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Calendar No. 376
108th CONGRESS
1st Session
H. R. 1086
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 11, 2003
Received; read twice and referred to the Committee on the Judiciary
November 6, 2003
Reported by Mr. Hatch, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
AN ACT
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,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Standards Development
Organization Advancement Act of 2003''.</DELETED>
<DELETED>SEC. 2. FINDINGS.</DELETED>
<DELETED> The Congress finds the following:</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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--</DELETED>
<DELETED> (A) notice to all parties known to be
affected by the particular standards development
activity,</DELETED>
<DELETED> (B) the opportunity to participate in
standards development or modification,</DELETED>
<DELETED> (C) balancing interests so that standards
development activities are not dominated by any single
group of interested persons,</DELETED>
<DELETED> (D) readily available access to essential
information regarding proposed and final
standards,</DELETED>
<DELETED> (E) the requirement that substantial
agreement be reached on all material points after the
consideration of all views and objections,
and</DELETED>
<DELETED> (F) the right to express a position, to
have it considered, and to appeal an adverse
decision.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (7) Standards developed by government entities
generally are not subject to challenge under the antitrust
laws.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (9) Standards development organizations do not
stand to benefit from any antitrust violations that might occur
in the voluntary consensus standards development
process.</DELETED>
<DELETED> (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.</DELETED>
<DELETED>SEC. 3. DEFINITIONS.</DELETED>
<DELETED> Section 2 of the National Cooperative Research and
Production Act of 1993 (15 U.S.C. 4301) is amended--</DELETED>
<DELETED> (1) in subsection (a) by adding at the end the
following:</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(c) The term `standards development activity' excludes
the following activities:</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Entering into any agreement or engaging in
any other conduct that would allocate a market with a
competitor.</DELETED>
<DELETED> ``(3) Entering into any agreement or conspiracy
that would set or restrain prices of any good or
service.''.</DELETED>
<DELETED>SEC. 4. RULE OF REASON STANDARD.</DELETED>
<DELETED> 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--</DELETED>
<DELETED> ``(1) any person in making or performing a
contract to carry out a joint venture, or</DELETED>
<DELETED> ``(2) a standards development organization while
engaged in a standards development activity,</DELETED>
<DELETED>shall''.</DELETED>
<DELETED>SEC. 5. LIMITATION ON RECOVERY.</DELETED>
<DELETED> Section 4 of the National Cooperative Research and
Production Act of 1993 (15 U.S.C. 4303) is amended--</DELETED>
<DELETED> (1) in subsections (a)(1), (b)(1), and (c)(1) by
inserting ``, or for a standards development activity engaged
in by a standards development organization against which such
claim is made'' after ``joint venture'', and</DELETED>
<DELETED> (2) in subsection (e)--</DELETED>
<DELETED> (A) by inserting ``, or of a standards
development activity engaged in by a standards
development organization'' before the period at the
end, and</DELETED>
<DELETED> (B) by redesignating such subsection as
subsection (f), and</DELETED>
<DELETED> (3) by inserting after subsection (d) the
following:</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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,</DELETED>
<DELETED> ``(2) is not a fulltime employee of the standards
development organization that engaged in such activity,
and</DELETED>
<DELETED> ``(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.''.</DELETED>
<DELETED>SEC. 6. ATTORNEY FEES.</DELETED>
<DELETED> Section 5 of the National Cooperative Research and
Production Act of 1993 (15 U.S.C. 4304) is amended--</DELETED>
<DELETED> (1) in subsection (a) by inserting ``, or of a
standards development activity engaged in by a standards
development organization'' after ``joint venture'',
and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(c) Subsections (a) and (b) shall not apply with respect
to any person who--</DELETED>
<DELETED> ``(1) directly participates in a standards
development activity with respect to which a violation of any
of the antitrust laws is found,</DELETED>
<DELETED> ``(2) is not a fulltime employee of a standards
development organization that engaged in such activity,
and</DELETED>
<DELETED> ``(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.''.</DELETED>
<DELETED>SEC. 7. DISCLOSURE OF STANDARDS DEVELOPMENT
ACTIVITY.</DELETED>
<DELETED> Section 6 of the National Cooperative Research and
Production Act of 1993 (15 U.S.C. 4305) is amended--</DELETED>
<DELETED> (1) in subsection (a)--</DELETED>
<DELETED> (A) by redesignating paragraphs (1), (2),
and (3) as subparagraphs (A), (B), and (C),
respectively,</DELETED>
<DELETED> (B) by inserting ``(1)'' after ``(a)'',
and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(A) the name and principal place of business of
the standards development organization, and</DELETED>
<DELETED> ``(B) documents showing the nature and scope of
such activity.</DELETED>
<DELETED>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.'',</DELETED>
<DELETED> (2) in subsection (b)--</DELETED>
<DELETED> (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</DELETED>
<DELETED> (B) in the last sentence by inserting ``or
available to such organization, as the case may be''
before the period,</DELETED>
<DELETED> (3) in subsection (d)(2) by inserting ``, or the
standards development activity,'' after ``venture'',</DELETED>
<DELETED> (4) in subsection (e)--</DELETED>
<DELETED> (A) by striking ``person who'' and
inserting ``person or standards development
organization that'', and</DELETED>
<DELETED> (B) by inserting ``or any standards
development organization'' after ``person'' the last
place it appears, and</DELETED>
<DELETED> (5) in subsection (g)(1) by inserting ``or
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