A) is issued a compulsory license to manufacture and
sell that drug under section 298; and
``(B) manufactures and exports that drug in compliance with
all conditions of that license.
``(2) Subsection (d) (4) or (5) shall not apply to any patent
affected by a license described under paragraph (1) of this
subsection.''.
SEC. 5. NATIONAL ADVISORY BOARD ON IMPLEMENTATION OF THE GENERAL
COUNCIL DECISION.
(a) Definitions.--In this section:
(1) Board.--The term ``Board'' means the National Advisory
Board on Implementation of the General Council Decision
established under this section.
(2) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
(3) Eligible country.--The term ``eligible country'' means
a country that--
(A)(i) is designated by the United Nations as a
least developed country; or
(ii) if not so designated, does not possess
sufficient manufacturing capacities to produce the
pharmaceutical product that such country seeks to
import under section 298 of title 35, United States
Code (as added by this Act); and
(B) has provided notice to the Director describing
such lack of sufficient manufacturing capacities.
(4) General council.--The term ``General Council'' means
the General Council of the WTO established by paragraph (2) of
Article IV of the Agreement Establishing the World Trade
Organization entered into on April 15, 1994.
(5) General council decision.--The term ``General Council
Decision'' means the decision of the General Council of 30
August 2003 on the Implementation of Paragraph 6 of the Doha
Declaration on the TRIPS Agreement and Public Health and the
WTO General Council Chairman's statement accompanying the
Decision (JOB(03)/177, WT/GC/M/82) (collectively known as the
``TRIPS/health solution'').
(6) Generic manufacturer.--The term ``generic
manufacturer'' means, with respect to a pharmaceutical product,
a manufacturer that does not hold the patent to such
pharmaceutical product or is not otherwise authorized by the
patent holder to make use of the invention.
(7) Pharmaceutical product.--The term ``pharmaceutical
product'' means any patented pharmaceutical product, or
pharmaceutical product manufactured through a patented process,
including any drug, active ingredient of a drug, diagnostic, or
vaccine needed to prevent or treat public health problems.
(8) TRIPS agreement.--The term ``TRIPS Agreement'' means
the Agreement on Trade-Related Aspects of Intellectual Property
Rights (described in section 101(d)(15) of the Uruguay Round
Agreements Act (19 U.S.C. 3501 note)).
(9) World trade organization.--The term ``World Trade
Organization'' means the organization established pursuant to
the WTO Agreement.
(10) WTO agreement.--The term ``WTO Agreement'' means the
Agreement Establishing The World Trade Organization entered
into on April 15, 1994.
(11) WTO.--The term ``WTO'' has the meaning given that term
in section 2 of the Uruguay Round Agreements Act (19 U.S.C.
3501).
(12) Uruguay round agreements.--The term ``Uruguay Round
Agreements'' has the meaning given such term in section 2(7) of
the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
(b) Establishment.--The Director shall establish the National
Advisory Board on Implementation of the General Council Decision in
accordance with the Federal Advisory Committee Act (5 U.S.C. App.) to
provide advice and guidance regarding the implementation and
administration of the compulsory licensing program established under
section 298 of title 35, United States Code (as added by this Act),
including royalty amounts to be determined under that section.
(c) Composition of the Board.--The Board shall be composed of 10
members, of which--
(1) 1 shall be an individual who is an academic expert on
the subject of pharmaceutical matters and patent law;
(2) 2 shall be an individual with expertise relating to the
WTO, the TRIPS/health solution, and the General Council
Decision;
(3) 2 shall be an individual with expertise relating to the
needs of persons living in least-developed and developing
nations with respect to access to low-cost patented
pharmaceutical products;
(4) 2 shall be individuals who represent international
organizations, such as the United Nations, the World Bank,
international nongovernmental organizations, and religious
faiths, and who have expert knowledge regarding the General
Council Decision and the issues raised by that decision;
(5) 1 shall be a physician with experience in treating
persons with HIV/AIDS, malaria, tuberculosis, or other
infectious diseases;
(6) 1 shall be an individual representing major
pharmaceutical manufacturers in the United States; and
(7) 1 shall be an individual representing major generic
manufacturers of pharmaceutical products in the United States.
(d) Appointments.--Not later than 120 days after the date of
enactment of this Act, the Director, in consultation with the Director
of the National Institutes of Health (or a designee), the Director of
the United States Agency for International Development (or a designee),
and the Director of the Centers for Disease Control (or a designee)
shall appoint--
(1) the members of the Board described under subsection
(c)(1), (5), (6), and (7)--
(A) from nominations received from a request for
applications published in the Federal Register; and
(B) after engaging in other efforts to make
institutions of higher education within the United
States, international organizations, and groups
representing the medical profession aware of the
solicitation for nominations;
(2) 1 member of the Board described under subsection
(c)(2), from recommendations of the Majority Leader of the
Senate;
(3) 1 member of the Board described under subsection
(c)(2), from recommendations of the Minority Leader of the
Senate;
(4) 1 member of the Board described under subsection (c)(3)
from recommendations of the Speaker of the House of
Representatives;
(5) 1 member of the Board described under subsection (c)(3)
from recommendations of the Minority Leader of the House of
Representatives; and
(6) 2 members of the Board described under subsection
(c)(4) from recommendations of the Secretary of State in
consultation with the United States Ambassador to the United
Nations.
