II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Life-Saving Medicines 

3 Export Act of 2006’’. 

4 SEC. 2. PURPOSES AND FINDINGS. 

5 (a) PURPOSE.—The purpose of this Act is to promote 

6 public health by permitting the export of life-saving phar7 maceutical products and other medicines manufactured in 

8 the United States by compulsory license to residents of 

9 participating countries with insufficient or no manufac10 turing capability in the pharmaceutical sector for the 

11 product in question consistent with the General Council 

12 Decision of the World Trade Organization. 

13 (b) FINDINGS.—Congress finds the following: 

14 (1) The United States Trade Representative re15 cently announced that it ‘‘welcomes’’ the World 

16 Trade Organization amendment to ‘‘allow countries 

17 to override patent rights when necessary to export 

18 life-saving drugs to developing countries that face 

19 public health crises but cannot produce drugs for 

20 themselves.’’. United States Ambassador Portman 

21 called this ‘‘a landmark achievement that we hope 

22 will help developing countries.’’. 

23 (2) Compulsory licensing of patents is a ‘‘fix24 ture in almost all patent systems’’ in the world as 

25 noted in the Berkeley Technology Law Journal in 

26 2003. By the end of the 1950s, for example, an estiVerDate Aug 31 2005 23:12 Jun 01, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3175.IS S3175

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1 mated 40,000 to 50,000 compulsory licenses were 

2 issued regarding patents in the United States. (Ac3 cess to Patented Medicine in Developing Countries, 

4 F.M. Scherer, www.cmhealth.org/docswg4; World 

5 Health Organization). Indeed, the WHO paper notes 

6 that the ‘‘United States has led the world in issuing 

7 compulsory licenses to restore competition when vio8 lations of the antitrust laws have been found, or in 

9 the negotiated settlement of antitrust cases before 

10 full adjudication has occurred.’’ 

11 (3) The vast majority of people living in devel12 oping countries or least developed nations have lim13 ited or no access to many medicines that are saving 

14 and extending lives of those in other, more developed 

15 nations. Since sales of the patented, brand-name 

16 versions of such medicines are minimal or non-exist17 ent in many impoverished regions of the world pro18 viding generic versions of those medicines under the 

19 WTO General Council Decision will have minimal 

20 impact on the sales of brand-name, patented 

21 versions in such regions. 

22 (4) The World Health Organization has estimated that 1 23 ⁄3 of the world’s population lacks reg24 ular access to essential medicines, including 


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1 antiretroviral drugs, and that a number of essential 

2 medicines are under patent. 

3 (5) Medicines and vaccines are needed through4 out the world to combat newly arising public health 

5 threats such as the avian flu. A United States Na6 tional Intelligence Estimate in January 2000 notes 

7 that ‘‘New and emerging infectious diseases will pose 

8 a rising global health threat. . .’’. 

9 (6) Millions of people with HIV/AIDS in devel10 oping countries need antiretroviral drugs. More than 

11 40,000,000 people worldwide have HIV and 95 per12 cent of them live in developing countries. Malaria, 

13 tuberculosis, and other infectious diseases kill mil14 lions of people a year in developing nations. 

15 (7) Comprehensive reports of the World Health 

16 Organization of the United Nations, in 2004 and 

17 2005 detail the urgent need for pharmaceutical 

18 products in developing countries and in least devel19 oped nations. 

20 (8) The World Trade Organization decisions of 

21 August 30, 2003, on access to generic medicines is 

22 now being considered by member nations of the 

23 World Trade Organization for ratification as a per24 manent amendment to the WTO Agreement on 


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1 Trade Related Aspects of Intellectual Property 

2 Rights. 

3 SEC. 3. EXPORTATION OF PHARMACEUTICAL PRODUCTS 

4 FOR PUBLIC HEALTH PURPOSES. 

5 (a) IN GENERAL.—Chapter 29 of title 35, United 

6 States Code, is amended by inserting after section 297 the 

7 following: 

8 ‘‘§ 298. Exportation of pharmaceutical products for 

9 public health purposes 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) ELIGIBLE COUNTRY.—The term ‘eligible 

12 country’ means a country that— 

13 ‘‘(A)(i) is designated by the United Na14 tions as a least developed country; or 

15 ‘‘(ii) if not so designated— 

16 ‘‘(I) has certified to the General 

17 Council that the country seeks to partici18 pate in the compulsory licensing system 

19 under this section as authorized by the 

20 General Council Decision; or 

21 ‘‘(II) has certified through an official 

22 government finding if not a member of the 

23 World Trade Organization, that the coun24 try does not possess sufficient manufac25 turing capacities to produce the pharmaVerDate Aug 31 2005 23:12 Jun 01, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3175.IS S3175

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1 ceutical product that such country seeks to 

2 import under this section; 

3 ‘‘(B) has provided notice to the Director 

4 describing such lack of sufficient manufacturing 

5 capacities; and 

6 ‘‘(C) has not terminated that country’s 

7 participation in such compulsory licensing sys8 tem by certifying to the General Council or to 

9 the Director that it no longer desires to partici10 pate in such a system. 

11 ‘‘(2) GENERAL COUNCIL.—The term ‘General 

12 Council’ means the General Council of the WTO es13 tablished by paragraph (2) of Article IV of the 

14 Agreement Establishing the World Trade Organiza15 tion entered into on April 15, 1994. 

16 ‘‘(3) GENERAL COUNCIL DECISION.—The term 

17 ‘General Council Decision’ means the decision of the 

18 General Council of 30 August 2003 on the Imple19 mentation of Paragraph 6 of the Doha Declaration 

20 on the TRIPS Agreement and Public Health and the 

21 WTO General Council Chairman’s statement accom22 panying the Decision (JOB(03)/177, WT/GC/M/82) 

23 (collectively known as the ‘TRIPS/health solution’). 

