Calendar No. 74

103D CONGRESS

1ST SESSION H. R. 1313

AN ACT

To amend the National Cooperative Research Act

process, or service.into for the purpose of producing a product,of 1984 with respect to joint ventures entered

MAY 25 (legislative day, APRIL 19), 1993

Committee on the Judiciary discharged; ordered placed

on the calendar
II

Calendar No. 74

103D CONGRESS

1ST SESSION H. R. 1313

IN THE SENATE OF THE UNITED STATES

MAY 19 (legislative day, APRIL 19), 1993

Received; read twice and referred to the Committee on the Judiciary

MAY 25 (legislative day, APRIL 19), 1993

Committee on the Judiciary discharged; ordered placed on the calendar

AN ACT

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.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Cooperative Pro5 duction Amendments of 1993’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—The Congress finds that—

8 (1) technological innovation and its profitable

9 commercialization are critical components of the
2

•HR 1313 PCS

1 ability of the United States to raise the living stand2 ards of Americans and to compete in world markets;

3 (2) cooperative arrangements among

4 nonaffiliated businesses in the private sector are

5 often essential for successful technological innova6 tion; and

7 (3) the antitrust laws may have been mistak8 enly perceived to inhibit procompetitive cooperative

9 innovation arrangements, and so clarification serves

10 a useful purpose in helping to promote such ar11 rangements.

12 (b) PURPOSE.—It is the purpose of this Act to pro13 mote innovation, facilitate trade, and strengthen the com14 petitiveness of the United States in world markets by

15 clarifying the applicability of the rule of reason standard

16 and establishing a procedure under which businesses may

17 notify the Department of Justice and Federal Trade Com18 mission of their cooperative ventures and thereby qualify

19 for a single-damages limitation on civil antitrust liability.

20 SEC. 3. AMENDMENTS.

21 (a) SHORT TITLE.—Section 1 of the National Coop22 erative Research Act of 1984 (15 U.S.C. 4301 note) is

23 amended by striking ‘‘National Cooperative Research Act

24 of 1984’’ and inserting ‘‘National Cooperative Research

25 and Production Act of 1993’’.
3

•HR 1313 PCS

1 (b) DEFINITION.—Section 2(a)(6) of the National

2 Cooperative Research Act of 1984 (15 U.S.C. 4301(a)(6))

3 is amended—

4 (1) in the matter preceding subparagraph (A)

5 by striking ‘‘research and development’’;

6 (2) in subparagraph (D) by inserting ‘‘or pro7 duction’’ after ‘‘research’’;

8 (3) in subparagraph (E) by striking ‘‘and (D)’’

9 and inserting ‘‘(D), (E), and (F)’’;

10 (4) by redesignating subparagraphs (D) and

11 (E) as subparagraphs (F) and (G), respectively;

12 (5) by inserting after subparagraph (C) the

13 following:

14 ‘‘(D) the production of a product, process,

15 or service,

16 ‘‘(E) the testing in connection with the

17 production of a product, process, or service by

18 such venture,’’; and

19 (6) by striking ‘‘research’’ the last place it ap20 pears and inserting ‘‘such venture’’.

21 (c) EXCLUSIONS.—Section 2(b) of the National Co22 operative Research Act of 1984 (15 U.S.C. 4301(b)) is

23 amended—

24 (1) in the matter preceding paragraph (1) by

25 striking ‘‘research and development’’;
4

•HR 1313 PCS

1 (2) in paragraph (1) by striking ‘‘that is not

2 reasonably required to conduct the research and de3 velopment that is’’ and inserting ‘‘if such informa4 tion is not reasonably required to carry out’’;

5 (3) by amending paragraph (2) to read as

6 follows:

7 ‘‘(2) entering into any agreement or engaging

8 in any other conduct restricting, requiring, or other9 wise involving the marketing, distribution, or provi10 sion by any person who is a party to such venture

11 of any product, process, or service, other than—

12 ‘‘(A) the distribution among the parties to

13 such venture, in accordance with such venture,

14 of a product, process, or service produced by

15 such venture,

16 ‘‘(B) the marketing of proprietary informa17 tion, such as patents and trade secrets, devel18 oped through such venture formed under a

19 written agreement entered into before the date

20 of the enactment of the National Cooperative

21 Production Amendments of 1993, or

22 ‘‘(C) the licensing, conveying, or transfer23 ring of intellectual property, such as patents

24 and trade secrets, developed through such ven25 ture formed under a written agreement entered
5

•HR 1313 PCS

1 into on or after the date of the enactment of

2 the National Cooperative Production Amend3 ments of 1993,’’;

4 (4) in paragraph (3)—

5 (A) in subparagraph (A) by striking ‘‘or

6 developments not developed through’’ and in7 serting ‘‘, developments, products, processes, or

8 services not developed through, or produced

9 by,’’;

10 (B) in subparagraph (B) by striking ‘‘such

11 party’’ and inserting ‘‘any person who is a

12 party to such venture’’; and

13 (C) by striking the period at the end and

14 inserting a comma; and

15 (5) by adding at the end the following:

16 ‘‘(4) entering into any agreement or engaging

17 in any other conduct allocating a market with a

18 competitor,

19 ‘‘(5) exchanging information among competitors

20 relating to production (other than production by

21 such venture) of a product, process, or service if

22 such information is not reasonably required to carry

23 out the purpose of such venture,

24 ‘‘(6) entering into any agreement or engaging

25 in any other conduct restricting, requiring, or other-
6

•HR 1313 PCS

1 wise involving the production (other than the pro2 duction by such venture) of a product, process, or

3 service,

4 ‘‘(7) using existing facilities for the production

5 of a product, process, or service by such venture un6 less such use involves the production of a new prod7 uct or technology, and

8 ‘‘(8) except as provided in paragraphs (2), (3),

9 and (6), entering into any agreement or engaging in

10 any other conduct to restrict or require participation

11 by any person who is a party to such venture, in any

12 unilateral or joint activity that is not reasonably re13 quired to carry out the purpose of such venture.’’.

14 (d) RULE OF REASON STANDARD.—Section 3 of the

15 National Cooperative Research Act of 1984 (15 U.S.C.

16 4302) is amended—

17 (1) by striking ‘‘research and development’’ the

18 first place it appears;

19 (2) by striking ‘‘and development’’ the last

20 place it appears and inserting ‘‘, development, prod21 uct, process, and service’’; and

22 (3) by adding at the end the following:

23 ‘‘For the purpose of determining a properly defined, rel24 evant market, worldwide capacity shall be considered to
7

•HR 1313 PCS

1 the extent that it may be appropriate in the cir2 cumstances.’’.

3 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

4 The National Cooperative Research Act of 1984 (15

5 U.S.C. 4301 et seq.) is amended—

6 (1) in section 4—

7 (A) in subsections (a)(1), (b)(1), (c)(1),

8 and (e) by striking ‘‘research and development’’

9 each place it appears;

10 (B) in subsections (a), (b), and (c) by in11 serting ‘‘of this section’’ after ‘‘subsection (d)’’

12 each place it appears; and

13 (C) in subsection (e) by striking ‘‘the effec14 tive date of this Act’’ and inserting ‘‘October

15 11, 1984,’’; and

16 (2) in section 5(a) in the matter preceding

17 paragraph (1) by striking ‘‘research and develop18 ment’’.

19 (f) DISCLOSURE.—Section 6 of the National Cooper20 ative Research Act of 1984 (15 U.S.C. 4305) is amend21 ed—

22 (1) in the heading by striking ‘‘RESEARCH AND

23 DEVELOPMENT’’;

24 (2) in subsection (a)—
8

•HR 1313 PCS

1 (A) by striking ‘‘the date of the enactment

2 of this Act’’ and inserting ‘‘October 11, 1984’’;

3 (B) in paragraph (1) by striking ‘‘and’’ at

4 the end;

5 (C) in paragraph (2) by striking the period

6 at the end and inserting ‘‘, and’’; and

7 (D) by inserting the following after para8 graph (2):

9 ‘‘(3) if a purpose of such venture is the produc10 tion of a product, process, or service, as referred to

11 in section 2(a)(6)(D), the identity and nationality of

12 any person who is a party to such venture, or who

13 controls any party to such venture whether sepa14 rately or with one or more other persons acting as

15 a group for the purpose of controlling such party.’’;

16 and

17 (3) in subsections (a), (d)(2), and (e) by strik18 ing ‘‘research and development’’ each place it ap19 pears.