(e) Term.--A member of the Board shall serve for a term of 4 years,
except that the Director shall appoint the original members of the
Board for staggered terms of not more than 4 years. A member may not
serve a consecutive term unless such member served an original term
that was less than 4 years.
(f) Meetings.--The Director shall convene--
(1) a meeting of the Board not later than 60 days after the
appointment of its members;
(2) subsequent meetings on a periodic basis; and
(3) at least 2 meetings a year during the first 4 years
after the date of enactment of this Act.
(g) Compensation and Expenses.--A member of the Board shall serve
without compensation. While away from their homes or regular places of
business on the business of the Board, members of the Board may be
allowed travel expenses, including per diem in lieu of subsistence, as
is authorized under section 5703 of title 5, United States Code, for
persons employed intermittently in the Government service.
(h) Chairperson.--The Board shall select a chairperson for the
Board.
(i) Quorum.--A majority of the members of the Board shall
constitute a quorum for the purpose of conducting business.
(j) Decisive Votes.--Two-thirds of the votes cast at a meeting of
the Board at which a quorum is present shall be decisive of any motion.
(k) Other Terms and Conditions.--The Director shall authorize the
Board to hire a staff director and shall detail staff of the Patent and
Trademark Office or allow for the hiring of other staff and may pay
necessary expenses incurred by the Board in carrying out this section.
The Director shall provide technical assistance, work space,
facilities, and other amenities to facilitate the meetings and
operations of the Board. The Director, or designated staff, may attend
any such meetings and provide advice and guidance.
(l) Responsibilities of Board.--
(1) In general.--The Board shall provide recommendations to
the Director on the implementation of section 298 of title 35,
United States Code (as added by this Act), including the
appropriate royalty rates for compensating patent holders under
that section.
(2) Technical advisory panels.--The Board may convene
technical advisory panels to provide scientific, legal,
international, economic, and other information to the Board.
(m) Evaluation and Reports.--
(1) In general.--The Board shall evaluate the
implementation and administration of section 298 of title 35,
United States Code (as added by this Act), and shall provide
periodic and special reports to the Director, the Secretary of
Health and Human Services, the National Institutes of Health,
the Director of the Centers for Disease Control, and to the
Committee on the Judiciary of the Senate and the Committee on
the Judiciary of the House of Representatives.
(2) Duties.--If the Director uses the compensation method
under section 298(e)(3)(A) of title 35, United States Code (as
added by this Act), the Board shall--
(A) not later than 160 days after the date of
enactment of this Act, begin to gather information
regarding proposals for the compensation of patent
holders and shall carefully examine various
compensation options;
(B) not later than 240 days after the date of
enactment of this Act, submit preliminary
recommendations to the entities and officers described
under paragraph (1);
(C) advise the Director on various matters raised
by the Director;
(D) submit a report to the Director, the Committee
on the Judiciary of the Senate and the Committee on the
Judiciary of the House of Representatives at least once
each year on--
(i) recommendations for improving
procedures or the administration of the program
established under that section; and
(ii) other factual or policy matters which
may provide guidance or assistance to those
Committees; and
(E) submit a report to the Director and the
Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of
Representatives on--
(i) the advantages and disadvantages which
might result from allowing nongovernmental
organizations to be able to apply to obtain a
compulsory license under procedures similar to
those set forth in that section for such
countries where the national government
declines to apply for such a license, including
an analysis of whether World Trade Organization
understandings would permit such an approach
and how such an approach might be implemented;
and
(ii) whether this Act provides sufficient
economic incentives to generic companies for
the research and development of new generic
products.
(n) Petitions.--The Board shall establish procedures under which
persons may petition the Board for the purpose of evaluating various
issues related to the implementation and administration of section 298
of title 35, United States Code (as added by this Act).
(o) Confidentiality.--Any confidential business information
obtained by the Board in carrying out this section shall not be
released to the public.
(p) Appropriations.--
(1) Amounts of appropriations.--There are appropriated out
of any money in the Treasury not otherwise appropriated to the
United States Patent and Trademark Office for purposes of
carrying out paragraph (2)--
(A) $1,500,000 for the fiscal year ending September
30, 2007;
(B) $1,500,000 for the fiscal year ending September
30, 2008;
(C) $1,300,000 for the fiscal year ending September
30, 2009;
(D) $1,100,000 for the fiscal year ending September
30, 2010; and
(E) $900,000 for the fiscal year ending September
30, 2011.
(2) Use of appropriations.--Amounts appropriated under
paragraph (1) shall be used for the expenses and activities of
the Board under this section, except no more than $200,000 of
such amounts in each fiscal year may be used for the expenses
and activities of the Office established under section
298(c)(B) of title 35, United States Code (as added by this
Act). Such amounts not obligated in any fiscal year may be
carried over into subsequent fiscal years, except that any
amounts not obligated by September 30, 2011, shall be provided
to the Secretary of the Treasury to be returned to the United
States Treasury.
(q) Termination.--The Board shall terminate on September 30, 2011.
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