[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1708 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1708
To amend title 35, United States Code, to provide for compulsory
licensing of certain patented inventions relating to health.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 3, 2001
Mr. Brown of Ohio (for himself, Mr. Berry, Mr. Stark, Mr. Allen, Mr.
Sanders, Mr. Bonior, Ms. Lee, Mr. LaTourette, Mr. Wynn, Mr. Langevin,
Mr. Davis of Illinois, Mr. Barrett, Mr. Baldacci, Ms. Schakowsky, Mr.
Green of Texas, Mrs. Jones of Ohio, Mr. Nadler, Mr. Lewis of Georgia,
Mr. George Miller of California, and Mr. DeFazio) introduced the
following bill; which was referred to the Committee on the Judiciary,
and in addition to the Committee on Energy and Commerce, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend title 35, United States Code, to provide for compulsory
licensing of certain patented inventions relating to health.
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 ``Affordable Prescription Drugs and
Medical Inventions Act''.
SEC. 2. COMPULSORY LICENSING OF PATENTED INVENTIONS.
(a) In General.--Chapter 14 of title 35, United States Code, is
amended by adding at the end the following:
``Sec. 158. Compulsory licensing
``(a) Compulsory Licensing of Patented Inventions.--In the case of
any invention relating to health care, in which a patent holder,
contractor, exclusive licensee, or assignee has acquired title under
this title, the Secretary of Health and Human Services and the Federal
Trade Commission shall each have the right to establish other use of
the subject matter of the patent without authorization of the right
holder if the Secretary or the Commission (as the case may be) makes
the determination described in subsection (b).
``(b) Determination.--The determination referred to in subsection
(a) with respect to an invention claimed in a patent is a determination
that one or more of the following applies:
``(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) Establishing other use of the subject matter of the
patent is necessary to alleviate health or safety needs which
are not adequately satisfied by the patent holder, contractor,
licensee, or assignee.
``(3) The patent holder has engaged in anti-competitive
behavior. Such determination may include, but is not limited
to, a determination that--
``(A) the patented invention is priced excessively
relative to the median price for developed countries or
by other reasonable standards, and that such pricing
contravenes the public interest; or
``(B) the patented invention is an essential
component of a health care product that involves
patents, and the licensing terms for the patent on the
invention are not reasonable and deter innovation or
product development, contrary to the public interest.
``(4) An invention covered by a patent (the `second
patent') cannot be exploited without infringing upon the patent
described in subsection (a) (the `first patent'), insofar as
the invention claimed in the second patent involves an
important technical advance.
``(5) The invention claimed in the patent is needed for
research purposes that would benefit the public health, and is
not licensed on reasonable terms and conditions.
``(c) Factors in Authorizing Other Use.--In exercising the right
under subsection (a) to authorize other use of the subject matter of a
patent, the following shall apply:
``(1) In cases involving commercial use, such use may be
permitted only if, prior to such use, the proposed user has
made efforts to obtain authorization from the right holder on
reasonable commercial terms and conditions and such efforts
have not been successful within a reasonable period of time.
``(2) The right holder shall be paid adequate remuneration
for the use of the patent.
``(3) Where such use is authorized under subsection (b)(4),
the owner of the first patent shall be entitled to a license on
reasonable terms to use the invention claimed in the second
patent.
``(d) Considerations for Determining Remuneration for Use of a
Patent.--In determining the reasonableness of licensing terms and the
remuneration for the use of a patent under subsection (c), the
Secretary of Health and Human Services or the Federal Trade Commission
(as the case may be) shall consider--
``(1) the risks and costs associated with the invention
claimed in the patent and the commercial development of
products that use the invention;
``(2) the efficacy and innovative nature and importance to
the public health of the invention or products using the
invention;
``(3) the degree to which the invention benefited from
publicly funded research;
``(4) the need for adequate incentives for the creation and
commercialization of new inventions;
``(5) the interests of the public as patients and payers
for health care services; and
``(6) the public health benefits of expanded access to the
invention.
``(e) Consistency With TRIPS.--The Secretary of Health and Human
Services and the Federal Trade Commission may adopt regulations jointly
to implement the purposes of this section, consistent with the
Agreement on Trade-Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the Uruguay Round Agreements Act.
``(f) Definition.--In this section, the term `health care product'
means any drug or device (as those terms are defined in section 201 of
the Federal Food, Drug, and Cosmetic Act), any biological product (as
defined in section 351 of the Public Health Service Act), or any
technology or process to the extent the technology or process is
applied to health or health care.''.
(b) Conforming Amendment.--The table of contents 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 section 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 Secretary of Health and Human
Services annually an audit of all financial information relevant to the
pricing of that drug nationally and internationally, including, in
formats specified by the Secretary, an accounting of the costs
allocated to research and development of that drug, as well as costs
allocated to other research and development activities. The Secretary
shall transmit the reports filed under this subsection to the Congress.
(b) Civil Penalty.--
(1) Penalty.--Any person who fails to submit a report under
subsection (a) by the date specified pursuant to subsection (c)
shall be liable to the United States for a civil penalty in an
amount not to exceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of this
subsection, constitute a separate violation of subsection (a).
(2) Procedures.--A civil penalty for a violation of
subsection (a) shall be assessed by order of the Secretary of
Health and Human Services after opportunity (provided in
accordance with this paragraph) for a hearing in accordance
with section 554 of title 5, United States Code. Before issuing
such an order, the Secretary shall give written notice to the
person to be assessed a civil penalty under such order of the
Secretary's proposal to issue such order and provide such
person an opportunity to request, within 15 days of the date
the notice is received by such person, such a hearing on the
order.
(3) Judicial review.--Any person who requested a hearing in
accordance with paragraph (2) a hearing and who is aggrieved by
an order assessing a civil penalty pursuant to the hearing may
seek judicial review of the order by filing a petition for
judicial review in the appropriate United States district court
not later than 30 days after the date on which the order was
issued.
(4) Failure to pay penalty.--If any person fails to pay an
assessment of a civil penalty--
(A) after the order making the assessment has
become a final order and if such person does not file a
petition for judicial review of the order, or
(B) after a court in an action for judicial review
of the order has entered a final judgment in favor of
the Secretary of Health and Human Services,
the Attorney General shall recover the amount assessed (plus
interest at currently prevailing rates from the date of the
expiration of the 30-day period referred to in paragraph (3) or
the date of such final judgment, as the case may be) in an
action brought in any appropriate district court of the United
States. In such an action, the validity, amount, and
appropriateness of such penalty shall not be subject to review.
(c) Regulations.--The Secretary of Health and Human Services shall
issue such regulations as are necessary to carry out this section,
including specifying the dates by which the reports under subsection
(a) must be submitted.
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