Sec. 2. Requirements for licensing of new COVID–19 treatment and prevention technologies to meet domestic and global demand

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19 treatment and prevention technologies to meet domestic and global demand Any covered license granted by the Federal Government shall be an open, nonexclusive license. Notwithstanding any other provision of law, any contractor, assignee, or exclusive licensee to an invention developed in whole or in part in work performed under a covered transaction shall grant an open, non-exclusive license. If any such contractor, assignee, or exclusive licensee refuses to grant such license, the Federal government shall grant the license.

Except as provided in paragraph (4), an entity that accepts an open, nonexclusive license under this section shall pay a reasonable royalty with respect to sales within the United States to— the holder of a patent that claims the COVID–19 related invention; or to the holder of an application approved under section 505 of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355 ) or section 351 of the Public Health Service Act ( 42 U.S.C. 262 ) for which any FDA-granted exclusivity with respect to a drug related to such invention that was terminated under this section.

The reasonable royalty described under paragraph

(1)shall be a percentage of sales of the entity paying the royalty, where the percentage rate is no higher than the average royalty rate estimated from the data provided by the Internal Revenue Service for pharmaceutical manufacturer Federal income tax returns. The royalty described under paragraph

(2)shall be subject to the applicable royalty rate requirements of section 319B of the Public Health Service Act, as added by section 5 of this Act. In the case of more than one recipient of a royalty, the royalty shall be divided among each such recipient (including any manufacturer) in a manner agreed upon by the manufacturer and other recipients, or, in the absence of such an agreement, in a manner the Secretary determines to be appropriate. An entity that accepts an open, nonexclusive license for a federally owned invention described under section 207 of title 35, United States Code, is not required to pay a royalty under this section. In this section: The term covered license means a license that allows a licensee to make, use, offer to sell, or sell, export, or import into the United States or any other country or territory a COVID–19 related invention pursuant to— section 207 of title 35, United States Code; and section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3710a ). The term covered transaction means any contract, funding agreement, license, other transaction, or other arrangement entered into between a party and the Federal Government on or after the date of enactment of this Act with respect to research and development regarding a drug that— is intended or anticipated to be used to diagnose, mitigate, prevent, or treat COVID–19; and consists of— a licensing agreement pursuant to section 207 of title 35, United States Code; a cooperative research and development agreement and licensing agreement pursuant to section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3710a ); a funding agreement, as defined under section 201 of title 35, United States Code; or any other transaction entered into pursuant to— section 319L, 421, or 480 of the Public Health Service Act (42 U.S.C. 247d–7e, 285b–3, 287a); section 105 of the National Institutes of Health Reform Act of 2006 ( 42 U.S.C. 284n ); or section 2371 of title 10, United States Code. The term COVID–19 related invention means any invention that claims a drug that is manufactured, used, designed, developed, modified, licensed, or procured to diagnose, mitigate, prevent, treat, or cure COVID–19; a use of such drug; a form of such drug; a method of use of such drug; or a method of manufacturing such drug. The term FDA-granted exclusivity means prohibitions on the submission or approval of drug applications granted under any of the following: Clauses

(ii)through

(v)of section 505(c)(3)(E) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(c)(3)(E) ). Subsection (j)(5)(B)(iv) or clause (ii), (iii), or

(iv)of subsection (j)(5)(F) of such Act ( 21 U.S.C. 355(c)(3)(E) ). Section 505A of such Act ( 21 U.S.C. 355a ). Section 505E of such Act ( 21 U.S.C. 355f ). Section 527 of such Act ( 21 U.S.C. 360cc ). Section 351(k)(7) of this Act ( 42 U.S.C. 262(k)(7) ). Any other provision of law that provides for marketing or data exclusivity (or extension of exclusivity) with respect to a drug. The term open, nonexclusive license means a license that allows a qualified licensee, subject to the provisions of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 301 et seq.) and the Public Health Service Act ( 42 U.S.C. 201 et seq.)— to make, use, offer to sell, sell, export, or import into the United States and any other country and territory an invention; to reference or rely upon earlier-submitted regulatory test data or the earlier grant of marketing approval of a treatment or vaccine related to such invention; and to access and use otherwise confidential know-how relating to the manufacture of such invention.

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