24 ‘‘(4) GENERIC MANUFACTURER.—The term ‘ge25 neric manufacturer’ means, with respect to a pharVerDate Aug 31 2005 23:12 Jun 01, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3175.IS S3175

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1 maceutical product, a manufacturer that does not 

2 hold the patent to such pharmaceutical product or is 

3 not otherwise authorized by the patent holder to 

4 make use of the invention. 

5 ‘‘(5) PHARMACEUTICAL PRODUCT.—The term 

6 ‘pharmaceutical product’ means any patented prod7 uct, or pharmaceutical product, including compo8 nents of that product, manufactured through a pat9 ented process, of the pharmaceutical sector including 

10 any drug, active ingredient of a drug, diagnostic, or 

11 vaccine needed to prevent or treat potentially life 

12 threatening public health problems, including those 

13 listed in Paragraph 6 of the Doha Declaration on 

14 the TRIPS Agreement and Public Health. 

15 ‘‘(6) TRIPS AGREEMENT.—The term ‘TRIPS 

16 Agreement’ means the Agreement on Trade-Related 

17 Aspects of Intellectual Property Rights (described in 

18 section 101(d)(15) of the Uruguay Round Agree19 ments Act (19 U.S.C. 3501 note)). 

20 ‘‘(7) WORLD TRADE ORGANIZATION.—The term 

21 ‘World Trade Organization’ means the organization 

22 established pursuant to the WTO Agreement. 

23 ‘‘(8) WTO AGREEMENT.—The term ‘WTO 

24 Agreement’ means the Agreement Establishing The 


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1 World Trade Organization entered into on April 15, 

2 1994. 

3 ‘‘(9) WTO.—The term ‘WTO’ has the meaning 

4 given that term in section 2 of the Uruguay Round 

5 Agreements Act (19 U.S.C. 3501). 

6 ‘‘(10) URUGUAY ROUND AGREEMENTS.—The 

7 term ‘Uruguay Round Agreements’ has the meaning 

8 given such term in section 2(7) of the Uruguay 

9 Round Agreements Act (19 U.S.C. 3501(7)). 

10 ‘‘(b) ISSUANCE OF COMPULSORY LICENSE.—Not11 withstanding any other provision of part II or this part, 

12 and subject to subsections (c) and (d), the Director shall 

13 issue a compulsory license to a generic manufacturer of 

14 a pharmaceutical product or a patented product under this 

15 section consistent with the Life-Saving Medicines Export 

16 Act of 2006 for the purposes of— 

17 ‘‘(1) manufacturing and exporting to an eligible 

18 country, (including using nongovernmental agencies 

19 to assist in handling and distribution to eligible 

20 countries) such pharmaceutical products, including 

21 exporting for the purpose of foreign testing and cer22 tification and other activities reasonable related to 

23 such manufacturing and exporting; and 

24 ‘‘(2) such other purposes under that Act. 

25 ‘‘(c) APPLICATION FOR COMPULSORY LICENSE.— 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) SUBMISSION.—Except as provided 

3 under subsection (g), a generic manufacturer 

4 that seeks to manufacture and export a phar5 maceutical product to an eligible country (in6 cluding through the use of a nongovernmental 

7 organization) shall submit to the Director an 

8 application as developed by the Director for a 

9 compulsory license as described in this section. 

10 ‘‘(B) ASSISTANCE.—The Director shall es11 tablish an office within the Patent and Trade12 mark Office to assist— 

13 ‘‘(i) applicants under this section, in14 cluding aiding persons in identifying what 

15 patents cover which pharmaceutical prod16 ucts and in providing other advice and 

17 guidance to facilitate the filing of complete 

18 applications; and 

19 ‘‘(ii) eligible countries, nongovern20 mental organizations, or nations likely to 

21 become eligible countries, identify compa22 nies in the United States which could pro23 vide pharmaceutical products under this 

24 section to such countries. 


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1 ‘‘(2) CONTENT OF APPLICATION.—The Director 

2 shall approve an application submitted under para3 graph (1) if such application contains— 

4 ‘‘(A) the name of the pharmaceutical prod5 uct to be manufactured and exported under the 

6 license; 

7 ‘‘(B) an estimate of the quantities of the 

8 pharmaceutical product to be manufactured and 

9 exported under the license and a stipulation 

10 that the amount manufactured and exported 

11 shall not exceed the amount necessary to meet 

12 the needs of the eligible country; 

13 ‘‘(C) for each patented invention to which 

14 the application relates— 

15 ‘‘(i) the name of the patent holder 

16 and the applicable patent number; or 

17 ‘‘(ii) a statement by the applicant on 

18 information and belief of the name of the 

19 patent holder and applicable patent num20 ber; 

21 ‘‘(D) the name of the eligible country to 

22 which the pharmaceutical product will be ex23 ported and the name of any nongovernmental 

24 organization which will assist in the effort; 


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1 ‘‘(E)(i) copies of the notifications of the el2 igible countries that are member countries of 

3 the WTO, as defined in the General Council 

4 Decision, made to the Council for TRIPS re5 garding notifications set forth under 2(a) of 

6 such Decision; and 

7 ‘‘(ii) for eligible countries that are not 

8 member countries of the WTO, a copy of the in9 formation required by the notification as set 

10 forth under 2(a) of such Decision published on 

11 a public website and the address of such 

12 website; 

