[Congressional Record Volume 152, Number 67 (Thursday, May 25, 2006)]
[Senate]
[Pages S5243-S5252]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:
  S. 3175. 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; to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, I am today introducing a bill which can be 
the catalyst for saving the lives or improving the health of millions 
of families in impoverished nations.
  In far too many nations, thousands of children die needlessly each 
month.
  The concept of my bill--called the Life-Saving Medicines Export Act 
of 2006--is easy to summarize.
  It allows U.S. companies to make low-cost generic versions of 
patented medicines for export to impoverished nations that face public 
health crises but cannot produce those life-saving medicines for 
themselves.
  This bill is based on World Trade Organization agreements permitting 
nations with pharmaceutical industries to help nations in need.
  That WTO agreement was labeled by U.S. Ambassador Portman as ``a 
landmark achievement that we hope will help developing countries 
devastated by HIV and AIDS and other public health crises.''
  Apart from the pressing need for this step in humanitarian terms, 
passage of this bill could go a long way in improving U.S. relations 
with large segments of the world's population.
  On December 6, 2005, the Office of the U.S. Trade Representative 
announced that it ``welcomes'' efforts 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.''
  I am concerned, however, that the administration has taken no steps 
whatsoever to begin to implement that agreement. No implementing 
legislation has been provided to the Hill. I was informed just today 
that the administration has ``no present plans'' to propose legislation 
to implement that international agreement. I am disappointed with that 
answer but am pleased that the administration expressed a willingness 
to work with me on this important effort. I will forward my bill to 
them later today.
  Indeed, the World Health Assembly and the World Health Organization 
have adopted resolutions urging all WTO member nations with a generic 
capability to adopt laws that implement that agreement.
  The World Bank recently issued a guide and model documents on how

[[Page S5246]]

best to implement that international agreement. My bill follows their 
model.
  Like a generation ago, infectious and parasitic diseases remain the 
major killers of children in the developing world. Many of these 
diseases--measles, malaria, river blindness--we can prevent or cure. 
But those countries still lack the public health systems and the vital 
medicines.
  Every hour, more than 500 African mothers lose a child, mostly from 
diseases caused by contaminated water.
  In some sub-Saharan countries, HIV infection rates range as high as a 
third of the adult population, and for this reason 35 percent of 
African children are at higher risk of death than they were a decade 
ago.
  Despite these grim statistics, there is a brighter side.
  We are far more aware today of how much our own health depends on 
what takes place half a world away. Whether it is AIDS, SARS, West Nile 
Virus, the Avian Flu, or some as yet unknown infectious disease, we are 
all at risk, and only an airplane flight away, from wherever the 
outbreak may occur.
  Because of this new awareness, global health is finally recognized as 
an issue of national security. It may seem obvious today, but even ten 
years ago it was not.
  Health threats that once concerned only medical personnel, now 
receive the attention of the highest levels of governments. We are 
supporting policies and programs to help the poorest countries conduct 
better surveillance and respond more quickly to protect their own 
people, and to prevent the spread of disease.
  There is a great deal more we need to do. Today, 15 percent of the 
world's people consume 91 percent of the world's pharmaceuticals. The 
high price of many life-saving medicines--medicines that we take for 
granted in this country--is beyond reach for billions of the world's 
most vulnerable populations.
  President Franklin Roosevelt said: ``The test of our progress is not 
whether we add more to the abundance of those who have much, it is 
whether we provide enough for those who have little.''
  Imagine if you, or a loved one, were dying and you knew the medicine 
to cure the disease exists and costs only a few dollars, but you have 
no way to get it or to pay for it. That is a reality for millions of 
people today.
  Reports by UNICEF, UNAIDS, and Doctors without Borders clearly show 
that the high price of many life-saving medicines is a significant 
barrier to their availability in many very low income areas of the 
world. Indeed, the 4th Global Report of UNAIDS notes the extremely low 
rate of treatment for HIV/AIDS in those areas by pointing out that of 
the 5 to 6 million urgently in need of antiretroviral medicines, only 
some 400,000 were receiving them.
  With respect to AIDS, a recent book by Philip Hilts called 
``Prescription for Survival'' notes the importance of offering 
affordable medicines to populations of impoverished nations:
  ``It was said that the price of the drugs was killing tens of 
thousands . . .''
  Under my bill, U.S. generic manufacturers would be allowed to make 
generic versions of patented drugs without the consent of the patent 
holders.
  Those patent holders would receive compensation in the form of a 
royalty payment under a so-called ``compulsory license'' and the 
generic companies would then be required to sell those less-expensive 
generic drugs only to least-developed or developing nations.
  Use of a compulsory license occurs when Congress determines that 
there is an important need which should be addressed.
  For example, most Americans do not realize that their network 
television programs received by satellite or by cable are provided 
under a compulsory license. The program owners receive a royalty for 
their programs under a formula.
  This way American families can watch network TV programming over 
satellite or cable just like it is made available over-the-air. This 
same compulsory license approach, except with respect to patented 
medicines, is employed in this bill.
  The WTO agreement contains language designed to protect the interests 
of the patent holders by focusing its benefits on areas of the world 
where these important medicines would not otherwise be available except 
for some of the wealthiest residents.
  Thus, implementation of the agreement would not take business away 
from the companies owning the patents, sometimes referred to as the 
``brand-name'' companies, since their medicines are not purchased by 
low-income families in those impoverished nations.
  In addition, the patent holders will receive royalties from the 
generic companies under the bill. Third, generic versions of products 
sold under the agreement have to be clearly marked as not for resale to 
developed nations. This will mean that the bill should not result in 
undercutting the high-priced sales of those medicines by the brand-name 
companies in developed nations.
  Thus, the bill addresses both the urgent needs of millions of low-
income families in impoverished nations while protecting the interests 
of the patent owners of these life-saving medicines.
  There have been significant voluntary efforts made by brand-name 
pharmaceutical companies, foundations, and non-profits who have donated 
life-saving medicines and have donated time, personnel and money to 
help in the fight against deadly diseases in other nations. I commend 
and greatly appreciate those efforts.
  Some funding mechanisms have been started including the Global Fund 
to Fight AIDS, Tuberculosis and Malaria and President Bush's Millennium 
Challenge Account. Nonetheless, much remains to be done.
  If this bill is enacted it would complement the above efforts and 
implement the WTO agreements and make low-cost life-saving 
pharmaceutical products, and other medicines, available to hundreds of 
thousands of persons without other access to those products.
  To provide a little history, I am very pleased that all the member 
nations of the World Trade Organization, WTO, agreed to this approach 
to assist people suffering from life-threatening diseases in least-
developed or developing nations. Under this international agreement, 
nations such as the United States with pharmaceutical industries would 
be allowed to make and sell generic medicines to nations in need even 
if the patent owners of those medicines refused to authorize such 
manufacture and sale.
  As I said earlier, on December 6, 2005, the United States announced 
that it ``welcomes'' the WTO 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.'' The amendment will go in effect, for those nations which 
adopt it, once \2/3\ of the member nations adopt it. The current waiver 
approach, allowing nations to implement it now, will remain in place 
until the permanent amendment is adopted. This permits the U.S. to move 
forward with this effort this year. Indeed, Canada has already passed 
implementing legislation.
  Participation by any nation which wants to export such generic 
products is voluntary. In order to participate, each country must pass 
legislation to implement the WTO agreement. The United States needs to 
act as soon as possible.
  This is a moral issue. I am working with a number of religious 
groups, humanitarian organizations, international assistance groups, 
and generic drug companies on this effort. I have also received input 
from some pharmaceutical brand-name companies and hope a few will step 
forward and be leaders in this effort. I will also reach out across the 
aisle to try to form a bipartisan coalition.
  Two recent World Health Organization annual reports, the World Health 
Reports for 2003 and 2004, demonstrate the enormous scope of the need 
for supplying these medicines to needy countries. The ``Life-Saving 
Medicines Export Act of 2006'' that I am introducing today would allow 
the U.S. generic industry to respond to these urgent international 
needs and could save millions of lives in impoverished nations.
  Canada, Norway and the Netherlands have already enacted such 
legislation or rule changes. However, aspects of the Canadian law have 
been an impediment to the willingness of generic companies to 
participate. For example,

[[Page S5247]]

that law allows Canadian generic companies to provide such medicines 
for at most only 4 years. The Canadian version permits dilatory and 
needless litigation, omits important medicines from a complex list of 
covered drugs, and creates unnecessary bureaucratic hoops.
  I have received input from generic companies and my bill addresses 
all of those concerns. For example, it would provide that a 
participating generic manufacturer could provide such medicines for up 
to 14 years which makes it much more likely that U.S. generic companies 
would make the investments needed to make low-cost medicines for export 
to impoverished areas.

