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Union Calendar No. 63
108th CONGRESS
1st Session
H. R. 1086
[Report No. 108-125]
To encourage the development and promulgation of voluntary consensus
standards by providing relief under the antitrust laws to standards
development organizations with respect to conduct engaged in for the
purpose of developing voluntary consensus standards, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 5, 2003
Mr. Sensenbrenner (for himself, Mr. Conyers, Mr. Boehlert, Mr. Hall,
Mr. Smith of Texas, Mr. Frank of Massachusetts, Mr. Coble, Mr. Issa,
Mr. Berman, Ms. Hart, Mr. Delahunt, Mr. Keller, Mr. Meehan, Mr. Forbes,
Ms. Jackson-Lee of Texas, Mr. Feeney, and Mr. Weiner) introduced the
following bill; which was referred to the Committee on the Judiciary
May 22, 2003
Committed to the Committee of the Whole House on the State of the Union
and ordered to be printed
_______________________________________________________________________
A BILL
To encourage the development and promulgation of voluntary consensus
standards by providing relief under the antitrust laws to standards
development organizations with respect to conduct engaged in for the
purpose of developing voluntary consensus standards, and for other
purposes.
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 ``Standards Development Organization
Advancement Act of 2003''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) In 1993, the Congress amended and renamed the National
Cooperative Research Act of 1984 (now known as the National
Cooperative Research and Production Act of 1993 (15 U.S.C. 4301
et seq.)) by enacting the National Cooperative Production
Amendments of 1993 (Public Law 103-42) to encourage the use of
collaborative, procompetitive activity in the form of research
and production joint ventures that provide adequate disclosure
to the antitrust enforcement agencies about the nature and
scope of the activity involved.
(2) Subsequently, in 1995, the Congress in enacting the
National Technology Transfer and Advancement Act of 1995 (15
U.S.C. 272 note) recognized the importance of technical
standards developed by voluntary consensus standards bodies to
our national economy by requiring the use of such standards to
the extent practicable by Federal agencies and by encouraging
Federal agency representatives to participate in ongoing
standards development activities. The Office of Management and
Budget on February 18, 1998, revised Circular A-119 to reflect
these changes made in law.
(3) Following enactment of the National Technology Transfer
and Advancement Act of 1995, technical standards developed or
adopted by voluntary consensus standards bodies have replaced
thousands of unique Government standards and specifications
allowing the national economy to operate in a more unified
fashion.
(4) Having the same technical standards used by Federal
agencies and by the private sector permits the Government to
avoid the cost of developing duplicative Government standards
and to more readily use products and components designed for
the commercial marketplace, thereby enhancing quality and
safety and reducing costs.
(5) Technical standards are written by hundreds of
nonprofit voluntary consensus standards bodies in a
nonexclusionary fashion, using thousands of volunteers from the
private and public sectors, and are developed under the
standards development principles set out in Circular Number A-
119, as revised February 18, 1998, of the Office of Management
and Budget, including principles that require openness,
balance, transparency, consensus, and due process. Such
principles provide for--
(A) notice to all parties known to be affected by
the particular standards development activity,
(B) the opportunity to participate in standards
development or modification,
(C) balancing interests so that standards
development activities are not dominated by any single
group of interested persons,
(D) readily available access to essential
information regarding proposed and final standards,
(E) the requirement that substantial agreement be
reached on all material points after the consideration
of all views and objections, and
(F) the right to express a position, to have it
considered, and to appeal an adverse decision.
(6) There are tens of thousands of voluntary consensus
standards available for government use. Most of these standards
are kept current through interim amendments and
interpretations, issuance of addenda, and periodic
reaffirmation, revision, or reissuance every 3 to 5 years.
(7) Standards developed by government entities generally
are not subject to challenge under the antitrust laws.
(8) Private developers of the technical standards that are
used as Government standards are often not similarly protected,
leaving such developers vulnerable to being named as
codefendants in lawsuits even though the likelihood of their
being held liable is remote in most cases, and they generally
have limited resources to defend themselves in such lawsuits.
(9) Standards development organizations do not stand to
benefit from any antitrust violations that might occur in the
voluntary consensus standards development process.
(10) As was the case with respect to research and
production joint ventures before the passage of the National
Cooperative Research and Production Act of 1993, if relief from
the threat of liability under the antitrust laws is not granted
to voluntary consensus standards bodies, both regarding the
development of new standards and efforts to keep existing
standards current, such bodies could be forced to cut back on
standards development activities at great financial cost both to the
Government and to the national economy.
SEC. 3. DEFINITIONS.
Section 2 of the National Cooperative Research and Production Act
of 1993 (15 U.S.C. 4301) is amended--
(1) in subsection (a) by adding at the end the following:
``(7) The term `standards development activity' means any
action taken by a standards development organization for the
purpose of developing, promulgating, revising, amending,
reissuing, interpreting, or otherwise maintaining a voluntary
consensus standard, or using such standard in conformity
assessment activities, including actions relating to the
intellectual property policies of the standards development
organization.
``(8) The term `standards development organization' means a
domestic or international organization that plans, develops,
establishes, or coordinates voluntary consensus standards using
procedures that incorporate the attributes of openness, balance
of interests, due process, an appeals process, and consensus in
a manner consistent with the Office of Management and Budget
Circular Number A-119, as revised February 10, 1998.
