19–006

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 108–125

STANDARDS DEVELOPMENT ORGANIZATION 

ADVANCEMENT ACT OF 2003

MAY 22, 2003.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 1086] 

[Including cost estimate of the Congressional Budget Office]

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1086) 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, having considered the same, reports favorably thereon without amendment and recommends that 

the bill do pass.

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2

Background and Need for the Legislation ............................................................. 3

Hearings ................................................................................................................... 7

Committee Consideration ........................................................................................ 7

Vote of the Committee ............................................................................................. 7

Committee Oversight Findings ............................................................................... 7

Performance Goals and Objectives ......................................................................... 7

New Budget Authority and Tax Expenditures ...................................................... 8

Congressional Budget Office Cost Estimate .......................................................... 8

Constitutional Authority Statement ...................................................................... 9

Section-by-Section Analysis and Discussion .......................................................... 9

Changes in Existing Law Made by the Bill, as Reported ..................................... 11

Markup Transcript .................................................................................................. 15

2

PURPOSE AND SUMMARY

H.R. 1086, the ‘‘National Cooperative Standards Development 

Act of 2003,’’ amends the National Cooperative Research Act 

(NCRA) to extend limited antitrust protection to specified activities 

of standard development organizations (‘‘SDOs’’) relating to the development of voluntary consensus standards. These amendments 

preserve and promote the ability of SDOs to issue standards by: (1) 

codifying the ‘‘rule of reason’’ for antitrust scrutiny of their activities; (2) eliminating the threat of treble damages for specified 

standards development activity if SDOs disclose the scope and nature of this activity to the Department of Justice and Federal 

Trade Commission; and (3) providing for the recovery of attorney 

fees to substantially prevailing parties. 

As indicated above, H.R. 1086 is an amendment to the underlying NCRA. The NCRA, as originally enacted in 1984 and subsequently amended in 1993, has three operative provisions. The first 

is a simple codification of the consensus view found in existing law 

that properly structured joint venture activity will be judged under 

the rule of reason standard—a reasonableness test—under the 

antitrust laws. This provision of the NCRA, as further amended by 

H.R. 1086, would prohibit courts from condemning standards development activity without first considering its potential competitive 

benefits. The second provision is a voluntary notification system 

whereby a standards development organization may disclose the 

nature of its activities to the antitrust enforcement agencies and 

thereby receive reduced damages exposure from civil suits based on 

the activities disclosed. Compliance with the reporting procedures 

would not result in a ‘‘certification’’ that the standards development 

activity is legal under the antitrust laws; thus, even with disclosure, standards development activity later shown to be anticompetitive could still be challenged through the traditional dual 

system of private and public enforcement but would be subject to 

single damages. The third provision awards costs, including a reasonable attorney’s fee, to the substantial prevailing parties under 

certain conditions. 

The notification procedure developed in the NCRA now has the 

advantage of 19 years of operational experience on the part of the 

antitrust agencies and many private parties. Notification also imposes fewer resource burdens on both the enforcement agencies and 

private parties seeking to utilize the procedure than would a certification system; unlike certification, notification would have a limited scope of initial review and no requirement of continuous monitoring by the agencies. Additionally, it eliminates the risk of possible misapplication of legal standards, since the antitrust agencies 

merely act as enforcement ‘‘screeners’’ (as with other business review procedures) and not as adjudicators of the legality of standards development activity. 

Finally, the NCRA links the disclosure process to a limitation on 

private damages against standards development organizations acting within the scope of their disclosure. Because the NCRA merely 

de-trebles (but does not eliminate) antitrust damages for injured 

parties, a private right of action is preserved. 

3

1David J. Teece, ‘‘Information Sharing, Innovation and Antitrust,’’ 62 Antitrust L.J. 465, 475 

(1994). 2Samuel Miller, Antitrust and Standard-Setting, PRAC.L. INST., July 21, 2001. 3 Allied Tube and Conduit Corp. v. Indian Head, Inc. 486 U.S. 492, 500 (1988). 4See Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Company, 472 

U.S. 284 (1985). 

BACKGROUND AND NEED FOR THE LEGISLATION

STANDARD DEVELOPMENT ORGANIZATIONS AND ANTITRUST

Voluntary Consensus Standards and Competition 

Standard development organizations play a pivotal role in promoting free market competition. Technical standards promote product competition by ensuring a common interface between products 

that may be substituted for one another. ‘‘Voluntary consensus 

standards’’ are technical standards written by hundreds of nonprofit standard developing organizations such as the American Society of Mechanical Engineers, the American Society for Testing 

and Materials, and the National Fire Protection Association. While 

in most countries standards are promulgated by government agencies, the United States has shifted toward a model whereby standard development organizations develop voluntary consensus standards for use by industry and various levels of government. These 

standards are then codified in industry and government codes. 

Technical or compatibility standards benefit consumers and producers alike. As economist Professor David Teece has noted:

Compatibility standards are essential if products and their 

complements are to be used in a system. Computers need software, compact disc players need compact discs, televisions need 

programs, and bolts need nuts. Compatibility standards define 

the format for the interface between the core and complementary good. . . [i]f products from different manufacturers are 

compatible, this may intensify rivalry among competitors and 

make it easier for buyers to compare product attributes. Compatibility standards also ease entry for new and complementary technologies and reduce the risk that a consumer will be 