13 ‘‘(F) a copy of a written request for a vol14 untary license sent by registered mail to each 

15 patent holder, which shall have occurred during 

16 a period of at least 60 days before the submis17 sion of the application to the Director, and a 

18 brief description of any subsequent negotia19 tions; 

20 ‘‘(G) copies of— 

21 ‘‘(i) notifications required under the 

22 General Counsel Decision; 

23 ‘‘(ii) the name of the authorized des24 ignated official of the eligible country, or a 

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1 ized to assist in the distribution of phar2 maceutical products— 

3 ‘‘(I) from whom the generic man4 ufacturer has received a specific re5 quest for a pharmaceutical product 

6 and is taking steps to prepare such 

7 product or related products; or 

8 ‘‘(II) with whom the generic 

9 manufacturer has reached an agree10 ment to manufacture and export the 

11 pharmaceutical product; or 

12 ‘‘(iii) a copy of a valid license, other 

13 authorization, or communication issued by 

14 a potential eligible country permitting im15 port of the pharmaceutical product from 

16 the United States; and 

17 ‘‘(H) an agreement or understanding en18 tered into by the applicant to comply with the 

19 conditions described under subsection (d) and 

20 with the provisions of the General Council Deci21 sions; and 

22 ‘‘(I) any additional information reasonably 

23 required by the Director, including information 

24 necessary to ensure the identification of the 

25 product that is the subject of the application. 


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1 ‘‘(3) COMBINED LICENSE APPLICATIONS.—The 

2 Director may— 

3 ‘‘(A) establish procedures to permit a com4 bined license application from more than 1 eli5 gible country; 

6 ‘‘(B) issue a multi-country license if appro7 priate; 

8 ‘‘(C) issue rules based on the requirements 

9 of this section relating to separate country ap10 plicants, in consultation with the National Advi11 sory Board on Implementation of the General 

12 Council Decision established under section 5 of 

13 the Life-Saving Medicines Export Act of 2006, 

14 except for modifications made to accommodate 

15 applying the rules for 1 country to applications 

16 filed by more than 1 eligible country in the 

17 same filing; and 

18 ‘‘(D) waive any record keeping, applica19 tion, or related provision of this subsection to 

20 the extent necessary to implement this para21 graph for any combined application from mul22 tiple countries. 

23 ‘‘(4) ACTION BY DIRECTOR.— 


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1 ‘‘(A) IN GENERAL.—Not later than 60 

2 days after the submission of an application, the 

3 Director shall approve or deny that application. 

4 ‘‘(B) CONDITIONAL DENIAL.—The Direc5 tor may deny an application and request addi6 tional information or evidence to be submitted 

7 within 30 days after making the request. If ad8 ditional information or evidence is submitted 

9 within the 30-day period, the Director shall 

10 make a final approval or denial of the applica11 tion within 60 days after the date of submission 

12 of the additional information or evidence. 

13 ‘‘(5) APPEAL OF DENIAL.—An applicant may 

14 seek review of a final adverse decision of the Direc15 tor, including any adverse decision based on failure 

16 to comply with any provision of paragraph (2) in the 

17 United States Court of Appeals for the Federal Cir18 cuit. The judgement of such court shall be subject 

19 to final review by the Supreme Court upon certiorari 

20 in the manner prescribed in section 1254 of title 28. 

21 The United States Court of Appeals for the Federal 

22 Circuit shall decide all relevant questions of law, 

23 provide appropriate orders, relief, or judgments, and 

24 shall hold unlawful and set aside any determination 

25 of the Director that the court finds to be— 


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1 ‘‘(A) arbitrary, capricious, an abuse of dis2 cretion, inconsistent with this section, or other3 wise not in accordance with law; 

4 ‘‘(B) contrary to constitutional right, 

5 power, privilege, or immunity; 

6 ‘‘(C) in excess of statutory jurisdiction, au7 thority, or limitations, or in violation of a statu8 tory right; or 

9 ‘‘(D) without observance of procedure re10 quired by law. 

11 ‘‘(d) CONDITIONS OF LICENSE.—Under rules issued 

12 by the Director, the following conditions shall apply to a 

13 compulsory license issued under this section: 

14 ‘‘(1) The pharmaceutical product— 

15 ‘‘(A) shall be a generic version of a pat16 ented product approved as safe and efficacious 

17 by the World Health Organization of the 

18 United Nations or the United States Food and 

19 Drug Administration; and 

20 ‘‘(B) shall be manufactured solely for ex21 port to the eligible country listed in the applica22 tion under subsection (c); and 

23 ‘‘(C) shall not be exported to any other 

24 country except for nation parties to a regional 


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1 trade agreement as set forth in paragraph 6(i) 

2 of the General Council Decision. 

3 ‘‘(2) The pharmaceutical product, or the label 

4 or packaging of the pharmaceutical product, for ex5 port shall be— 

6 ‘‘(A) clearly identified as being produced 

7 under the system set out in the General Council 

8 Decision; and 

9 ‘‘(B) distinguished from the pharma10 ceutical product or its label or packaging manu11 factured by the patent holder through labeling, 

12 shaping, sizing, marking, special packaging, or 

13 other means or combinations of means, which 

14 shall be consistent with paragraph 2(b)(ii) of 

15 the General Council Decision and include— 

16 ‘‘(i) a statement that such pharma17 ceutical product has been manufactured 

18 solely for export to the specific eligible 

19 country or to nation parties to a regional 

20 trade agreement as provided for in para21 graphs 6(i) and 6(ii) of the General Coun22 cil Decision and is not approved for mar23 keting in the United States; 

24 ‘‘(ii) a statement indicating that the 

25 pharmaceutical product is subject to a 


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1 compulsory license issued to the generic 

2 manufacturer; and 

3 ‘‘(iii) any other markings determined 

4 appropriate by the Director to distinguish 

5 such pharmaceutical product from the pat6 ented pharmaceutical product, which may 

7 include a different trademark name or dis8 tinctive color or shaping, so long as— 

9 ‘‘(I) such distinction is feasible 

10 and does not have a significant impact 

11 on price and will not undermine the 

12 humanitarian purposes of the Life13 Saving Medicines Export Act of 2006; 

14 and 

15 ‘‘(II) the Director may tempo16 rarily waive the requirements of the 

17 distinguishing marks under urgent 

18 circumstances for limited quantities of 

19 such pharmaceutical products. 

20 ‘‘(3) The term of such compulsory license shall 

21 expire on the date that is the earliest of— 

22 ‘‘(A) 7 years after the date of issuance of 

23 the license; 

24 ‘‘(B) the date the importing country is no 

25 longer an eligible country; or 


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1 ‘‘(C) on a petition from the original patent 

2 holder, on the date that the Director, in con3 sultation with the National Advisory Board on 

4 Implementation of the General Council Decision 

5 established under section 5 of the Life-Saving 

6 Medicines Export Act of 2006, determines that 

7 the circumstances that have led to the granting 

8 of the license cease to exist and it appears prob9 able that such circumstances will not reoccur. 

10 ‘‘(4) The licensee shall keep accurate records of 

11 all quantities of products manufactured and distrib12 uted under its license and shall make such records 

13 available upon request to an independent person 

14 agreed to by the parties, or otherwise approved by 

15 the Director, for the sole purpose of ensuring wheth16 er the terms of the license have been met. 

17 ‘‘(5) A generic manufacturer issued a license 

18 under this section may notify the Director if the es19 timated quantity of the pharmaceutical product set 

20 forth in the application and subsection (c)(2)(B) will 

21 be insufficient to meet the projected need during the 

22 remainder of the license period. The Director shall 

23 adjust the estimated quantity to the quantity pro24 posed by the licensee unless compelling evidence 


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1 demonstrates that the proposed quantity is exces2 sive. 

3 ‘‘(e) COMPENSATION TO PATENT HOLDER.— 

4 ‘‘(1) IN GENERAL.—The holder of a compulsory 

5 license under this section shall pay to the patent 

6 holder a royalty in an amount and by a date deter7 mined by the Director that shall not be— 

8 ‘‘(A) earlier than the date of each ship9 ment for export of the pharmaceutical product 

10 under the compulsory license; or 

11 ‘‘(B) later than 45 days after the date of 

12 each shipment. 

13 ‘‘(2) AMOUNT OF ROYALTY.—In consultation 

14 with the Secretary of Health and Human Services, 

15 the Director of the National Institutes of Health, 

16 the Director of the United States Agency for Inter17 national Development, and the Director of the Cen18 ters of Disease Control, the Director, when deter19 mining a royalty amount under paragraph (1), shall 

20 consider the following: 

21 ‘‘(A) The provisions of paragraph 3 of the 

22 General Council Decision and the need for the 

23 licensee under this section to make a reasonable 

24 return sufficient to sustain a continued partici25 pation in humanitarian objectives. 

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1 ‘‘(B) The humanitarian and noncommer2 cial reasons for issuing a compulsory license 

3 under this section. 

4 ‘‘(C) The economic value to the importing 

5 country of the use that has been authorized by 

6 the Director. 

7 ‘‘(D) The need for low-cost pharmaceutical 

8 products by persons in eligible countries. 

9 ‘‘(E) Whether the importing country has a 

10 patent applicable to the pharmaceutical product 

11 sought to be imported under this section. 

12 ‘‘(F) The ordinary levels of profitability in 

13 the United States, of commercial agreements 

14 involving pharmaceutical products, and any rel15 evant international trends in relevant prices as 

16 reported by the United Nations or other appro17 priate humanitarian organizations or agencies 

18 for the supply of such products for humani19 tarian purposes. 

20 ‘‘(3) ROYALTY RATE FORMULAS.— 

21 ‘‘(A) IN GENERAL.— 

22 ‘‘(i) FACTORS.—Except as provided in 

23 subparagraph (B), the amount of the roy24 alty payable to any patentee under this 

25 subsection— 


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1 ‘‘(I) shall be based on consider2 ations under paragraph (2); and 

3 ‘‘(II) shall not exceed the amount 

4 determined by multiplying the com5 mercial value of the pharmaceutical 

6 product to be exported under the sup7 ply agreement by 4 percent. 

8 ‘‘(ii) MULTIPLE PATENTEES.—If more 

9 than 1 patentee is due a royalty for a 

10 pharmaceutical product under this section, 

11 the amount of the royalty payable for the 

12 pharmaceutical product shall be divided by 

13 the number of patentees. 

14 ‘‘(B) ALTERNATIVE ROYALTY RATE FOR15 MULA.— 

16 ‘‘(i) IN GENERAL.— 

17 ‘‘(I) ESTABLISHMENT AND

18 USE.—Subject to subclause (II), the 

19 Director may establish and use an al20 ternative royalty rate formula under 

21 this subparagraph instead of the roy22 alty rate formula under subparagraph 

23 (A), if— 

24 ‘‘(aa) the Director makes a 

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1 native royalty rate formula is 

2 more appropriate or efficient to 

3 employ; and 

4 ‘‘(bb) the alternative royalty 

5 rate formula is based on the 

6 methodology described under 

7 clauses (ii) through (v). 

