H. R. 1313

One Hundred Third Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the fifth day of January, one thousand nine hundred and ninety-three

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘National Cooperative Production

Amendments of 1993’’.

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS.—The Congress finds that—

(1) technological innovation and its profitable commercialization are critical components of the ability of the United

States to raise the living standards of Americans and to compete

in world markets;

(2) cooperative arrangements among nonaffiliated

businesses in the private sector are often essential for successful

technological innovation; and

(3) the antitrust laws may have been mistakenly perceived

to inhibit procompetitive cooperative innovation arrangements,

and so clarification serves a useful purpose in helping to promote such arrangements.

(b) PURPOSE.—It is the purpose of this Act to promote innovation, facilitate trade, and strengthen the competitiveness of the

United States in world markets by clarifying the applicability of

the rule of reason standard and establishing a procedure under

which businesses may notify the Department of Justice and Federal

Trade Commission of their cooperative ventures and thereby qualify

for a single-damages limitation on civil antitrust liability.

SEC. 3. AMENDMENTS.

(a) SHORT TITLE.—Section 1 of the National Cooperative

Research Act of 1984 (15 U.S.C. 4301 note) is amended by striking

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

‘‘National Cooperative Research and Production Act of 1993’’.

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

Research Act of 1984 (15 U.S.C. 4301(a)(6)) is amended—

(1) in the matter preceding subparagraph (A) by striking

‘‘research and development’’;

(2) in subparagraph (D) by inserting ‘‘or production’’ after

‘‘research’’;

(3) in subparagraph (E) by striking ‘‘and (D)’’ and inserting ‘‘(D), (E), and (F)’’;
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(4) by redesignating subparagraphs (D) and (E) as subparagraphs (F) and (G), respectively;

(5) by inserting after subparagraph (C) the following:

‘‘(D) the production of a product, process, or service,

‘‘(E) the testing in connection with the production of

a product, process, or service by such venture,’’; and

(6) by striking ‘‘research’’ the last place it appears and

inserting ‘‘such venture’’.

(c) EXCLUSIONS.—Section 2(b) of the National Cooperative

Research Act of 1984 (15 U.S.C. 4301(b)) is amended—

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

‘‘research and development’’;

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

required to conduct the research and development that is’’

and inserting ‘‘if such information is not reasonably required

to carry out’’;

(3) by amending paragraph (2) to read as follows:

‘‘(2) entering into any agreement or engaging in any other

conduct restricting, requiring, or otherwise involving the

marketing, distribution, or provision by any person who is

a party to such venture of any product, process, or service,

other than—

‘‘(A) the distribution among the parties to such venture,

in accordance with such venture, of a product, process,

or service produced by such venture,

‘‘(B) the marketing of proprietary information, such

as patents and trade secrets, developed through such venture formed under a written agreement entered into before

the date of the enactment of the National Cooperative

Production Amendments of 1993, or

‘‘(C) the licensing, conveying, or transferring of intellectual property, such as patents and trade secrets, developed

through such venture formed under a written agreement

entered into on or after the date of the enactment of the

National Cooperative Production Amendments of 1993,’’;

(4) in paragraph (3)—

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

not developed through’’ and inserting ‘‘, developments, products, processes, or services not developed through, or produced by,’’;

(B) in subparagraph (B) by striking ‘‘such party’’ and

inserting ‘‘any person who is a party to such venture’’;

and

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

a comma; and

(5) by adding at the end the following:

‘‘(4) entering into any agreement or engaging in any other

conduct allocating a market with a competitor,

‘‘(5) exchanging information among competitors relating

to production (other than production by such venture) of a

product, process, or service if such information is not reasonably

required to carry out the purpose of such venture,

‘‘(6) entering into any agreement or engaging in any other

conduct restricting, requiring, or otherwise involving the

production (other than the production by such venture) of a

product, process, or service,
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‘‘(7) using existing facilities for the production of a product,

process, or service by such venture unless such use involves

the production of a new product or technology, and

‘‘(8) except as provided in paragraphs (2), (3), and (6),

entering into any agreement or engaging in any other conduct

to restrict or require participation by any person who is a

party to such venture, in any unilateral or joint activity that

is not reasonably required to carry out the purpose of such

venture.’’.

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

Cooperative Research Act of 1984 (15 U.S.C. 4302) is amended—

(1) by striking ‘‘research and development’’ the first place

it appears;

(2) by striking ‘‘and development’’ the last place it appears

and inserting ‘‘, development, product, process, and service’’;

and

(3) by adding at the end the following:

‘‘For the purpose of determining a properly defined, relevant market,

worldwide capacity shall be considered to the extent that it may

be appropriate in the circumstances.’’.