‘‘stranded’’ with a product which is incompatible with others 

[m]oreover, price competition is enhanced when competing 

manufacturers can supply substitutable products.1

While standards are widely viewed to enhance competition, 

standard-setting activities might give rise to legitimate antitrust 

concerns if anti-competitive conduct like output restrictions, market divisions, vertical restraints, or other forms of exclusionary conduct occur.2 As the Supreme Court has recognized: ‘‘[] agreement 

on a product standard is, after all, implicitly an agreement not to 

manufacture, distribute or purchase certain types of products Accordingly, private standard-setting organizations have traditionally 

been objects of antitrust scrutiny.’’ 3

Antitrust challenges to standard-setting activities are currently 

evaluated under the ‘‘rule of reason’’—a judicially-created doctrine 

that seeks to balance the pro-competitive and anti-competitive market effects of a challenged practice before determining whether a 

violation of the antitrust laws has occurred.4 The rationale for this 

antitrust standard is that SDOs, as non-profits serving a cross-section of an industry, are unlikely to engage in anti-competitive conVerDate Jan 31 2003 19:50 May 22, 2003 Jkt 019006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6601 E:\HR\OC\HR125.XXX HR125
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5Federal Participation in the Development and Use of Voluntary Consensus Standards and 

in Conformity Assessment Activities, 63 Fed. Reg. 8545 (February 19, 1998); available at:

<http://www.whitehouse.gov/omb/circulars/a119/a119.html>. 6Pub. L. No. 104–113, 110 Stat. 775 (1995). 7 H.R. Rept. No. 104–390 (1995). 8 ASME v. Hyrdolevel, 456 U.S. 556 (1982). 9 15 USC §§ 1–7 (2002). 

duct creating market dominance. Potential anti-competitive conduct is also mitigated by the manner in which voluntary consensus 

standards are developed and implemented. In order to be used by 

Federal agencies, the process of developing voluntary standards 

must adhere to principles of openness, voluntariness, balance, cooperation, transparency, consensus, and due process. These requirements were most recently articulated in OMB Circular A–119 

(February 19, 1998).5

Notwithstanding these safeguards, treble damages may still be 

awarded against SDOs if their conduct is determined to be anticompetitive under the rule of reason. Until recently, standard-setting activities were largely directed and managed by government 

entities that were immune from antitrust scrutiny. Beginning in 

the 1990’s, Congress concluded that government could no longer 

keep pace with rapid technological and market change, and that 

government-directed standard-setting activity was often cumbersome, duplicative, and inefficient. To address this concern, Congress passed the National Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’). 6 NTTAA’s express goal was to encourage 

government agencies to assist in the development of voluntary consensus standards and to adopt such standards in favor of often outmoded government standards whenever possible.7 While the 

NTTAA succeeded by almost every measure, SDOs continue to be 

vulnerable to litigation even after its passage. 

Principal Cases 

While SDOs have been subject to various civil claims, the experiences of the American Society of Mechanical Engineers (‘‘ASME’’), 

the American Society for Testing and Materials (‘‘ASTM’’) and the 

National Fire Protection Association (‘‘NFPA’’) are particularly instructive. 

ASME v. Hydrolevel 

ASME sets standards for a variety of mechanical devices. In 

ASME v. Hydrolevel,8 a divided Supreme Court held an SDO liable 

under the treble damages provisions of the Sherman Antitrust 

Act.9 Hydrolevel, a water boiler manufacturer, alleged that the 

Chair and Vice Chair of the Subcommittee overseeing a section of 

ASME’s Boiler and Pressure Vessel Code Committee manipulated 

an interpretation of ASME’s Code in furtherance of a conspiracy in 

restraint of trade. Hydrolevel contended that this interpretation 

prevented it from achieving market penetration with a technologically superior low-water-cut-off device. The interpretation was 

solicited by McDonnell and Miller, long the dominant manufacturer 

of low-water-cut-off devices used on heating boilers. This interpretation was then rendered by the Subcommittee Vice Chair, who 

was also a McDonnell and Miller employee, and subsequently 

transmitted over the signature of his employer before being approved by the Subcommittee Chair. Approval by the Subcommittee 

5

10Supra, note 8. 11 Id. 12See id. at 597. 

Chair and Vice Chair allegedly occurred after a meeting between 

these two individuals and representatives from McDonnell and Miller. 

This seemingly innocuous interpretation of ASME’s Code addressed the use of a time delay feature which was similar to that 

being offered by Hydrolevel. It was then aggressively used by 

McDonnell and Miller’s sales force to assert that Hydrolevel’s device did not meet Boiler Code requirements. These representations 

were alleged to have thwarted an anticipated market breakthrough 

from Hydrolevel’s purportedly superior device. Hydrolevel’s lowwater cut-off device was met with stiff market resistance because 

of the perception that its device did not comply with ASME’s Boiler 

Code, which had been adopted as a regulatory requirement and 

given the force of law by most States. As a result, Hydrolevel subsequently was forced out of the market. 

The initial target of Hyrdolevel’s antitrust suit was McDonnell 

and Miller, the purported beneficiary of the alleged conspiracy. 

ASME was perceived as a relevant, but not necessary, defendant. 

However, before trial, McDonnell and Miller settled with 

Hydrolevel, leaving ASME as the sole defendant. The trial judge 

instructed the jury that ASME could be found liable only if had 

ratified or adopted the actions of its Subcommittee officers in order 

to advance ASME’s market interests. Notwithstanding these instructions, the jury returned a verdict against ASME for $3.3 million, prior to trebling.10

The appeals court enunciated a novel legal theory to support 

ASME’s liability under the antitrust laws by concluding that liability could attach if ASME’s agents had acted within the scope of 

their ‘‘apparent authority.’’ 11 On appeal, a sharply divided Supreme Court affirmed and amplified this view. In a strongly written dissent joined by Justices Rehnquist and White, Justice Powell 

stated: 