8 ‘‘(II) LIMITATION.—If the roy9 alty amount determined under the al10 ternative royalty rate formula under 

11 subclause (I) exceeds the dollar 

12 amount determined by multiplying the 

13 commercial value of the pharma14 ceutical product to be exported under 

15 the supply agreement by 4 percent the 

16 royalty amount shall be set at such 

17 dollar amount. 

18 ‘‘(ii) HUMAN DEVELOPMENT INDEX

19 COUNTRIES.—If the name of the country 

20 to which a pharmaceutical product is to be 

21 delivered under this section is on the 

22 Human Development Index maintained by 

23 the United Nations Development Program, 

24 the rate for calculation of the royalty to be 


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1 paid to any patentee shall be determined 

2 by— 

3 ‘‘(I) adding 1 to the total number 

4 of countries listed on such Index; 

5 ‘‘(II) subtracting from the sum 

6 determined under subclause (I) the 

7 numerical rank on the Index of the 

8 country to which the pharmaceutical 

9 product is to be exported; 

10 ‘‘(III) dividing the difference de11 termined under subclause (II) by the 

12 total number of countries listed on the 

13 Index; and 

14 ‘‘(IV) multiplying the quotient 

15 determined under subclause (III) by 

16 0.04. 

17 ‘‘(iii) SINGLE AND MULTIPLE PAT18 ENTEES.—For a country described under 

19 clause (ii), the amount of the royalty pay20 able to any patentee shall be determined— 

21 ‘‘(I) if there is only 1 patentee, 

22 by multiplying the total monetary 

23 value of the agreement pertaining to 

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1 alty rate determined in accordance 

2 with clause (ii); and 

3 ‘‘(II) if there is more than 1 pat4 entee, by dividing the amount deter5 mined under subclause (I) by the 

6 number of patentees. 

7 ‘‘(iv) COUNTRIES NOT ON HUMAN DE8 VELOPMENT INDEX.—If the name of the 

9 country to which a pharmaceutical product 

10 is to be delivered under this section is not 

11 on the Human Development Index main12 tained by the United Nations Development 

13 Program, the Director shall— 

14 ‘‘(I) determine if relevant cir15 cumstances in that country are rea16 sonably similar to another country on 

17 that Human Development Index; 

18 ‘‘(II) if determining a similar 

19 country under subclause (I), use the 

20 procedures under clause (ii) to deter21 mine a royalty payment using the nu22 merical rank of that other country; 

23 and 

24 ‘‘(III) if determining a royalty 

25 rate under subclause (II), state the 


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1 reasons for making the determination 

2 that the country to which the product 

3 is to be exported was reasonably simi4 lar to the country on such Index used 

5 in the calculation. 

6 ‘‘(v) REGIONAL TRADE AGREE7 MENTS.—If the Director knows during re8 view of an application that the pharma9 ceutical products are to be delivered under 

10 this section to parties to a regional trade 

11 agreement where re-exportation is allowed 

12 under paragraph 6(i) and (ii) of the Gen13 eral Council Decision, the Director shall— 

14 ‘‘(I) determine if relevant cir15 cumstances in those countries are rea16 sonably similar to a country on the 

17 Human Development Index; 

18 ‘‘(II) if determining a similar 

19 country under subclause (I), use the 

20 procedures under clause (ii) to deter21 mine a royalty payment based on the 

22 numerical rank of that other country; 

23 and 

24 ‘‘(III) if determining a royalty 

25 rate under subclause (III), shall state 


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1 the reasons for making the determina2 tion that the countries to which the 

3 products are to be re-exported under 

4 paragraph 6(i) and (ii) of such Deci5 sion were reasonably similar to the 

6 country selected on such Index. 

7 ‘‘(4) NOTICE OF SHIPMENTS.—Before each 

8 shipment of any product manufactured under this 

9 section, the manufacturer shall, within 15 days be10 fore such product is exported, provide notice through 

11 registered mail specifying the approximate quantity 

12 to be exported to— 

13 ‘‘(A) the patentee; 

14 ‘‘(B) the purchaser of the product; and 

15 ‘‘(C) the Director. 

16 ‘‘(f) RENEWAL OF COMPULSORY LICENSE.— 

17 ‘‘(1) IN GENERAL.—A generic manufacturer 

18 that is the holder of a compulsory license under this 

19 section may submit to the Director an application to 

20 renew the compulsory license. 

21 ‘‘(2) CONTENT OF RENEWAL APPLICATION.— 

22 An application under paragraph (1) shall contain— 

23 ‘‘(A) an assurance that the quantities of 

24 the pharmaceutical product authorized to be ex25 ported under the renewal compulsory license 


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1 will not be exported before such original com2 pulsory license ceases to be valid; 

3 ‘‘(B) an assurance that the applicant has 

4 complied with the terms, conditions, and royalty 

5 payment required under this section; and 

6 ‘‘(C) any other information that the Direc7 tor may reasonably require. 

8 ‘‘(3) TIMING OF RENEWAL.—An application for 

9 renewal shall be submitted to the Director not later 

10 than 45 days before the expiration date of the com11 pulsory license. 

12 ‘‘(4) TERM OF RENEWAL.—The term of a re13 newed compulsory license shall not exceed the term 

14 of the original compulsory license. 

15 ‘‘(5) LIMITATION.—A compulsory license may 

16 not be renewed more than once. 

