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Standards Development Organization Advancement Act of 2002 (Introduced
in House)
107th CONGRESS
2d Session
H. R. 4849
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
MAY 23, 2002
Mr. SENSENBRENNER (for himself, Mr. CONYERS, Mr. BOEHLERT, Mr. HALL of
Texas, Mr. SMITH of Texas, Mr. FRANK, Mrs. MORELLA, Mr. MEEHAN, Mr. BARR
of Georgia, Mr. DELAHUNT, Mr. GUTKNECHT, Mr. GREEN of Wisconsin, Mr. ISSA,
and Mr. BERMAN) introduced the following bill; which was referred to the
Committee on the Judiciary
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 2002'.
SEC. 2. FINDINGS.
The Congress finds the following:
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(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.
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(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.
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(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.
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(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.
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(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--
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(A) notice to all parties known to be affected by the particular
standards development activity,
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(B) the opportunity to participate in standards development or
modification,
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(C) balancing interests so that standards development activities are
not dominated by any single group of interested persons,
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(D) readily available access to essential information regarding
proposed and final standards,
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(E) the requirement that substantial agreement be reached on all
material points after the consideration of all views and objections,
and
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(F) the right to express a position, to have it considered, and to
appeal an adverse decision.
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(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.
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(7) Standards developed by government entities generally are not
subject to challenge under the antitrust laws.
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(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.
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(9) Standards development organizations do not stand to benefit from
any antitrust violations that might occur in the voluntary consensus
standards development process.
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(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.
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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:
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`(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.
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`(8) The term `standards development organization' has the same
meaning as the terms `voluntary consensus standards body' and
`voluntary, private sector consensus standards body' as such term are
used in section 12(d) of the National Technology Transfer and
Advancement Act of 1995 and in Circular Number A-119, as revised
February 10, 1998, of the Office of Management and Budget.
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`(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.
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`(10) The term `voluntary consensus standard' has the meaning given
such term in Circular Number A-119, as revised February 10, 1998, of
the Office of Management and Budget.'; and
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(2) by adding at the end the following:
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`(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.
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`(2) Entering into any agreement or engaging in any other conduct that
would allocate a market with a competitor.
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`(3) Entering into any agreement or conspiracy that would set or
restrain prices of any good or service.'.
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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
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`(2) a standards development organization while engaged in a standards
development activity,
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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 standards development
organization against which such claim is made' after `joint venture',
and
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(A) by inserting `, or of a standards development activity engaged
in by a standards development organization' before the period at the
end, and
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(B) by redesignating such subsection as subsection (f), and
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(3) by inserting after subsection (d) the following:
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`(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,
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`(2) is not a fulltime employee of the standards development
organization that engaged in such activity, and
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`(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.'.
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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
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(2) by adding at the end the following:
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`(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,
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`(2) is not a fulltime employee of a standards development
organization that engaged in such activity, and
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`(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.'.
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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--
(A) by redesignating paragraphs (1), (2), and (3) as subparagraphs
(A), (B), and (C), respectively,
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(B) by inserting `(1)' after `(a)', and
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(C) by adding at the end the following:
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`(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 2002, 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
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`(B) documents showing the nature and scope of such activity.
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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.',
(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
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(B) in the last sentence by inserting `or available to such
organization, as the case may be' before the period,
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(3) in subsection (d)(2) by inserting `, or the standards development
activity,' after `venture',
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(A) by striking `person who' and inserting `person or standards
development organization that', and
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(B) by inserting `or any standards development organization' after
`person' the last place it appears, and
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(5) in subsection (g)(1) by inserting `or standards development
organization' after `person'.
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