The Court today adopts an unprecedented theory of antitrust 

liability, one applied specifically to a nonprofit standards-setting association but a theory that could encompass a broad 

spectrum of our country’s nonprofit associations. The theory, 

based on the agency concept of ‘‘apparent authority,’’ would impose the potentially crippling burden of treble damages. In this 

case, the Court specifically holds that standards-setting organizations may be held liable for the acts of their agents even 

though the organization never ratified, authorized, or derived 

any benefit whatsoever from the fraudulent activity of the 

agency. [S]uch an expansive rule of strict liability, at least as 

applied to nonprofit organizations, is inconsistent with the 

weight of precedent and the intent of Congress, unsupported 

by the rules of agency law that the Court purports to apply, 

and irrelevant to the achievement of the antitrust laws.12

ASTM Litigation 

ASTM’s recent litigation experience points to the need to clarify 

existing standards of liability for SDOs. The litigation, initiated by 

6

13 40 C.F.R. Part 280 (1994). 

an ASTM member against ASTM and other members, arose after 

consensus standards were developed in an open and balanced process initiated upon the request of the Environmental Protection 

Agency (‘‘EPA’’). In particular, the EPA requested that ASTM develop alternative assessment standards to supplement its own internal inspection process for assessing underground storage tanks 

(‘‘USTs’’) more than 10 years old. This request was issued to help 

implement an EPA regulation mandating that all USTs be upgraded, replaced, or eliminated by 1998.13 Following transparent 

voluntary standards development procedures, ASTM produced a 

document which incorporated alternative methods of assessment. 

This process was vigorously opposed by proponents of the existing method, tank inspectors, and tank liners. ASTM subsequently 

approved a standard—which received the full backing of the EPA—

that enhanced competition by expanding the number of EPA-approved UST assessment methods from one to four. After 6 years of 

participation in the ASTM process, opponents of the standards filed 

an antitrust suit naming Corrpro Companies, WRA/Rogers, and 

ASTM as defendants. While all parties to this suit agreed to a 

sealed settlement early in 2002, proponents of H.R. 1086 point to 

the chilling effect of this litigation on standard-setting activities by 

SDOs. 

Allied Tube & Conduit Corp. v. Indian Head, Inc. 

The NFPA sets and publishes fire protection standards through 

a member voting process. Standards approved by a majority of 

NFPA members are generally adopted as State law and codified in 

the National Electric Code. In 1980, this Code permitted the use 

of steel, but not plastic electrical conduits. The defendant was the 

nation’s largest steel conduit manufacturer and a NFPA member. 

Allied Tube, a plastic electrical conduit manufacturer, had proposed the inclusion of plastic electrical conduits in the 1981 Code 

and received preliminary approval by an NFPA panel. Prior to the 

1980 meeting at which the final NFPA vote occurred, however, the 

defendant and other steel industry and NFPA members agreed to 

‘‘pack’’ the NFPA with new members in order to defeat the proposal. The proposal was rejected by a membership that included 

230 such ‘‘new’’ members. Allied Tube successfully sued in Federal 

district court, alleging unreasonable restraints on trade, in violation of the Sherman Act. 

After that decision was overturned on appeal, the Supreme Court 

held for Allied Tube, rejecting defendant’s argument that it was immune from the antitrust laws under what is commonly referred to 

as the Noerr-Pennington doctrine (which effectively, makes ‘‘concerted efforts to restrain or monopolize trade by petitioning government officials’’ immune from the antitrust laws). In doing so, the 

Court held that while standards development activities, by their 

nature, may provide an opportunity for anti-competitive behaviors, 

‘‘private standard-setting programs can be pro-competitive when 

they are based on the merits of objective expert judgments and 

through procedures that prevent the standard-setting process from 

being biased by members with economic interests in stifling comVerDate Jan 31 2003 19:50 May 22, 2003 Jkt 019006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6601 E:\HR\OC\HR125.XXX HR125
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14Supra, note 10, at 509. 15 Id. at 511. 

petition.’’ 14 Responding to the defendant’s asserted defense, the 

Court held that the statutory adoption of a private standard does 

not determine whether that private entity’s conduct is immune 

from the antitrust laws. Rather, the scope of protection afforded by 

Noerr-Pennington ‘‘depends on the source, context, and nature of 

the anti-competitive restraint at issue.’’ 15

H.R. 1086, THE ‘‘NATIONAL COOPERATIVE STANDARDS

DEVELOPMENT ACT OF 2003’’

H.R. 1086 clarifies the antitrust status of qualifying standards 

developers to facilitate the development and promulgation of voluntary consensus standards. H.R. 1086 eliminates the threat of treble damages, codifies the rule of reason for antitrust claims against 

these organizations, and provides for the recovery of attorney fees 

for substantially prevailing parties. 

HEARINGS

The Committee’s Task Force on Antitrust held a hearing on H.R. 

1086 on April 9, 2003. The following witnesses testified: James M. 

Shannon, President, National Fire Protection Association; David 

Karmol, Vice President, Public Affairs, American National Standards Institute; Earl Everett, Director, Division of Safety Engineering, Department of Labor, State of Georgia. Each witness affirmed 

the important role played by standards developers and expressed 

strong support for the bill. 

COMMITTEE CONSIDERATION

On May 7, 2003, the Committee met in open session and ordered 

favorably reported the bill H.R. 1086, without amendment by voice 

vote, a quorum being present. 

VOTE OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee notes that during the full 

Committee consideration of H.R. 1086 the Committee took no rollcall votes. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

H.R. 1086 does not authorize funding. Therefore, clause 3(c)(4) of 

rule XIII of the Rules of the House of Representatives is inapplicable. 

8

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of House rule XIII is inapplicable because this legislation does not provide new budgetary authority or increased tax 

expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

H.R. 1086, the following estimate and comparison prepared by the 

Director of the Congressional Budget Office under section 402 of 

the Congressional Budget Act of 1974:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 19, 2003. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1086, the Standards Development Organization Advancement Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Lanette J. Walker (for 

Federal costs), who can be reached at 226–2860, and Victoria Heid 

Hall (for the state and local government impact), who can be 

reached at 225–3220. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN.

Enclosure

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 1086—Standards Development Organization Advancement Act 

of 2003. 

H.R. 1086 would provide certain protections from antitrust laws 

to standards development organizations (SDOs) if they disclose the 

scope and nature of the organization’s activity to the Department 

of Justice and the Federal Trade Commission. (SDOs are nonprofit 

organizations that plan, develop, establish, or coordinate voluntary 

consensus standards for use by industry and Government.) Under 

antitrust laws, the Department of Justice and the Federal Trade 

Commission are required to publish notices of SDO activities in the 

Federal Register. CBO estimates, however, that the cost of publishing such routine notifications would not be significant in any 

year over the 2004–2008 period because of the small number of notices that are likely to be filed. 

H.R. 1086 would expand the scope of an existing preemption of 

state antitrust laws to apply to SDOs. Such a preemption is an 

intergovernmental mandate as defined in the Unfunded Mandates 

Reform Act (UMRA). However, CBO estimates that this mandate 

would impose no costs on state, local, or tribal governments and 

would not, therefore, exceed the threshold in UMRA ($59 million 

9

in 2003, adjusted for inflation). This bill contains no new privatesector mandates as defined in UMRA. 

The CBO staff contacts for this estimate are Lanette J. Walker 

(for Federal costs), who can be reached at 226–2860, and Victoria 

Heid Hall (for the state and local government impact), who can be 

reached at 225–3220. This estimate was approved by Peter H. 

Fontaine, Deputy Assistant Director for Budget Analysis. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Section 1. Short Title. 

Section 1 titles the bill the ‘‘National Cooperative Standards Development Act of 2003.’’

Section 2. Findings. 

Section 2 sets forth the findings and purposes of the bill as they 

relate to standard-developing activities and SDOs. The findings explain why the NCRA was originally enacted and amended. This 

section also discusses how passage of the NTTAA (which replaced 

many government-written standards with voluntary consensus 

standards) inadvertently increased the vulnerability of these organizations to antitrust litigation. This section concludes by affirming 

the critical importance of SDOs to the competitiveness of the national economy. 

Section 3. Definitions. 

Section 3 amends the definitions section of the NCRA to include 

the terms: ‘‘standards developments activity;’’ ‘‘standard development organization;’’ ‘‘technical standard;’’ and ‘‘voluntary consensus 

standard’’ (as defined in OMB Circular Number A–119). 

In addition, this section specifically excludes antitrust protections 

for standards development activity that involves: (1) the exchange 

of cost, sales, or pricing information not reasonably required for the 

purpose of developing a voluntary consensus standard, or (2) any 

anti-competitive activity for a for-profit entity that stands to financially benefit from participating in any standards development activity. 

The definition of ‘‘standards development activity,’’ as set forth in 

section 3(7), is broad enough to encompass any action taken by an 

SDO in ‘‘developing, promulgating—or otherwise maintaining a voluntary consensus standard—including actions related to the intellectual property policies’’ of the SDO. The Standards Development 

Organization Advancement Act is not intended to change or influence existing intellectual property policies currently utilized by various SDOs (including, but not limited to, patent searches), nor to 

affect or influence new intellectual property policies that may be 

developed in the future. Such policies are vitally important to ensuring a level playing field among all users of a standard that incorporates patented technology. In addition, the legislation is not 

10

intended to change or alter the application of existing antitrust 

laws with respect to intellectual property. 

The Act seeks to encourage disclosure by owners of intellectual 

property owners of relevant intellectual property owners and proposed licensing terms. It further encourages discussion among intellectual property owners and other interested standards participants regarding the terms under which relevant intellectual property owners would be made available for use in conjunction with 

the standard or proposed standard. 

Section 4. Rule of Reason Standard. 

Section 4 amends the NCRA to extend application of the rule of 

reason to specified standards development activity. Under existing 

antitrust law, the rule of reason standard requires a balancing of 

the pro-competitive effects of alleged misconduct against the anticompetitive effects of particular conduct in determining whether a 

violation of the antitrust laws has occurred. 

Section 5. Limitation of Recovery. 

Section 5 amends the NCRA to limit recovery of antitrust damages against SDOs if such organizations pre-disclose the nature 

and scope of the standards development activity to antitrust authorities. SDOs remain liable for treble damages under the antitrust laws if they fail to pre-disclose the nature and scope of standards setting activity. 

Section 6. Attorneys’ Fees. 

Section 6 amends the NCRA to include SDOs within the existing 

NCRA framework for awarding reasonable attorneys’ fees to the 

substantially prevailing party. 

Section 7. Disclosure of Standards Developments Activity. 

Section 7 amends the NCRA to require SDOs to adhere to the 

pre-disclosure framework set out in the NCRA. The pre-disclosure 

model embraced by the NCRA permits defined joint venture activity to be disclosed to the Department of Justice and the Federal 

Trade Commission in exchange for limited antitrust protections. To 

be within the ambit of these protections, SDOs must disclose the 

scope and nature of standards setting activity within 90 days of the 

commencement of this activity or 90 days of enactment of this legislation, whichever is later. Additional disclosures of new collaborative activities can be submitted to the antitrust agencies to extend the liability protections—but such disclosures will not protect 

activity that encompasses per se violations of the antitrust laws. 

This section also states that an SDO’s decision not to avail itself 

of pre-disclosure requirements will not create a negative inference 

that the SDO is engaged in anti-competitive conduct. 

Section 8. Rule of Construction. 

Section 8 states that this legislation shall not be construed to 

alter or modify the antitrust treatment of parties participating in 

standards development activity of SDOs within the scope of the legislation or other organizations and parties engaged in standard-setting processes not within the scope of this legislation. 

11

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman):

NATIONAL COOPERATIVE RESEARCH AND PRODUCTION 

ACT OF 1993

* * * * * * *

DEFINITIONS

SEC. 2. (a) For purposes of this Act: 

(1) * * *

* * * * * * *

(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. 

* * * * * * *

(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.

12

RULE OF REASON STANDARD

SEC. 3. In any action under the antitrust laws, or under any 

State law similar to the antitrust laws, the conduct øof any person 

in making or performing a contract to carry out a joint venture 

shall¿ 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 not be deemed illegal per se; such conduct shall be judged on 

the basis of its reasonableness, taking into account all relevant factors affecting competition, including, but not limited to, effects on 

competition in properly defined, relevant research, development, 

product, process, and service markets. For the purpose of determining a properly defined, relevant market, worldwide capacity 

shall be considered to the extent that it may be appropriate in the 

circumstances. 

LIMITATION ON RECOVERY

SEC. 4. (a) Notwithstanding section 4 of the Clayton Act (15 

U.S.C. 15) and in lieu of the relief specified in such section, any 

person who is entitled to recovery on a claim under such section 

shall recover the actual damages sustained by such person, interest 

calculated at the rate specified in section 1961 of title 28, United 

States Code, on such actual damages as specified in subsection (d) 

of this section, and the cost of suit attributable to such claim, including a reasonable attorney’s fee pursuant to section 5 of this Act 

if such claim—

(1) results from conduct that is within the scope of a notification that has been filed under section 6(a) of this Act for a 

joint venture, for a standards development activity engaged in 

by a standards development organization against which such 

claim is made, and 

* * * * * * *

(b) Notwithstanding section 4C of the Clayton Act (15 U.S.C. 

15c), and in lieu of the relief specified in such section, any State 

that is entitled to monetary relief on a claim under such section 

shall recover the total damage sustained as described in subsection 

(a)(1) of such section, interest calculated at the rate specified in 

section 1961 of title 28, United States Code, on such total damage 

as specified in subsection (d) of this section, and the cost of suit attributable to such claim, including a reasonable attorney’s fee pursuant to section 4C of the Clayton Act if such claim—

(1) results from conduct that is within the scope of a notification that has been filed under section 6(a) of this Act for a 

joint venture, for a standards development activity engaged in 

by a standards development organization against which such 

claim is made, and 

* * * * * * *

(c) Notwithstanding any provision of any State law providing 

damages for conduct similar to that forbidden by the antitrust 

laws, any person who is entitled to recovery on a claim under such 

provision shall not recover in excess of the actual damages susVerDate Jan 31 2003 19:50 May 22, 2003 Jkt 019006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6601 E:\HR\OC\HR125.XXX HR125
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tained by such person, interest calculated at the rate specified in 

section 1961 of title 28, United States Code, on such actual damages as specified in subsection (d) of this section, and the cost of 

suit attributable to such claim, including a reasonable attorney’s 

fee pursuant to section 5 of this Act if such claim—

(1) results from conduct that is within the scope of a notification that has been filed under section 6(a) of this Act for a 

joint venture, for a standards development activity engaged in 

by a standards development organization against which such 

claim is made, and 

* * * * * * *

(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.

ø(e)¿ (f) This section shall be applicable only if the challenged 

conduct of a person defending against a claim is not in violation of 

any decree or order, entered or issued after October 11, 1984,, in 

any case or proceeding under the antitrust laws or any State law 

similar to the antitrust laws challenging such conduct as part of a 

joint venture, or of a standards development activity engaged in by 

a standards development organization. 

ATTORNEY’S FEES

SEC. 5. (a) Notwithstanding sections 4 and 16 of the Clayton 

Act, in any claim under the antitrust laws, or any State law similar 

to the antitrust laws, based on the conducting of a joint venture, 

or of a standards development activity engaged in by a standards 

development organization, the court shall, at the conclusion of the 

action—

(1) * * *

* * * * * * *

(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.

14

DISCLOSURE OF JOINT VENTURE

SEC. 6. (a)(1) Any party to a joint venture, acting on such venture’s behalf, may, not later than 90 days after entering into a 

written agreement to form such venture or not later than 90 days 

after October 11, 1984, whichever is later, file simultaneously with 

the Attorney General and the Commission a written notification 

disclosing—

ø(1)¿ (A) the identities of the parties to such venture, 

ø(2)¿ (B) the nature and objectives of such venture, and 

ø(3)¿ (C) if a purpose of such venture is the production of 

a product, process, or service, as referred to in section 

2(a)(6)(D), the identity and nationality of any person who is a 

party to such venture, or who controls any party to such venture whether separately or with one or more other persons acting as a group for the purpose of controlling such party. 

Any party to such venture, acting on such venture’s behalf, may 

file additional disclosure notifications pursuant to this section as 

are appropriate to extend the protections of section 4. In order to 

maintain the protections of section 4, such venture shall, not later 

than 90 days after a change in its membership, file simultaneously 

with the Attorney General and the Commission a written notification disclosing such change.

(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.

(b) Except as provided in subsection (e), not later than 30 days 

after receiving a notification filed under subsection (a), the Attorney General or the Commission shall publish in the Federal Register a notice with respect to such venture that identifies the parties to such venture and that describes in general terms the area 

of planned activity of such venture, 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. Prior to its publication, the contents 

of such notice shall be made available to the parties to such venture or available to such organization, as the case may be. 

* * * * * * *

(d) Except with respect to the information published pursuant 

to subsection (b)—

(1) * * *

15

(2) all other information obtained by the Attorney General 

or the Commission in the course of any investigation, administrative proceeding, or case, with respect to a potential violation 

of the antitrust laws by the joint venture, or the standards development activity, with respect to which such notification was 

filed, 

shall be exempt from disclosure under section 552 of title 5, United 

States Code, and shall not be made publicly available by any agency of the United States to which such section applies except in a 

judicial or administrative proceeding in which such information 

and material is subject to any protective order. 

(e) Any øperson who¿ person or standards development organization that files a notification pursuant to this section may withdraw such notification before notice of the joint venture involved is 

published under subsection (b). Any notification so withdrawn shall 

not be subject to subsection (b) and shall not confer the protections 

of section 4 on any person or any standards development organization with respect to whom such notification was filed. 

* * * * * * *

(g)(1) Except as provided in paragraph (2), for the sole purpose 

of establishing that a person or standards development organization is entitled to the protections of section 4, the fact of disclosure 

of conduct under section 6(a) and the fact of publication of a notice 

under section 6(b) shall be admissible into evidence in any judicial 

or administrative proceeding. 

* * * * * * *

MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, MAY 7, 2003

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:00 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the Committee] presiding. 

Chairman SENSENBRENNER. The Committee will be in order. A 

quorum is present. Pursuant to notice, I now call up the bill, H.R. 

1086, the ‘‘Standards Development Organization Advancement Act 

of 2003’’ for purposes of markup and move its favorable recommendation to the full House. Without objection, the bill will be 

considered as read and open for amendment at any point. 

[The bill, H.R. 1086, follows:]

16

1

I

108TH CONGRESS

1ST SESSION H. R. 1086

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

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,


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•HR 1086 IH

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Standards Develop3 ment Organization Advancement Act of 2003’’.

4 SEC. 2. FINDINGS.

5 The Congress finds the following:

6 (1) In 1993, the Congress amended and re7 named the National Cooperative Research Act of

8 1984 (now known as the National Cooperative Re9 search and Production Act of 1993 (15 U.S.C. 4301

10 et seq.)) by enacting the National Cooperative Pro11 duction Amendments of 1993 (Public Law 103–42)

12 to encourage the use of collaborative, procompetitive

13 activity in the form of research and production joint

14 ventures that provide adequate disclosure to the

15 antitrust enforcement agencies about the nature and

16 scope of the activity involved.

17 (2) Subsequently, in 1995, the Congress in en18 acting the National Technology Transfer and Ad19 vancement Act of 1995 (15 U.S.C. 272 note) recog20 nized the importance of technical standards devel21 oped by voluntary consensus standards bodies to our

22 national economy by requiring the use of such stand23 ards to the extent practicable by Federal agencies

24 and by encouraging Federal agency representatives

25 to participate in ongoing standards development ac26 tivities. The Office of Management and Budget on


I1086.AAC
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3

•HR 1086 IH

1 February 18, 1998, revised Circular A–119 to re2 flect these changes made in law.

3 (3) Following enactment of the National Tech4 nology Transfer and Advancement Act of 1995,

5 technical standards developed or adopted by vol6 untary consensus standards bodies have replaced

7 thousands of unique Government standards and

8 specifications allowing the national economy to oper9 ate in a more unified fashion.

10 (4) Having the same technical standards used

11 by Federal agencies and by the private sector per12 mits the Government to avoid the cost of developing

13 duplicative Government standards and to more read14 ily use products and components designed for the

15 commercial marketplace, thereby enhancing quality

16 and safety and reducing costs.

17 (5) Technical standards are written by hun18 dreds of nonprofit voluntary consensus standards

19 bodies in a nonexclusionary fashion, using thousands

20 of volunteers from the private and public sectors,

21 and are developed under the standards development

22 principles set out in Circular Number A–119, as re23 vised February 18, 1998, of the Office of Manage24 ment and Budget, including principles that require


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4

•HR 1086 IH

1 openness, balance, transparency, consensus, and due

2 process. Such principles provide for—

3 (A) notice to all parties known to be af4 fected by the particular standards development

5 activity,

6 (B) the opportunity to participate in

7 standards development or modification,

8 (C) balancing interests so that standards

9 development activities are not dominated by any

10 single group of interested persons,

11 (D) readily available access to essential in12 formation regarding proposed and final stand13 ards,

14 (E) the requirement that substantial

15 agreement be reached on all material points

16 after the consideration of all views and objec17 tions, and

18 (F) the right to express a position, to have

19 it considered, and to appeal an adverse decision.

20 (6) There are tens of thousands of voluntary

21 consensus standards available for government use.

22 Most of these standards are kept current through in23 terim amendments and interpretations, issuance of

24 addenda, and periodic reaffirmation, revision, or

25 reissuance every 3 to 5 years.


I1086.AAE
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5

•HR 1086 IH

1 (7) Standards developed by government entities

2 generally are not subject to challenge under the anti3 trust laws.

4 (8) Private developers of the technical stand5 ards that are used as Government standards are

6 often not similarly protected, leaving such developers

7 vulnerable to being named as codefendants in law8 suits even though the likelihood of their being held

9 liable is remote in most cases, and they generally

10 have limited resources to defend themselves in such

11 lawsuits.

12 (9) Standards development organizations do not

13 stand to benefit from any antitrust violations that

14 might occur in the voluntary consensus standards

15 development process.

16 (10) As was the case with respect to research

17 and production joint ventures before the passage of

18 the National Cooperative Research and Production

19 Act of 1993, if relief from the threat of liability

20 under the antitrust laws is not granted to voluntary

21 consensus standards bodies, both regarding the de22 velopment of new standards and efforts to keep ex23 isting standards current, such bodies could be forced

24 to cut back on standards development activities at


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•HR 1086 IH

1 great financial cost both to the Government and to

2 the national economy.

3 SEC. 3. DEFINITIONS.

4 Section 2 of the National Cooperative Research and

5 Production Act of 1993 (15 U.S.C. 4301) is amended—

6 (1) in subsection (a) by adding at the end the

7 following:

8 ‘‘(7) The term ‘standards development activity’

9 means any action taken by a standards development

10 organization for the purpose of developing, promul11 gating, revising, amending, reissuing, interpreting,

12 or otherwise maintaining a voluntary consensus

13 standard, or using such standard in conformity as14 sessment activities, including actions relating to the

15 intellectual property policies of the standards devel16 opment organization.

17 ‘‘(8) The term ‘standards development organi18 zation’ means a domestic or international organiza19 tion that plans, develops, establishes, or coordinates

20 voluntary consensus standards using procedures that

21 incorporate the attributes of openness, balance of in22 terests, due process, an appeals process, and con23 sensus in a manner consistent with the Office of

24 Management and Budget Circular Number A–119,

25 as revised February 10, 1998.


I1086.AAG
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•HR 1086 IH

1 ‘‘(9) The term ‘technical standard’ has the

2 meaning given such term in section 12(d)(4) of the

3 National Technology Transfer and Advancement Act

4 of 1995.

5 ‘‘(10) The term ‘voluntary consensus standard’

6 has the meaning given such term in Office of Man7 agement and Budget Circular Number A–119, as re8 vised February 10, 1998.’’; and

9 (2) by adding at the end the following:

10 ‘‘(c) The term ‘standards development activity’ ex11 cludes the following activities:

12 ‘‘(1) Exchanging information among competi13 tors relating to cost, sales, profitability, prices, mar14 keting, or distribution of any product, process, or

15 service that is not reasonably required for the pur16 pose of developing or promulgating a voluntary con17 sensus standard, or using such standard in con18 formity assessment activities.

19 ‘‘(2) Entering into any agreement or engaging

20 in any other conduct that would allocate a market

21 with a competitor.

22 ‘‘(3) Entering into any agreement or conspiracy

23 that would set or restrain prices of any good or serv24 ice.’’.


I1086.AAH
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•HR 1086 IH

1 SEC. 4. RULE OF REASON STANDARD.

2 Section 3 of the National Cooperative Research and

3 Production Act of 1993 (15 U.S.C. 4302) is amended by

4 striking ‘‘of any person in making or performing a con5 tract to carry out a joint venture shall’’ and inserting the

6 following: ‘‘of—

7 ‘‘(1) any person in making or performing a con8 tract to carry out a joint venture, or

9 ‘‘(2) a standards development organization

10 while engaged in a standards development activity,

11 shall’’.

12 SEC. 5. LIMITATION ON RECOVERY.

13 Section 4 of the National Cooperative Research and

14 Production Act of 1993 (15 U.S.C. 4303) is amended—

15 (1) in subsections (a)(1), (b)(1), and (c)(1) by

16 inserting ‘‘, for a standards development activity en17 gaged in by a standards development organization

18 against which such claim is made’’ after ‘‘joint ven19 ture’’, and

20 (2) in subsection (e)—

21 (A) by inserting ‘‘, or of a standards devel22 opment activity engaged in by a standards de23 velopment organization’’ before the period at

24 the end, and

25 (B) by redesignating such subsection as

26 subsection (f), and


I1086.AAI
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9

•HR 1086 IH

1 (3) by inserting after subsection (d) the fol2 lowing:

3 ‘‘(e) Subsections (a), (b), and (c) shall not be con4 strued to modify the liability under the antitrust laws of

5 any person (other than a standards development organiza6 tion) who—

7 ‘‘(1) directly (or through an employee or agent)

8 participates in a standards development activity with

9 respect to which a violation of any of the antitrust

10 laws is found,

11 ‘‘(2) is not a fulltime employee of the standards

12 development organization that engaged in such ac13 tivity, and

14 ‘‘(3) is, or is an employee or agent of a person

15 who is, engaged in a line of commerce that is likely

16 to benefit directly from the operation of the stand17 ards development activity with respect to which such

18 violation is found.’’.

19 SEC. 6. ATTORNEY FEES.

20 Section 5 of the National Cooperative Research and

21 Production Act of 1993 (15 U.S.C. 4304) is amended—

22 (1) in subsection (a) by inserting ‘‘, or of a

23 standards development activity engaged in by a

24 standards development organization’’ after ‘‘joint

25 venture’’, and


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•HR 1086 IH

1 (2) by adding at the end the following:

2 ‘‘(c) Subsections (a) and (b) shall not apply with re3 spect to any person who—

4 ‘‘(1) directly participates in a standards devel5 opment activity with respect to which a violation of

6 any of the antitrust laws is found,

7 ‘‘(2) is not a fulltime employee of a standards

8 development organization that engaged in such ac9 tivity, and

10 ‘‘(3) is, or is an employee or agent of a person

11 who is, engaged in a line of commerce that is likely

12 to benefit directly from the operation of the stand13 ards development activity with respect to which such

14 violation is found.’’.

15 SEC. 7. DISCLOSURE OF STANDARDS DEVELOPMENT AC16 TIVITY.

17 Section 6 of the National Cooperative Research and

18 Production Act of 1993 (15 U.S.C. 4305) is amended—

19 (1) in subsection (a)—

20 (A) by redesignating paragraphs (1), (2),

21 and (3) as subparagraphs (A), (B), and (C), re22 spectively,

23 (B) by inserting ‘‘(1)’’ after ‘‘(a)’’, and

24 (C) by adding at the end the following:


I1086.AAK
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•HR 1086 IH

1 ‘‘(2) A standards development organization may, not

2 later than 90 days after commencing a standards develop3 ment activity engaged in for the purpose of developing or

4 promulgating a voluntary consensus standards or not later

5 than 90 days after the date of the enactment of the Stand6 ards Development Organization Advancement Act of

7 2003, whichever is later, file simultaneously with the At8 torney General and the Commission, a written notification

9 disclosing—

10 ‘‘(A) the name and principal place of business

11 of the standards development organization, and

12 ‘‘(B) documents showing the nature and scope

13 of such activity.

14 Any standards development organization may file addi15 tional disclosure notifications pursuant to this section as

16 are appropriate to extend the protections of section 4 to

17 standards development activities that are not covered by

18 the initial filing or that have changed significantly since

19 the initial filing.’’,

20 (2) in subsection (b)—

21 (A) in the 1st sentence by inserting ‘‘, or

22 a notice with respect to such standards develop23 ment activity that identifies the standards de24 velopment organization engaged in such activity


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•HR 1086 IH

1 and that describes such activity in general

2 terms’’ before the period at the end, and

3 (B) in the last sentence by inserting ‘‘or

4 available to such organization, as the case may

5 be’’ before the period,

6 (3) in subsection (d)(2) by inserting ‘‘, or the

7 standards development activity,’’ after ‘‘venture’’,

8 (4) in subsection (e)—

9 (A) by striking ‘‘person who’’ and inserting

10 ‘‘person or standards development organization

11 that’’, and

12 (B) by inserting ‘‘or any standards devel13 opment organization’’ after ‘‘person’’ the last

14 place it appears, and

15 (5) in subsection (g)(1) by inserting ‘‘or stand16 ards development organization’’ after ‘‘person’’.

17 SEC. 8. RULE OF CONSTRUCTION.

18 Nothing in this Act shall be construed to alter or

19 modify the antitrust treatment under existing law of—

20 (1) parties participating in standards develop21 ment activity of standards development organiza22 tions within the scope of this Act, or


I1086.AAM
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•HR 1086 IH

1 (2) other organizations and parties engaged in

2 standard-setting processes not within the scope of

3 this amendment to the Act.

Æ


I1086.AAN
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Chairman SENSENBRENNER. The Chair recognizes himself for 

purposes of an explanation. This bill fosters the critical role of 

standards development while strongly reaffirming the central role 

of our Nation’s antitrust statutes and preserving and promoting 

free market competition. Standards development organizations play 

a pivotal role in promoting this competition. Seven years ago, the 

Congress passed legislation requiring the use of voluntary consensus standards in Federal procurement and regulatory activities. 

While this legislation has encouraged Government use of private 

development standards, it also has increased the vulnerability of 

private standard developers of the antitrust litigation. 

This bill addresses this problem, and it simply limits recovery 

against standard developments organizations, the actual economic 

damages, while codifying the rule of reason for antitrust scrutiny 

of their activities. 

I am pleased that the legislation has attracted the cosponsorship 

of the Ranking Member, Mr. Conyers, as well as 12 Members of the 

Committee. 

I yield the balance of my time now to Mr. Forbes, who chaired 

the Antitrust Task Force hearing on this legislation for any comments he wishes to make. 

Mr. FORBES. Thank you, Mr. Chairman, and I am pleased also 

to lend my support to H.R. 1086, the ‘‘National Cooperative Standards Development Act of 2003.’’ Standards developing organizations 

play critical but sometimes overlooked roles in promoting marketbased competition. Without technical product standards, there 

would be no compatibility or substitutability among competing consumer products and public health and safety would be severely 

compromised. 

Until recently, standards were often developed by the Federal 

Government; however, the rapid pace of technological innovation 

makes nongovernment standard setting activity more efficient and 

more effective. It is important to stress that this legislation does 

not create an antitrust exemption for standards developers. 

The bill is a narrowly tailored commonsense approach to promoting activity that enhances product choice and consumer welfare. 

Mr. Chairman, I commend you for your leadership on this issue, 

and I urge my colleagues to support this bipartisan legislation. 

I yield back the balance of my time. 

Chairman SENSENBRENNER. The Chair yields back the balance of 

his time. 

Without objection, all Members may include opening statements 

in the record at this point. 

The gentleman from Virginia has an opening statement? 

Mr. SCOTT. Mr. Chairman, apparently I didn’t get the word about 

attendance. I had a question, Mr. Chairman. If someone would respond, it seems to me that if you have got a group setting standards, that there would be much less likelihood for antitrust behavior than if they didn’t form standards that everybody could comply 

with. I guess my question is: How, if this group is actually doing 

its job, how would there be any liability? 

Chairman SENSENBRENNER. Well, people who don’t like the 

standards that the group comes up with, I guess, would possibly 

have a cause of action, and what this bill does is simply limit the 

30

plaintiffs to the actual economic damages that they could prove, 

rather than all of the punitive measures for antitrust violations. 

Mr. SCOTT. Reclaiming my time. That is, if they can prove anything? 

Chairman SENSENBRENNER. Yes. 

Are there amendments? Are there amendments? If there are no 

amendments, without objection, the previous question is ordered. A 

reporting quorum not being present, we will vote on reporting this 

bill when a reporting quorum appears. 

[Intervening business.] 

Because we now have a reporting quorum present, the Chair will 

put the questions on the bills that have been marked up previously 

on which the previous question has been ordered relative to a motion to report. 

The first motion is on reporting favorably H.R. 1086, the ‘‘Standards Development Organization Advancement Act of 2003.’’ The 

Chair notes the presence of a reporting quorum. The question occurs on the motion to report the bill favorably. 

Those in favor will say aye. 

Opposed, no. 

The ayes appear to have it. The ayes have it. The motion to report favorably is adopted. 

Without objection, the Chairman is authorized to move to go to 

conference pursuant to House rules. Without objection, the staff is 

directed to make any technical and conforming changes, and all 

Members will be given 2 days, as provided by the rules, in which 

to submit additional dissenting, supplemental or minority views.

Æ