17 ‘‘(g) EFFECT OF SECTION.—To the extent authorized 

18 in Article 31(b) of the TRIPS Agreement, nothing in this 

19 section shall be construed as requiring an effort to obtain 

20 a voluntary license in the event of— 

21 ‘‘(1) a national emergency or other cir22 cumstances of extreme urgency in the eligible coun23 try; or 

24 ‘‘(2) a public noncommercial governmental use. 


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1 ‘‘(h) EMERGENCIES AND CIRCUMSTANCES OF EX2 TREME URGENCY.— 

3 ‘‘(1) EXPEDITED APPROVAL.— 

4 ‘‘(A) IN GENERAL.—The Director may 

5 provide approval on an expedited basis for a 

6 limited period of time to grant a compulsory li7 cense regarding a pharmaceutical product to a 

8 generic manufacturer to address a national 

9 emergency or other circumstances of extreme 

10 urgency under such expedited procedures as the 

11 Director determines appropriate. 

12 ‘‘(B) PROCEDURES.—Procedures under 

13 this paragraph may include— 

14 ‘‘(i) waiving any requirement to seek 

15 a voluntary license from the patent holder; 

16 and 

17 ‘‘(ii) delaying the determination of 

18 compensation until after an approval is 

19 made. 

20 ‘‘(2) WAIVER.—In carrying out expedited ap21 provals under this subsection, the Director may tem22 porarily waive any provision of this section. 

23 ‘‘(i) NOTIFICATION TO WTO.—The Director shall no24 tify the WTO of the issuance, termination, or renewal of 

25 a compulsory license under this section and of the name 


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1 and address of the licensee, the product for which the li2 cense has been granted, the quantities for which it has 

3 been granted, and the countries to which the product is 

4 to be supplied.’’. 

5 (b) ESTABLISHMENT OF PROCEDURES.— 

6 (1) IN GENERAL.—The Under Secretary of 

7 Commerce for Intellectual Property and Director of 

8 the United States Patent and Trademark Office (re9 ferred to in this section as the ‘‘Director’’) shall es10 tablish procedures for implementing this Act and the 

11 amendments made by this Act. 

12 (2) REPORT.—The Director shall annually sub13 mit to the Committee on the Judiciary of the Senate 

14 and the Committee on the Judiciary of the House of 

15 Representatives a report that describes the activities 

16 related to the implementation of this Act and the 

17 amendments made by this Act. 

18 (3) REGULATIONS.—The Director may issue 

19 such regulations as are necessary and appropriate to 

20 carry out this Act and the amendments made by this 

21 Act. 

22 (c) TECHNICAL AND CONFORMING AMENDMENT.— 

23 The table of sections for chapter 29 of title 35, United 

24 States Code, is amended by adding after the item relating 

25 to section 297 the following: 

‘‘298. Exportation of pharmaceutical products for public health purposes.’’. 


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1 SEC. 4. NONINFRINGEMENT OF PATENT. 

2 Section 271 of title 35, United States Code, is 

3 amended— 

4 (1) by redesignating subsections (h) and (i) as 

5 subsections (i) and (j), respectively; and 

6 (2) by inserting after subsection (g) the fol7 lowing: 

8 ‘‘(h)(1) It shall not be an act of infringement to man9 ufacture within the United States or for export outside 

10 the United States any patented invention relating to a 

11 pharmaceutical product (as defined under section 298) by 

12 any person that— 

13 ‘‘(A) is issued a compulsory license to manufac14 ture and sell that drug under section 298; and 

15 ‘‘(B) manufactures and exports that drug in 

16 compliance with all conditions of that license. 

17 ‘‘(2) Subsection (d) (4) or (5) shall not apply to any 

18 patent affected by a license described under paragraph (1) 

19 of this subsection.’’. 

20 SEC. 5. NATIONAL ADVISORY BOARD ON IMPLEMENTATION 

21 OF THE GENERAL COUNCIL DECISION. 

22 (a) DEFINITIONS.—In this section: 

23 (1) BOARD.—The term ‘‘Board’’ means the Na24 tional Advisory Board on Implementation of the 

25 General Council Decision established under this sec26 tion. 


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1 (2) DIRECTOR.—The term ‘‘Director’’ means 

2 the Under Secretary of Commerce for Intellectual 

3 Property and Director of the United States Patent 

4 and Trademark Office. 

5 (3) ELIGIBLE COUNTRY.—The term ‘‘eligible 

6 country’’ means a country that— 

7 (A)(i) is designated by the United Nations 

8 as a least developed country; or 

9 (ii) if not so designated, does not possess 

10 sufficient manufacturing capacities to produce 

11 the pharmaceutical product that such country 

12 seeks to import under section 298 of title 35, 

13 United States Code (as added by this Act); and 

14 (B) has provided notice to the Director de15 scribing such lack of sufficient manufacturing 

16 capacities. 

17 (4) GENERAL COUNCIL.—The term ‘‘General 

18 Council’’ means the General Council of the WTO es19 tablished by paragraph (2) of Article IV of the 

20 Agreement Establishing the World Trade Organiza21 tion entered into on April 15, 1994. 

22 (5) GENERAL COUNCIL DECISION.—The term 

23 ‘‘General Council Decision’’ means the decision of 

24 the General Council of 30 August 2003 on the Im25 plementation of Paragraph 6 of the Doha DeclaraVerDate Aug 31 2005 23:12 Jun 01, 2006 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S3175.IS S3175

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1 tion on the TRIPS Agreement and Public Health 

2 and the WTO General Council Chairman’s state3 ment accompanying the Decision (JOB(03)/177, 

4 WT/GC/M/82) (collectively known as the ‘‘TRIPS/ 

5 health solution’’). 