  Under my bill, U.S. generic manufacturers would be allowed to make 
generic versions of patented drugs without the consent of the patent 
holders. Those patent holders would receive compensation, a royalty 
payment, under a so-called ``compulsory license'' and the generic 
companies would then be required to sell those less-expensive generic 
drugs only to least-developed or developing nations.
  The WTO agreement contains language designed to protect the interests 
of the patent holders by focusing its provisions on areas of the world 
where these important medicines would not otherwise be available except 
for some of the wealthiest residents. Thus, implementation of the 
agreement would not take business away from the companies owning the 
patents, sometimes referred to as the ``brand-name patent holders since 
their medicines are not purchased by low-income families in those 
impoverished nations. There may be de minimis losses of profits for 
brand-name patent holders but certainly the humanitarian and self-
interest benefits provided by the bill would massively outweigh those 
concerns.
  In addition, the patent holders will receive royalties from the 
generic companies under the bill. Third, generic versions of products 
sold under the agreement have to be clearly marked as not for resale to 
developed nations. This should mean that the bill will not result in 
undercutting the high-priced sales of the patented medicines in 
developed nations. Re-exporting of these generic products is prohibited 
unless it is part of a regional trade alliance among impoverished 
nations as permitted under the WTO agreements.
  Thus, the bill addresses both the urgent needs of millions of low-
income families in impoverished nations while protecting the interests 
of the patent owners of these life-saving medicines and will hopefully 
help enhance America's image in the world.
  For those only interested in self-interest rather than humanitarian 
aid, note that because of the globalization of travel our Nation is at 
risk from failure to contain diseases in other nations. America has a 
strong self-interest in combating diseases in foreign nations. A 
surprising number of new diseases have emerged in recent years. Some of 
these new diseases are variations of existing diseases. The volume of 
people and cargo going to and from distant nations is astounding. 
According to ``Rx for Survival'' by Philip Hilts, if you count only 
travel between nations with a heavy burden of disease and those with 
less disease, more than a million people a week are making the trip.
  The more viruses and bacteria mutant inside animals and people, and 
the more people and goods travel throughout the world, the more 
residents living in the United States are at risk of being harmed by 
dangerous diseases.
  The National Intelligence Estimate of January 2000, published by the 
CIA and the National Intelligence Council noted that: ``New and 
emerging infectious diseases will pose a rising global health threat, 
and will complicate U.S. and global security over the next 20 years. 
These diseases will endanger U.S. citizens at home and abroad, threaten 
United States armed forces deployed overseas and exacerbate social and 
political instability in key countries and regions.''
  I hope all my colleagues will join me in supporting this effort. Here 
is my section-by-section summary of the bill.
  Section 1: Sets forth the name of the Act as the ``Life-Saving 
Medicines Export Act of 2006.''
  Section 2: States that the purpose of the Act is to promote public 
health under World Trade Organization agreements by permitting the 
export of generic versions of life-saving patented pharmaceutical 
products and other medicines including diagnostic tools and vaccines 
needed to prevent or treat potentially life threatening diseases to 
residents of impoverished countries with insufficient or no 
manufacturing capacity to make the medicines. The findings set forth 
determinations by the World Health Organization concerning the millions 
of low-income persons without regular access to medicines in lesser-
developed or developing nations.
  Section 3: This section requires the Director of the United States 
Patent and Trademark Office to issue a compulsory license (permission 
to make and sell a patented product under this new Act) to permit 
generic companies to make and export medicines under the terms of WTO 
international agreements under several conditions.
  The recipient country must be a least-developed nation, as defined by 
the United Nations, or a developing nation without the ability to 
manufacture the medicine in question.
  The recipient country, called an ``eligible country'' in the bill, 
must notify the WTO of its interest in participating in this program.
  Efforts must have been made by the generic company to buy the right 
to make and sell the medicine under normal business arrangements with 
the patent holders.
  The medical product exported under this Act must be for life-
threatening public health problems and can only be used in least-
developed or developing nations, and is not for re-export except in 
identified circumstances relating to regional trade alliances.
  Special labeling and packaging must be used to make clear that the 
product is sold under the authority of the WTO agreement only for use 
as allowed under agreement and this bill.
  The permission to make and sell the product, the license, can not 
exceed 7 years, except that the license may be extended once.
  The holder of the compulsory license shall pay a royalty to the 
patent holder, as determined by the Director of the PTO within a 
limited range of possible rates set forth in the bill, taking into 
account such factors as humanitarian needs, the economic value to the 
importing nation, and the need for low-cost pharmaceutical products by 
persons in the importing nation.
  The maximum royalty for any shipment shall not exceed 4 percent times 
the commercial value of the pharmaceutical products to be exported 
under this Act under that supply agreement.
  An alternative royalty payment approach, modeled after the approach 
enacted into law by Canada, would also be permitted with the same 4 
percent maximum. In addition, the Director may accept combined 
applications from multiple eligible countries. Note that in emergency 
situations the Director may waive provisions of the bill in a manner 
consistent with the WTO agreements.
  Section 4: This section makes clear that compulsory licenses issued 
under this Act shall not be considered an infringement of a patent.
  Section 5: This section creates a diverse advisory board of academic, 
patent, trade, medical, international aid, and industry experts to 
advise the Director, and to report to the Congress, on ways to improve 
implementation of the bill to achieve its purposes. Mandatory funding 
for the board is provided out of the general fund of the U.S. at $1.5 
million in fiscal years 2007 and 2008, with modestly declining amounts 
provided in subsequent years through 2011.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3175

       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

[[Page S5248]]

     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--

[[Page S5249]]

       ``(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

[[Page S5250]]

     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

[[Page S5251]]

     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.

[[Page S5252]]

       (q) Termination.--The Board shall terminate on September 
     30, 2011.
                                 ______