I
106TH CONGRESS
1ST SESSION
H. R. 2927
To amend title 35, United States Code, to provide for compulsory licensing
of certain patented inventions relating to health.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 23, 1999
Mr. BROWN of Ohio (for himself, Mr. BERRY, Mr. STARK, Mr. ALLEN, Ms.
SCHAKOWSKY, Mr. SANDERS, Mr. KUCINICH, Mr. STRICKLAND, Mr. BAR-
RETT of Wisconsin, and Mr. WYNN) introduced the following bill; which
was referred to the Committee on the Judiciary, and in addition to the
Committee on Commerce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To amend title 35, United States Code, to provide for com-
pulsory licensing of certain patented inventions relating
to health.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Affordable Prescription
Drugs Act’’.
SEC. 2. COMPULSORY LICENSING OF CERTAIN PATENTED
MEDICAL INVENTIONS.
(a) IN GENERAL.—Chapter 14 of title 35, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 158. Compulsory licensing
‘‘(a) COMPULSORY LICENSING
OF CERTAIN PAT-
ENTED MEDICAL INVENTIONS.—In the case of any sub-
ject invention relating to health in which a patent holder,
contractor, exclusive licensee, or assignee has acquired
title under this title, the Secretary of Health and Human
Services shall have the right to establish other use of the
subject matter of the patent without authorization of the
right holder if the Secretary makes the determination de-
scribed in subsection (b).
‘‘(b) DETERMINATION.—The determination of the
Secretary of Health and Human Services referred to in
subsection (a) is a determination that—
‘‘(1) the patent holder, contractor, licensee, or
assignee referred to in subsection (a) has not taken,
or is not expected to take within a reasonable time,
effective steps to achieve practical application of the
subject invention in a field of use;
‘‘(2) such compulsory license is necessary to al-
leviate health or safety needs which are not ade-
quately satisfied by the patent holder, contractor, li-
censee, or assignee; or
‘‘(3) the patented material is priced higher than
may be reasonably expected based on criteria devel-
oped by the Secretary of Commerce.
‘‘(c) FACTORS IN AUTHORIZING OTHER USE.—In ex-
ercising the right under subsection (a) to authorize other
use of the subject matter of a patent, the following shall
apply:
‘‘(1) Authorization of such use shall be consid-
ered on its individual merits.
‘‘(2) Such use may only be permitted if, prior
to such use, the proposed user has made efforts to
obtain authorization from the right holder on rea-
sonable commercial terms and conditions and that
such efforts have not been successful within a rea-
sonable period of time. This requirement may be
waived in the case of a national emergency or other
circumstances of extreme urgency or in cases of pub-
lic noncommercial use. In situations of national
emergency or other circumstances of extreme ur-
gency, the right holder shall, nevertheless, be noti-
fied as soon as reasonably practicable. In the case
of public noncommercial use, where the Government
or (if applicable) a contractor of the Government,
without making a patent search, knows or has de-
monstrable grounds to know that a valid patent is
or will be used by or for the Government, the right
holder shall be informed promptly.
‘‘(3) Such use shall be nonexclusive.
‘‘(4) Such use shall be nonassignable, except
with that part of the enterprise or goodwill which
enjoys such use.
‘‘(5) Authorization for such use shall be liable,
subject to adequate protection of the legitimate in-
terests of the persons so authorized, to be termi-
nated if and when the circumstances which led to it
cease to exist and are unlikely to recur. The com-
petent authority shall have the authority to review,
upon appropriate request, the continued existence of
such circumstances.
‘‘(6) The right holder shall be paid adequate re-
muneration in the circumstances of each case, taking
into account the economic value of the authorization.
‘‘(7) The legal validity of any decision relating
to the authorization of such use shall be subject to
judicial review or other independent review by a dis-
tinct Federal authority.
‘‘(8) Any decision relating to the remuneration
provided in respect of such use shall be subject to
judicial review or other independent review by a dis-
tinct Federal authority.
‘‘(9) The condition set forth in paragraph (2)
is not applicable where such use is permitted to rem-
edy a practice determined after judicial or adminis-
trative process to be anticompetitive. The need to
correct anticompetitive practices may be taken into
account in determining the amount of remuneration
in such cases. The competent authorities shall have
the authority to refuse termination of authorization
if and when the conditions which led to such author-
ization are likely to recur.
‘‘(10) Where such use is authorized to permit
the exploitation of a patent (‘the 2nd patent’) which
cannot be exploited without infringing another pat-
ent (‘the 1st patent’), the following additional condi-
tions shall apply:
‘‘(A) The invention claimed in the 2nd pat-
ent shall involve an important technical advance
of considerable economic significance in relation
to the invention claimed in the 1st patent.
‘‘(B) The owner of the 1st patent shall be
entitled to a cross-license on reasonable terms
to use the invention claimed in the 2nd patent.
‘‘(C) The use authorized in respect of the
1st patent shall be nonassignable except with
the assignment of the 2nd patent.
‘‘(d) CONSISTENCY
WITH
TRIPS.—Regulations
adopted under subsection (a) shall be consistent with pro-
visions of the Agreement on Trade-Related Aspects of In-
tellectual Property Rights referred to in section
101(d)(15) of the Uruguay Round Agreements Act.’’.
(b) CONFORMING AMENDMENT.—the table of con-
tents for chapter 14 of title 35, United States Code, is
amended by adding at the end the following new item:
‘‘158. Compulsory licensing.’’.
SEC. 3. REPORT ON PHARMACEUTICAL COSTS AND SALES.
(a) REPORT REQUIREMENT.—Any person engaged in
the manufacture and sale of any drug approved under sec-
tion 505 or 512 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355, 360b) for which a patent is still in
effect shall report to the Congress annually an audit of
all financial information relevant to the pricing of that
drug nationally and internationally, including the costs of
research and development, sufficient to assess the reason-
ableness of that pricing, in accordance with specifications
developed by the Secretary of Commerce in consultation
with the Commissioner of Food and Drugs.
(b) DISQUALIFICATION FROM PARTICIPATION
IN
FEDERAL PROGRAMS
AS PENALTY
FOR NONCOMPLI-
ANCE.—In the case of a person who the Secretary of Com-
merce determines has failed to submit a report required
under subsection (a) on a timely basis, the person shall
be ineligible to receive payment from the Federal Govern-
ment or under any Federal program (including under the
medicare and medicaid programs) for any prescription
drug or biologic it manufactures or sells until the date the
Secretary determines that such failure has ceased.
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