6 (6) GENERIC MANUFACTURER.—The term ‘‘ge7 neric manufacturer’’ means, with respect to a phar8 maceutical product, a manufacturer that does not 

9 hold the patent to such pharmaceutical product or is 

10 not otherwise authorized by the patent holder to 

11 make use of the invention. 

12 (7) PHARMACEUTICAL PRODUCT.—The term 

13 ‘‘pharmaceutical product’’ means any patented phar14 maceutical product, or pharmaceutical product man15 ufactured through a patented process, including any 

16 drug, active ingredient of a drug, diagnostic, or vac17 cine needed to prevent or treat public health prob18 lems. 

19 (8) TRIPS AGREEMENT.—The term ‘‘TRIPS 

20 Agreement’’ means the Agreement on Trade-Related 

21 Aspects of Intellectual Property Rights (described in 

22 section 101(d)(15) of the Uruguay Round Agree23 ments Act (19 U.S.C. 3501 note)). 


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1 (9) WORLD TRADE ORGANIZATION.—The term 

2 ‘‘World Trade Organization’’ means the organization 

3 established pursuant to the WTO Agreement. 

4 (10) WTO AGREEMENT.—The term ‘‘WTO 

5 Agreement’’ means the Agreement Establishing The 

6 World Trade Organization entered into on April 15, 

7 1994. 

8 (11) WTO.—The term ‘‘WTO’’ has the mean9 ing given that term in section 2 of the Uruguay 

10 Round Agreements Act (19 U.S.C. 3501). 

11 (12) URUGUAY ROUND AGREEMENTS.—The 

12 term ‘‘Uruguay Round Agreements’’ has the mean13 ing given such term in section 2(7) of the Uruguay 

14 Round Agreements Act (19 U.S.C. 3501(7)). 

15 (b) ESTABLISHMENT.—The Director shall establish 

16 the National Advisory Board on Implementation of the 

17 General Council Decision in accordance with the Federal 

18 Advisory Committee Act (5 U.S.C. App.) to provide advice 

19 and guidance regarding the implementation and adminis20 tration of the compulsory licensing program established 

21 under section 298 of title 35, United States Code (as 

22 added by this Act), including royalty amounts to be deter23 mined under that section. 

24 (c) COMPOSITION OF THE BOARD.—The Board shall 

25 be composed of 10 members, of which— 


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1 (1) 1 shall be an individual who is an academic 

2 expert on the subject of pharmaceutical matters and 

3 patent law; 

4 (2) 2 shall be an individual with expertise relat5 ing to the WTO, the TRIPS/health solution, and the 

6 General Council Decision; 

7 (3) 2 shall be an individual with expertise relat8 ing to the needs of persons living in least-developed 

9 and developing nations with respect to access to low10 cost patented pharmaceutical products; 

11 (4) 2 shall be individuals who represent inter12 national organizations, such as the United Nations, 

13 the World Bank, international nongovernmental or14 ganizations, and religious faiths, and who have ex15 pert knowledge regarding the General Council Deci16 sion and the issues raised by that decision; 

17 (5) 1 shall be a physician with experience in 

18 treating persons with HIV/AIDS, malaria, tuber19 culosis, or other infectious diseases; 

20 (6) 1 shall be an individual representing major 

21 pharmaceutical manufacturers in the United States; 

22 and 

23 (7) 1 shall be an individual representing major 

24 generic manufacturers of pharmaceutical products in 

25 the United States. 


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1 (d) APPOINTMENTS.—Not later than 120 days after 

2 the date of enactment of this Act, the Director, in con3 sultation with the Director of the National Institutes of 

4 Health (or a designee), the Director of the United States 

5 Agency for International Development (or a designee), and 

6 the Director of the Centers for Disease Control (or a des7 ignee) shall appoint— 

8 (1) the members of the Board described under 

9 subsection (c)(1), (5), (6), and (7)— 

10 (A) from nominations received from a re11 quest for applications published in the Federal 

12 Register; and 

13 (B) after engaging in other efforts to make 

14 institutions of higher education within the 

15 United States, international organizations, and 

16 groups representing the medical profession 

17 aware of the solicitation for nominations; 

18 (2) 1 member of the Board described under 

19 subsection (c)(2), from recommendations of the Ma20 jority Leader of the Senate; 

21 (3) 1 member of the Board described under 

22 subsection (c)(2), from recommendations of the Mi23 nority Leader of the Senate; 


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1 (4) 1 member of the Board described under 

2 subsection (c)(3) from recommendations of the 

3 Speaker of the House of Representatives; 

4 (5) 1 member of the Board described under 

5 subsection (c)(3) from recommendations of the Mi6 nority Leader of the House of Representatives; and 

7 (6) 2 members of the Board described under 

8 subsection (c)(4) from recommendations of the Sec9 retary of State in consultation with the United 

10 States Ambassador to the United Nations. 

11 (e) TERM.—A member of the Board shall serve for 

12 a term of 4 years, except that the Director shall appoint 

13 the original members of the Board for staggered terms 

14 of not more than 4 years. A member may not serve a con15 secutive term unless such member served an original term 

16 that was less than 4 years. 

17 (f) MEETINGS.—The Director shall convene— 

18 (1) a meeting of the Board not later than 60 

19 days after the appointment of its members; 

20 (2) subsequent meetings on a periodic basis; 

21 and 

22 (3) at least 2 meetings a year during the first 

23 4 years after the date of enactment of this Act. 

24 (g) COMPENSATION AND EXPENSES.—A member of 

25 the Board shall serve without compensation. While away 


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1 from their homes or regular places of business on the busi2 ness of the Board, members of the Board may be allowed 

3 travel expenses, including per diem in lieu of subsistence, 

4 as is authorized under section 5703 of title 5, United 

5 States Code, for persons employed intermittently in the 

6 Government service. 

7 (h) CHAIRPERSON.—The Board shall select a chair8 person for the Board. 

