[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1086 Reported in House (RH)]






                                                  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.




                                                  Union Calendar No. 63

108th CONGRESS

  1st Session

                               H. R. 1086

                          [Report No. 108-125]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                              May 22, 2003

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed