[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 574 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 574

To amend the National Cooperative Research Act of 1984 with respect to 
  joint ventures entered into for the purpose of producing a product, 
                          process, or service.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 11 (legislative day, March 3), 1993

    Mr. Leahy (for himself, Mr. Thurmond, Mr. Biden, Mr. Brown, Mr. 
   DeConcini, Mr. Heflin, Mr. Kohl, Mr. Grassley, Mr. Jeffords, Mr. 
  Wofford, Mr. Bumpers, and Mrs. Feinstein) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 A BILL


 
To amend the National Cooperative Research Act of 1984 with respect to 
  joint ventures entered into for the purpose of producing a product, 
                          process, or service.

    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 ``National Cooperative Production 
Amendments Act of 1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) technological innovation and its profitable 
        commercialization are critical components of the ability of the 
        United States to raise the living standards of Americans and to 
        compete in world markets;
            (2) cooperative arrangements among nonaffiliated businesses 
        in the private sector are often essential for successful 
        technological innovation; and
            (3) the antitrust laws may have been mistakenly perceived 
        as inhibiting cooperative innovation arrangements that promote 
        competition, and accordingly, clarification of the law would 
        serve a useful purpose in helping to promote such arrangements.
    (b) Purpose.--It is the purpose of this Act to promote innovation, 
facilitate trade, and strengthen the competitiveness of the United 
States in world markets by clarifying the applicability of the rule of 
reason standard and establishing a procedure under which businesses may 
notify the Department of Justice and Federal Trade Commission of their 
cooperative ventures and thereby qualify for a single-damage limitation 
on civil antitrust liability.

SEC. 3. AMENDMENTS.

    (a) Short Title.--Section 1 of the National Cooperative Research 
Act of 1984 (15 U.S.C. 4301 note) is amended by striking ``National 
Cooperative Research Act of 1984'' and inserting ``National Cooperative 
Research and Production Act of 1993''.
    (b) Definition.--Section 2(a)(6) of the National Cooperative 
Research Act of 1984 (15 U.S.C. 4301(a)(6)) is amended--
            (1) in the matter preceding subparagraph (A) by striking 
        ``research and development'';
            (2) in subparagraph (D) by inserting ``or production'' 
        after ``research'';
            (3) in subparagraph (E) by striking ``and (D)'' and 
        inserting ``(D), (E), and (F)'';
            (4) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (F) and (G), respectively;
            (5) by inserting after subparagraph (C) the following:
                    ``(D) the production of a product, process, or 
                service,
                    ``(E) the testing in connection with the production 
                of a product, process, or service by such venture,''; 
                and
            (6) by striking ``research'' the last place it appears and 
        inserting ``such venture''.
    (c) Exclusions.--Section 2(b) of the National Cooperative Research 
Act of 1984 (15 U.S.C. 4301(b)) is amended--
            (1) in the matter preceding paragraph (1) by striking 
        ``research and development'';
            (2) in paragraph (1) by striking ``that is not reasonably 
        required to conduct the research and development that is'' and 
        inserting ``if such information is not reasonably required to 
        carry out'';
            (3) by amending paragraph (2) to read as follows:
            ``(2) entering into any agreement or engaging in any other 
        conduct restricting, requiring, or otherwise involving the 
        marketing, distribution, or provision by any person who is a 
        party to such venture of any product, process, or service, 
        other than--
                    ``(A) the distribution among the parties to such 
                venture, in accordance with such venture, of a product, 
                process, or service produced by such a venture,
                    ``(B) the marketing of proprietary information, 
                such as patents and trade secrets, developed through 
                such venture formed under a written agreement entered 
                into before the date of enactment of the National 
                Cooperative Production Amendments Act of 1993, or
                    ``(C) the licensing, conveying, or transferring of 
                intellectual property, such as patents and trade 
                secrets, developed through such venture formed under a 
                written agreement entered into on or after the date of 
                enactment of the National Cooperative Production 
                Amendments Act of 1993,'';
            (4) in paragraph (3)--
                    (A) in subparagraph (A) by striking ``or 
                developments not developed through'' and inserting ``, 
                developments, products, processes, or services not 
                developed through or produced by'';
                    (B) in subparagraph (B) by striking ``such party'' 
                and inserting ``any person who is a party to such a 
                venture''; and
                    (C) by striking the period at the end and inserting 
                a comma; and
            (5) by adding at the end the following new paragraphs:
            ``(4) entering into any agreement or engaging in any other 
        conduct allocating a market with a competitor,
            ``(5) exchanging information among competitors relating to 
        production (other than production by such venture) of a 
        product, process, or service if such information is not 
        reasonably required to carry out the purpose of the venture,
            ``(6) entering into any agreement or engaging in any other 
        conduct restricting, requiring, or otherwise involving the 
        production (other than the production by such venture) of a 
        product, process, or service,
            ``(7) using existing facilities in connection with the 
        production of a product, process, or service by the venture 
        unless the use is for the production of a new product or 
        technology, and
            ``(8) except as provided in paragraphs (2), (3), and (6), 
        entering into any agreement or engaging in any other conduct to 
        restrict or require participation by any person who is a party 
        to the venture, in any unilateral or joint activity that is not 
        reasonably required to carry out the purpose of the venture.''.
    (d) Rule of Reason Standard.--Section 3 of the National Cooperative 
Research Act of 1984 (15 U.S.C. 4302) is amended--
            (1) by striking ``research and development'' the first 
        place it appears;
            (2) by striking ``and development'' the last place it 
        appears and inserting ``, development, product, process, and 
        service''; and
            (3) by adding at the end the following:
``For the purpose of determining a properly defined, relevant market, 
worldwide capacity shall be considered to the extent that it is 
appropriate in the circumstances.''.
    (e) Technical Amendments.--The National Cooperative Research Act of 
1984 (15 U.S.C. 4301 et seq.) is amended--
            (1) in section 4 (a)(1), (b)(1), (c)(1), and (e) by 
        striking ``research and development'' each place it appears; 
        and
            (2) in section 5(a) in the matter preceding paragraph (1) 
        by striking ``research and development''.
    (f) Disclosure.--Section 6 of the National Cooperative Research Act 
of 1984 (15 U.S.C. 4305) is amended--
            (1) in the heading by striking ``research and 
        development'';
            (2) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph 
                (1);
                    (B) by striking the period at the end of paragraph 
                (2) and inserting ``, and''; and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) if a purpose of the venture is the production of a 
        product, process, or service described in section 2(a)(6)(D), 
        the identity and nationality of any person who is a party to 
        the venture or who controls any party to the venture, whether 
        separately or with 1 or more other persons acting as a group 
        for the purpose of controlling that person.''; and
            (3) in subsections (a), (d)(2), and (e) by striking 
        ``research and development'' each place it appears.
    (g) Limitation.--The National Cooperative Research Act of 1984 (15 
U.S.C. 4301 et seq.) is amended by adding at the end the following new 
section:

   ``application of section 4 protections to production of products, 
                        processes, and services

    ``Sec. 7. Notwithstanding sections 4 and 6, the protections of 
section 4 shall not apply with respect to a joint venture's production 
of a product, process, or service described in section 2(a)(6)(D) 
unless--
            ``(1) the principal facilities for such production are 
        located in the United States or its territories, and
            ``(2) each person who controls any party to the venture 
        (including the party itself) is a United States person, or a 
        foreign person from a country the law of whom accords antitrust 
        treatment no less favorable to United States persons than to 
        that country's domestic persons with respect to participation 
        in joint ventures for production.''.

SEC. 4. REPORTS ON JOINT VENTURES AND UNITED STATES COMPETITIVENESS.

    (a) Purpose.--The purpose of the reports required by this section 
is to inform Congress and the American people of the effect of the 
National Cooperative Research and Production Act of 1993 on the 
competitiveness of the United States in key technological areas of 
research, development, and production.
    (b) Annual Report by the Attorney General.--In the 30-day period 
beginning at each 1-year interval after the date of enactment of this 
Act, the Attorney General shall submit to the Committee on the 
Judiciary of the House of Representatives and the Committee on the 
Judiciary of the Senate--
            (1) a list of joint ventures for which notice was filed 
        under section 6(a) of the National Cooperative Research and 
        Production Act of 1993 during the 12-month period for which the 
        report is made, including the purpose of each joint venture and 
        the identity and nationality of each party to the joint venture 
        as described in that section; and
            (2) a list of cases and proceedings brought during that 
        period under the antitrust laws by the Department of Justice 
        and the Federal Trade Commission with respect to joint ventures 
        for which notice was filed under that section at any time.
    (c) Triennial Report by the Attorney General.--In the 30-day period 
beginning at each 3-year interval after the date of enactment of this 
Act, the Attorney General, after consultation with such other agencies 
as the Attorney General considers to be appropriate, shall submit to 
the Committee on the Judiciary of the House of Representatives and the 
Committee on the Judiciary of the Senate--
            (1)(A) a description of the technological areas of 
        research, development, and production most commonly pursued by 
        joint ventures for which notice was filed under section 6(a) of 
        the National Cooperative Research and Production Act of 1993 
        during the 3-year period for which the report is made; and
            (B) an analysis of the trends in the competitiveness of 
        United States industry in those areas; and
            (2) a supplement to the report submitted by the Attorney 
        General under subsection (d) reflecting changes in antitrust 
        treatment of joint ventures under the laws of other nations.
    (d) Review of Antitrust Treatment Under Foreign Laws.--Not later 
than 1 year after the date of enactment of this Act, the Attorney 
General, after consultation with such other agencies as the Attorney 
General considers to be appropriate, shall submit to the Committee on 
the Judiciary of the House of Representatives and the Committee on the 
Judiciary of the Senate a report on the antitrust treatment of United 
States businesses that are parties to joint ventures under the law of 
each foreign nation in which there is operating a business that filed 
notice under section 6(a) of the National Cooperative Research and 
Production Act of 1993.

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