[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 4040 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 4040

 To ensure that innovations developed at federally-funded institutions 
 are available in certain developing countries at the lowest possible 
                                 cost.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2006

   Mr. Leahy introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To ensure that innovations developed at federally-funded institutions 
 are available in certain developing countries at the lowest possible 
                                 cost.

    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 ``Public Research in the Public 
Interest Act of 2006''.

SEC. 2. PURPOSE AND FINDINGS.

    (a) Purpose.--The purpose of this Act is to promote global public 
health and America's national security by ensuring that innovations 
developed at federally-funded institutions are available in eligible 
developing countries at the lowest possible cost.
    (b) Findings.--Congress finds the following:
            (1) It is in the national interest of the United States 
        that people around the world live healthier lives, and that 
        they perceive the United States in a more favorable light.
            (2) The United States Government funds a major portion of 
        all academic research.
            (3) Congress funds universities and Federal research 
        laboratories as institutions dedicated to the creation and 
        dissemination of knowledge in the public interest.
            (4) The Federal Government's investment in science and 
        technology fuels a thriving pharmaceutical industry and rising 
        longevity and quality of life in the United States. In 2000, a 
        Senate Joint Economic Committee Report found that public 
        research was instrumental in developing 15 of the 21 drugs 
        considered by experts to have had the highest therapeutic 
        impact on society.
            (5) 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.
            (6) The World Health Organization (``WHO'') has estimated 
        that \1/3\ of the world's population lacks regular access to 
        essential medicines, including antiretroviral drugs. The WHO 
        reported that just by improving access to existing medicines 
        roughly 10,000,000 lives could be saved around the world every 
        year.
            (7) To help address the access to medicines crisis, the 
        World Health Organization's 2006 Commission on Intellectual 
        Property Rights, Innovation, and Public Health recommended that 
        universities adopt licensing practices designed to increase 
        access to medicines in developing countries.
            (8) The Department of State has reported to Congress under 
        the President's Emergency Plan for AIDS Relief that, ``[I]n 
        every case generics prices present an opportunity for cost 
        savings; in some cases, the branded price per pack of a drug is 
        up to 11 times the cost of the approved generic version.''.
            (9) Since sales of the patented, brand-name versions of 
        such medicines are minimal or non-existent in many impoverished 
        regions of the world, allowing generic versions of those 
        medicines will have minimal impact on the sales of brand-name, 
        patented versions in such regions, or the licensing revenues of 
        publicly funded research institutions, while saving an untold 
        number of lives.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Associated medical product.--The term ``associated 
        medical product'', when used in relation to a subject 
        invention, means any medical product of which the manufacture, 
        use, sale, offering for sale, import, or export relies upon or 
        is covered by the rights guaranteed by title in that invention.
            (2) Associated rights.--The term ``associated rights,'' 
        when used in relation to a subject invention, means--
                    (A) all patent and marketing rights, possessed by a 
                current or former holder of title in that invention, or 
                licensee of rights guaranteed by such title, that are 
                reasonably necessary to make, use, sell, offer to sell, 
                import, export, or test any associated medical product 
                ever made, used, sold, offered for sale, imported, or 
                exported by that party; and
                    (B) the right to rely on biological, chemical, 
                biochemical, toxicological, pharmacological, metabolic, 
                formulation, clinical, analytical, stability, and other 
                information and data for purposes of regulatory 
                approval of any associated medical product.
            (3) Drug.--The term ``drug'' has the meaning given such 
        term in section 201 of the Federal Food, Drug and Cosmetic Act 
        (21 U.S.C. 321).
            (4) Eligible country.--The term ``eligible country'' means 
        any country of which the economy is classified by the World 
        Bank as ``low-income'', or ``lower-middle-income''.
            (5) Fair royalty.--The term ``fair royalty'', when used in 
        relation to a subject invention, means--
                    (A) for a country classified by the World Bank as 
                ``low-income'' at the time of the sales on which 
                royalties are due, 2 percent of a licensee's net sales 
                of associated medical products in such country; and
                    (B) for a country classified by the World Bank as 
                ``lower-middle-income'' at the time of sales on which 
                royalties are due, 5 percent of a licensee's net sales 
                of associated medical products in such country.
            (6) Invention.--The term ``invention'' means any invention 
        or discovery which is or may be patentable or otherwise 
        protectable under title 35, United States Code, or any novel 
        variety of plant which is or may be protectable under the Plant 
        Variety Protection Act (7 U.S.C. 2321 et seq.).
            (7) Medical device.--The term ``medical device'' means a 
        device, as defined in section 201(h) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(h)), and includes any device 
        component of any combination product, as that term is used in 
        section 503(g) of such Act (21 U.S.C. 353(g)).
            (8) Medical product.--The term ``medical product'' means 
        any drug, treatment, prophylaxis, vaccine, or medical device.
            (9) Neglected research.--The term ``neglected research'' 
        means any use of a subjected invention or the associated rights 
        in an effort to develop medical products for a rare disease or 
        condition, as defined in section 526(a)(2) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 360bb(a)(2)).
            (10) Subject institution.--The term ``subject institution'' 
        means any institution of higher education (as such term is 
        defined in section 101(a) of the Higher Education Act of 1965 
        (20 U.S.C. 1001(a)) or research that receives federal financial 
        assistance, including Federal laboratories as defined in 
        section 12(d) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15 U.S.C. 3710a(d)).
            (11) Subject invention.--The term ``subject invention'' 
        means any invention--
                    (A) conceived or first actually reduced to practice 
                by a subject institution, or its employees in the 
                course of their employment, on or after the effective 
                date of this Act; or
                    (B) in which a subject institution holds title, 
                provided the invention was first conceived or reduced 
                to practice on or after the effective date of this Act.

SEC. 4. ACCESS TO LIFESAVING MEDICINES DEVELOPED AT GOVERNMENT FUNDED 
              INSTITUTIONS.

    (a) Grant of License.--
            (1) In general.--As a condition of receiving Federal 
        assistance, any subject institution that conceives, reduced to 
        practice, or holds title in a subject invention shall be 
        required to grant irrevocable, perpetual, nonexclusive licenses 
        to the invention and any associated rights the institution may 
        own or ever acquire, to any party requesting such a license 
        pursuant to subsection (g).
            (2) Purpose of license.--The licenses described under 
        paragraph (1) shall be for the sole purpose of--
                    (A) supplying medical products in accordance with 
                subsection (e); or
                    (B) conducting neglected research anywhere in the 
                world, royalty-free.
    (b) Incorporation Into Title.--The open-licensing requirement 
created by subsection (a) and all licenses granted thereunder shall be 
part of the subject institution's title in a subject invention. No 
transfer or license may be interpreted in any manner inconsistent with 
making any grant under subsection (a) effective, or in any manner that 
prevents or frees the holder of title in the invention from granting 
licenses.
    (c) Subsequent Licenses.--
            (1) In general.--If a subject institution licenses or 
        grants rights in a subject invention to any other party, as a 
        condition of such grant the licensee or grantee, and any future 
        sublicensees or subsequent grantees, ad infinitum, shall also 
        be required in perpetuity, to grant irrevocable, perpetual, 
        nonexclusive licenses on any associated rights which the 
        licensee or grantee may own or later acquire, to any party 
        requesting such a license pursuant to subsection (g).
            (2) Purpose of license.--The licenses shall be for the sole 
        purposes described in subsection (a)(2).
            (3) Application of this subsection.--This subsection 
        applies to licenses for a subject invention acquired under 
        subsection (a).
    (d) Construction.--No grant or licensee of any subject invention 
may be interpreted in any manner that prevents or frees the grantee or 
licensee from granting licenses for associated rights under subsection 
(c).
    (e) License for Supply of Medical Products.--
            (1) In general.--A license under subsection (a)(2)(A) shall 
        be a license for the sole purpose of permitting the making, 
        using, selling, offering to sell, importing, exporting, and 
        testing of medical products in eligible countries and the 
        making and exporting of medical products worldwide for the sole 
        purpose of supplying medical products to eligible countries.
            (2) Labeling.--If the recipient of a license under 
        subsection (a) exercises its right to make and export a medical 
        product in any country other than an eligible country for the 
        sole purpose of export to an eligible country, then the 
        licensee shall use reasonable efforts to visibly distinguish 
        the medical product it manufactures from any similar medical 
        product sold by others in the country of manufacture, provided 
        that such reasonable efforts do not require the licensee to 
        expend significant expense.
            (3) Royalties.--
                    (A) License of subject invention.--A license of a 
                subject invention under subsection (a)(2)(A) shall be 
                irrevocable and perpetual so long as the licensee 
                submits to the licensor payment of a fair royalty on 
                sales of any associated medical product within 90 days 
                of such sales. Failure or refusal of the licensor to 
                accept the fair royalty shall not terminate or affect 
                in any way the license.
                    (B) License of associated rights.--A license of 
                associated rights to a subject invention under 
                subsection (a)(2)(A) shall be royalty free.
    (f) Transfer.--In accordance with subsections (a) through (d), any 
license or other transfer of a subject invention by a subject 
institution or the licensee or grantee of such institution for a 
subject invention, shall be invalid unless--
            (1) the license or grant includes a clause, ``This grant or 
        license is subject to the provisions of the Public Research in 
        the Public Interest Act of 2006.'';
            (2) the licensor or grantor complies with the notification 
        requirements of subsection (h); and
            (3) the license or grant does not include any terms that 
        contradict any requirement of this Act.
    (g) Procedures for Acquisition of Licenses.--
            (1) In general.--Any party, upon providing to the Food and 
        Drug Administration--
                    (A) notification of its intent to supply medical 
                products or conduct neglected research as provided in 
                subsection (a);
                    (B) a specific list of the rights it wishes to 
                license for those purposes; and
                    (C) the names of the party or parties it believes 
                are obligated to grant such licenses under subsections 
                (a) through (d),
        shall automatically be deemed to receive the license so 
        requested without the need for any further action on the part 
        of the licensing party if the party or parties specified in the 
        request do not object and notify the requesting party of such 
        objection, within 30 days of the publication of such request by 
        the Administration.
            (2) Enforcement action.--
                    (A) In general.--If the party or parties specified 
                under paragraph (1) object to the grant of a requested 
                license, the requesting party may bring an action to 
                enforce its right to a license of a subject invention 
                or associated rights under subsections (a) through (d).
                    (B) Process.--In any suit under this subsection, 
                the requesting party shall be entitled to separate, 
                expedited review of the legal issues required to 
                adjudicate whether it is entitled to the requested 
                license, without prejudice to any other issues in the 
                lawsuit. If the party objecting to the license is found 
                to have objected without reasonable cause or without a 
                good faith belief that there was a justifiable 
                controversy under the facts and the law, the party 
                requesting the license shall be entitled to attorney's 
                fees, other reasonably necessary costs of the lawsuit, 
                and treble damages from the objecting party.
            (3) Publication.--The Food and Drug Administration shall 
        publish any request made under paragraph (1) within 15 days of 
        receipt of such request. The Food and Drug Administration shall 
        also make reasonable efforts to directly notify the parties 
        named in any such request.
    (h) Notification of Transfer or License of Subject Inventions.--The 
holder of title or any license in a subject invention shall notify the 
Food and Drug Administration of any grant or license of rights in that 
invention. The Food and Drug Administration shall publish all such 
notifications within 15 days of receipt.
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