(e) TECHNICAL AND CONFORMING AMENDMENTS.—The National

Cooperative Research Act of 1984 (15 U.S.C. 4301 et seq.) is

amended—

(1) in section 4—

(A) in subsections (a)(1), (b)(1), (c)(1), and (e) by striking ‘‘research and development’’ each place it appears;

(B) in subsections (a), (b), and (c) by inserting ‘‘of

this section’’ after ‘‘subsection (d)’’ each place it appears;

and

(C) in subsection (e) by striking ‘‘the effective date

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

(2) in section 5(a) in the matter preceding paragraph (1)

by striking ‘‘research and development’’.

(f) DISCLOSURE.—Section 6 of the National Cooperative

Research Act of 1984 (15 U.S.C. 4305) is amended—

(1) in the heading by striking ‘‘RESEARCH AND DEVELOPMENT’’;

(2) in subsection (a)—

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

Act’’ and inserting ‘‘October 11, 1984’’;

(B) in paragraph (1) by striking ‘‘and’’ at the end;

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

end and inserting ‘‘, and’’; and

(D) by inserting the following after paragraph (2):

‘‘(3) 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.’’; and

(3) in subsections (a), (d)(2), and (e) by striking ‘‘research

and development’’ each place it appears.

(g) LIMITATION.—The National Cooperative Research Act of

1984 (15 U.S.C. 4301 et seq.) is amended by adding at the end

the following:
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‘‘APPLICATION OF SECTION 4 PROTECTIONS TO PRODUCTION OF

PRODUCTS, PROCESSES, AND SERVICES

‘‘SEC. 7. Notwithstanding sections 4 and 6, the protections of section 4 shall not apply with respect to a joint venture’s production of a product, process, or service, as referred to in section

2(a)(6)(D), unless—

‘‘(1) the principal facilities for such production are located

in the United States or its territories, and

‘‘(2) each person who controls any party to such venture (including such party itself) is a United States person, or a

foreign person from a country whose law accords antitrust

treatment no less favorable to United States persons than

to such country’s domestic persons with respect to participation

in joint ventures for production.’’.

SEC. 4. REPORTS ON JOINT VENTURES AND UNITED STATES

COMPETITIVENESS.

(a) PURPOSE.—The purpose of the reports required by this section is to inform Congress and the American people of the

effect of the National Cooperative Research and Production Act

of 1993 on the competitiveness of the United States in key technological areas of research, development, and production. (b) ANNUAL REPORT BY THE ATTORNEY GENERAL.—In the 30-

day period beginning at each 1-year interval in the 6-year period

beginning on the date of the enactment of this Act, the Attorney

General shall submit to the Committee on the Judiciary of the

House of Representatives and the Committee on the Judiciary of

the Senate—

(1) a list of joint ventures for which notice was filed under section 6(a) of the National Cooperative Research and Production Act of 1993 during the 12-month period for which such

report is made, including— (A) the purpose of each joint venture;

(B) the identity of each party described in section 6(a)(1) of such Act; and

(C) the identity and nationality of each person described in section 6(a)(3) of such Act; and

(2) a list of cases and proceedings, if any, brought during such period under the antitrust laws by the Department of

Justice, and by the Federal Trade Commission, with respect

to joint ventures for which notice was filed under such section

at any time.

(c) TRIENNIAL REPORT BY THE ATTORNEY GENERAL.—In the

30-day period beginning at each 3-year interval in the 6-year period

beginning on the date of the enactment of this Act, the Attorney

General, after consultation with such other agencies as the Attorney

General considers to be appropriate, shall submit to the Committee

on the Judiciary of the House of Representatives and the Committee

on the Judiciary of the Senate a description of the technological

areas most commonly pursued by joint ventures for production

for which notice was filed under section 6(a) of the National

Cooperative Research and Production Act of 1993 during the 3-

year period for which such report is made, and an analysis of

the trends in the competitiveness of United States industry in

such areas.

(d) REVIEW OF ANTITRUST TREATMENT UNDER FOREIGN LAWS.— In the three 30-day periods beginning 1 year, 3 years, and 6 years
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after the date of the enactment of this Act, the Attorney General,

after consultation with such other agencies as the Attorney General

considers to be appropriate, shall submit to the Committee on

the Judiciary of the House of Representatives and the Committee

on the Judiciary of the Senate a report on the antitrust treatment

of United States businesses with respect to participation in joint

ventures for production, under the law of each foreign nation any

of whose domestic businesses disclosed its nationality under section

6(a)(3) of the National Cooperative Research and Production Act

of 1993 at any time.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.