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:

 

(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.
`(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.
`(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 Circular Number A-119, as revised February 10, 1998, of the Office of Management and Budget.'; 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 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 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
`(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'.

 

 
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