20 (g) LIMITATION.—The National Cooperative Re21 search Act of 1984 (15 U.S.C. 4301 et seq.) is amended

22 by adding at the end the following:

23 ‘‘APPLICATION OF SECTION 4 PROTECTIONS TO

24 PRODUCTION OF PRODUCTS, PROCESSES, AND SERVICES

25 ‘‘SEC. 7. Notwithstanding sections 4 and 6, the pro26 tections of section 4 shall not apply with respect to a joint
9

•HR 1313 PCS

1 venture’s production of a product, process, or service, as

2 referred to in section 2(a)(6)(D), unless—

3 ‘‘(1) the principal facilities for such production

4 are located in the United States or its territories,

5 and

6 ‘‘(2) each person who controls any party to

7 such venture (including such party itself) is a United

8 States person, or a foreign person from a country

9 whose law accords antitrust treatment no less favor10 able to United States persons than to such country’s

11 domestic persons with respect to participation in

12 joint ventures for production.’’.

13 SEC. 4. REPORTS ON JOINT VENTURES AND UNITED

14 STATES COMPETITIVENESS.

15 (a) PURPOSE.—The purpose of the reports required

16 by this section is to inform Congress and the American

17 people of the effect of the National Cooperative Research

18 and Production Act of 1993 on the competitiveness of the

19 United States in key technological areas of research, devel20 opment, and production.

21 (b) ANNUAL REPORT BY THE ATTORNEY GEN22 ERAL.—In the 30-day period beginning at each 1-year in23 terval in the 6-year period beginning on the date of the

24 enactment of this Act, the Attorney General shall submit

25 to the Committee on the Judiciary of the House of Rep-
10

•HR 1313 PCS

1 resentatives and the Committee on the Judiciary of the

2 Senate—

3 (1) a list of joint ventures for which notice was

4 filed under section 6(a) of the National Cooperative

5 Research and Production Act of 1993 during the 12-

6 month period for which such report is made, includ7 ing—

8 (A) the purpose of each joint venture;

9 (B) the identity of each party described in

10 section 6(a)(1) of such Act; and

11 (C) the identity and nationality of each

12 person described in section 6(a)(3) of such Act;

13 and

14 (2) a list of cases and proceedings, if any,

15 brought during such period under the antitrust laws

16 by the Department of Justice, and by the Federal

17 Trade Commission, with respect to joint ventures for

18 which notice was filed under such section at any

19 time.

20 (c) TRIENNIAL REPORT BY THE ATTORNEY GEN21 ERAL.—In the 30-day period beginning at each 3-year in22 terval in the 6-year period beginning on the date of the

23 enactment of this Act, the Attorney General, after con24 sultation with such other agencies as the Attorney General

25 considers to be appropriate, shall submit to the Committee
11

•HR 1313 PCS

1 on the Judiciary of the House of Representatives and the

2 Committee on the Judiciary of the Senate a description

3 of the technological areas most commonly pursued by joint

4 ventures for production for which notice was filed under

5 section 6(a) of the National Cooperative Research and

6 Production Act of 1993 during the 3-year period for which

7 such report is made, and an analysis of the trends in the

8 competitiveness of United States industry in such areas.

9 (d) REVIEW OF ANTITRUST TREATMENT UNDER

10 FOREIGN LAWS.—In the three 30-day periods beginning

11 1 year, 3 years, and 6 years after the date of the enact12 ment of this Act, the Attorney General, after consultation

13 with such other agencies as the Attorney General consid14 ers to be appropriate, shall submit to the Committee on

15 the Judiciary of the House of Representatives and the

16 Committee on the Judiciary of the Senate a report on the

17 antitrust treatment of United States businesses with re18 spect to participation in joint ventures for production,

19 under the law of each foreign nation any of whose domes20 tic businesses disclosed its nationality under section

21 6(a)(3) of the National Cooperative Research and Produc22 tion Act of 1993 at any time.

Passed the House of Representatives May 18, 1993.

Attest: DONNALD K. ANDERSON,

Clerk.