``(9) The term `technical standard' has the meaning given
such term in section 12(d)(4) of the National Technology
Transfer and Advancement Act of 1995.
``(10) The term `voluntary consensus standard' has the
meaning given such term in Office of Management and Budget
Circular Number A-119, as revised February 10, 1998.''; and
(2) by adding at the end the following:
``(c) The term `standards development activity' excludes the
following activities:
``(1) Exchanging information among competitors relating to
cost, sales, profitability, prices, marketing, or distribution
of any product, process, or service that is not reasonably
required for the purpose of developing or promulgating a
voluntary consensus standard, or using such standard in
conformity assessment activities.
``(2) Entering into any agreement or engaging in any other
conduct that would allocate a market with a competitor.
``(3) Entering into any agreement or conspiracy that would
set or restrain prices of any good or service.''.
SEC. 4. RULE OF REASON STANDARD.
Section 3 of the National Cooperative Research and Production Act
of 1993 (15 U.S.C. 4302) is amended by striking ``of any person in
making or performing a contract to carry out a joint venture shall''
and inserting the following: ``of--
``(1) any person in making or performing a contract to
carry out a joint venture, or
``(2) a standards development organization while engaged in
a standards development activity,
shall''.
SEC. 5. LIMITATION ON RECOVERY.
Section 4 of the National Cooperative Research and Production Act
of 1993 (15 U.S.C. 4303) is amended--
(1) in subsections (a)(1), (b)(1), and (c)(1) by inserting
``, for a standards development activity engaged in by a
standards development organization against which such claim is
made'' after ``joint venture'', and
(2) in subsection (e)--
(A) by inserting ``, or of a standards development
activity engaged in by a standards development
organization'' before the period at the end, and
(B) by redesignating such subsection as subsection
(f), and
(3) by inserting after subsection (d) the following:
``(e) Subsections (a), (b), and (c) shall not be construed to
modify the liability under the antitrust laws of any person (other than
a standards development organization) who--
``(1) directly (or through an employee or agent)
participates in a standards development activity with respect
to which a violation of any of the antitrust laws is found,
``(2) is not a fulltime employee of the standards
development organization that engaged in such activity, and
``(3) is, or is an employee or agent of a person who is,
engaged in a line of commerce that is likely to benefit
directly from the operation of the standards development
activity with respect to which such violation is found.''.
SEC. 6. ATTORNEY FEES.
Section 5 of the National Cooperative Research and Production Act
of 1993 (15 U.S.C. 4304) is amended--
(1) in subsection (a) by inserting ``, or of a standards
development activity engaged in by a standards development
organization'' after ``joint venture'', and
(2) by adding at the end the following:
``(c) Subsections (a) and (b) shall not apply with respect to any
person who--
``(1) directly participates in a standards development
activity with respect to which a violation of any of the
antitrust laws is found,
``(2) is not a fulltime employee of a standards development
organization that engaged in such activity, and
``(3) is, or is an employee or agent of a person who is,
engaged in a line of commerce that is likely to benefit
directly from the operation of the standards development
activity with respect to which such violation is found.''.
SEC. 7. DISCLOSURE OF STANDARDS DEVELOPMENT ACTIVITY.
Section 6 of the National Cooperative Research and Production Act
of 1993 (15 U.S.C. 4305) is amended--
(1) in subsection (a)--
(A) by redesignating paragraphs (1), (2), and (3)
as subparagraphs (A), (B), and (C), respectively,
(B) by inserting ``(1)'' after ``(a)'', and
(C) by adding at the end the following:
``(2) A standards development organization may, not later than 90
days after commencing a standards development activity engaged in for
the purpose of developing or promulgating a voluntary consensus
standards or not later than 90 days after the date of the enactment of
the Standards Development Organization Advancement Act of 2003,
whichever is later, file simultaneously with the Attorney General and
the Commission, a written notification disclosing--
``(A) the name and principal place of business of the
standards development organization, and
``(B) documents showing the nature and scope of such
activity.
Any standards development organization may file additional disclosure
notifications pursuant to this section as are appropriate to extend the
protections of section 4 to standards development activities that are
not covered by the initial filing or that have changed significantly
since the initial filing.'',
(2) in subsection (b)--
(A) in the 1st sentence by inserting ``, or a
notice with respect to such standards development
activity that identifies the standards development
organization engaged in such activity and that
describes such activity in general terms'' before the
period at the end, and
(B) in the last sentence by inserting ``or
available to such organization, as the case may be''
before the period,
(3) in subsection (d)(2) by inserting ``, or the standards
development activity,'' after ``venture'',
(4) in subsection (e)--
(A) by striking ``person who'' and inserting
``person or standards development organization that'',
and
(B) by inserting ``or any standards development
organization'' after ``person'' the last place it
appears, and
(5) in subsection (g)(1) by inserting ``or standards
development organization'' after ``person''.
SEC. 8. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to alter or modify the
antitrust treatment under existing law of--
(1) parties participating in standards development activity
of standards development organizations within the scope of this
Act, or
(2) other organizations and parties engaged in standard-
setting processes not within the scope of this amendment to the
Act.
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