9 (i) QUORUM.—A majority of the members of the 

10 Board shall constitute a quorum for the purpose of con11 ducting business. 

12 (j) DECISIVE VOTES.—Two-thirds of the votes cast 

13 at a meeting of the Board at which a quorum is present 

14 shall be decisive of any motion. 

15 (k) OTHER TERMS AND CONDITIONS.—The Director 

16 shall authorize the Board to hire a staff director and shall 

17 detail staff of the Patent and Trademark Office or allow 

18 for the hiring of other staff and may pay necessary ex19 penses incurred by the Board in carrying out this section. 

20 The Director shall provide technical assistance, work 

21 space, facilities, and other amenities to facilitate the meet22 ings and operations of the Board. The Director, or des23 ignated staff, may attend any such meetings and provide 

24 advice and guidance. 

25 (l) RESPONSIBILITIES OF BOARD.— 


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1 (1) IN GENERAL.—The Board shall provide rec2 ommendations to the Director on the implementation 

3 of section 298 of title 35, United States Code (as 

4 added by this Act), including the appropriate royalty 

5 rates for compensating patent holders under that 

6 section. 

7 (2) TECHNICAL ADVISORY PANELS.—The 

8 Board may convene technical advisory panels to pro9 vide scientific, legal, international, economic, and 

10 other information to the Board. 

11 (m) EVALUATION AND REPORTS.— 

12 (1) IN GENERAL.—The Board shall evaluate the 

13 implementation and administration of section 298 of 

14 title 35, United States Code (as added by this Act), 

15 and shall provide periodic and special reports to the 

16 Director, the Secretary of Health and Human Serv17 ices, the National Institutes of Health, the Director 

18 of the Centers for Disease Control, and to the Com19 mittee on the Judiciary of the Senate and the Com20 mittee on the Judiciary of the House of Representa21 tives. 

22 (2) DUTIES.—If the Director uses the com23 pensation method under section 298(e)(3)(A) of title 

24 35, United States Code (as added by this Act), the 

25 Board shall— 


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1 (A) not later than 160 days after the date 

2 of enactment of this Act, begin to gather infor3 mation regarding proposals for the compensa4 tion of patent holders and shall carefully exam5 ine various compensation options; 

6 (B) not later than 240 days after the date 

7 of enactment of this Act, submit preliminary 

8 recommendations to the entities and officers de9 scribed under paragraph (1); 

10 (C) advise the Director on various matters 

11 raised by the Director; 

12 (D) submit a report to the Director, the 

13 Committee on the Judiciary of the Senate and 

14 the Committee on the Judiciary of the House of 

15 Representatives at least once each year on— 

16 (i) recommendations for improving 

17 procedures or the administration of the 

18 program established under that section; 

19 and 

20 (ii) other factual or policy matters 

21 which may provide guidance or assistance 

22 to those Committees; and 

23 (E) submit a report to the Director and 

24 the Committee on the Judiciary of the Senate 


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1 and the Committee on the Judiciary of the 

2 House of Representatives on— 

3 (i) the advantages and disadvantages 

4 which might result from allowing non5 governmental organizations to be able to 

6 apply to obtain a compulsory license under 

7 procedures similar to those set forth in 

8 that section for such countries where the 

9 national government declines to apply for 

10 such a license, including an analysis of 

11 whether World Trade Organization under12 standings would permit such an approach 

13 and how such an approach might be imple14 mented; and 

15 (ii) whether this Act provides suffi16 cient economic incentives to generic compa17 nies for the research and development of 

18 new generic products. 

19 (n) PETITIONS.—The Board shall establish proce20 dures under which persons may petition the Board for the 

21 purpose of evaluating various issues related to the imple22 mentation and administration of section 298 of title 35, 

23 United States Code (as added by this Act). 


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1 (o) CONFIDENTIALITY.—Any confidential business 

2 information obtained by the Board in carrying out this 

3 section shall not be released to the public. 

4 (p) APPROPRIATIONS.— 

5 (1) AMOUNTS OF APPROPRIATIONS.—There are 

6 appropriated out of any money in the Treasury not 

7 otherwise appropriated to the United States Patent 

8 and Trademark Office for purposes of carrying out 

9 paragraph (2)— 

10 (A) $1,500,000 for the fiscal year ending 

11 September 30, 2007; 

12 (B) $1,500,000 for the fiscal year ending 

13 September 30, 2008; 

14 (C) $1,300,000 for the fiscal year ending 

15 September 30, 2009; 

16 (D) $1,100,000 for the fiscal year ending 

17 September 30, 2010; and 

18 (E) $900,000 for the fiscal year ending 

19 September 30, 2011. 

20 (2) USE OF APPROPRIATIONS.—Amounts ap21 propriated under paragraph (1) shall be used for the 

22 expenses and activities of the Board under this sec23 tion, except no more than $200,000 of such amounts 

24 in each fiscal year may be used for the expenses and 

25 activities of the Office established under section 


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1 298(c)(B) of title 35, United States Code (as added 

2 by this Act). Such amounts not obligated in any fis3 cal year may be carried over into subsequent fiscal 

4 years, except that any amounts not obligated by 

5 September 30, 2011, shall be provided to the Sec6 retary of the Treasury to be returned to the United 

7 States Treasury. 

8 (q) TERMINATION.—The Board shall terminate on 

9 September 30, 2011. 

Æ 


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