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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1313 Reported in House (RH)]

                                                  Union Calendar No. 49

103d CONGRESS

  1st Session

                               H. R. 1313

                          [Report No. 103-94]

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                              May 18, 1993

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed

                                                  Union Calendar No. 49
103d CONGRESS
  1st Session
                                H. R. 1313

                          [Report No. 103-94]

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

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 11, 1993

 Mr. Brooks (for himself, Mr. Fish, Mr. Edwards of California, and Mr. 
   Boucher) introduced the following bill; which was referred to the 
                       Committee on the Judiciary

                              May 18, 1993

 Additional sponsors: Mr. Moorhead, Mr. Mazzoli, Mr. Berman, Mr. Mann, 
  Mr. Scott, Mr. Glickman, Mr. Frank of Massachusetts, Mr. Reed, Mr. 
                     Nadler, and Mr. Sensenbrenner

                              May 18, 1993

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                               11, 1993]

_______________________________________________________________________

                                 A BILL

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

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Cooperative Production 
Amendments 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-damage limitation 
on civil antitrust liability.

SEC. 3. AMENDMENTS.

    (a) Short Title.--Section 1 of the National Cooperative Research 
Act of 1984 (15 U.S.C. 4301 note) is amended by striking ``National 
Cooperative Research Act of 1984'' and inserting ``National Cooperative 
Research and Production Act of 1993''.
    (b) Definition.--Section 2(a)(6) of the National Cooperative 
Research Act of 1984 (15 U.S.C. 4301(a)(6)) is amended--
            (1) in the matter preceding subparagraph (A) by striking 
        ``research and development'';
            (2) in subparagraph (D) by inserting ``or production'' 
        after ``research'';
            (3) in subparagraph (E) by striking ``and (D)'' and 
        inserting ``(D), (E), and (F)'';
            (4) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (F) and (G), respectively;
            (5) by inserting after subparagraph (C) the following:
                    ``(D) the production of a product, process, or 
                service,
                    ``(E) the testing in connection with the production 
                of a product, process, or service by such venture,''; 
                and
            (6) by striking ``research'' the last place it appears and 
        inserting ``such venture''.
    (c) Exclusions.--Section 2(b) of the National Cooperative Research 
Act of 1984 (15 U.S.C. 4301(b)) is amended--
            (1) in the matter preceding paragraph (1) by striking 
        ``research and development'';
            (2) in paragraph (1) by striking ``that is not reasonably 
        required to conduct the research and development that is'' and 
        inserting ``if such information is not reasonably required to 
        carry out'';
            (3) by amending paragraph (2) to read as follows:
            ``(2) entering into any agreement or engaging in any other 
        conduct restricting, requiring, or otherwise involving the 
        marketing, distribution, or provision by any person who is a 
        party to such venture of any product, process, or service, 
        other than--
                    ``(A) the distribution among the parties to such 
                venture, in accordance with such venture, of a product, 
                process, or service produced by such 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,
            ``(7) using existing facilities in connection with the 
        production of a product, process, or service by such venture 
        unless such use is for the production of a new product or 
        technology, and
            ``(8) except as provided in paragraphs (2), (3), and (6), 
        entering into any agreement or engaging in any other conduct to 
        restrict or require participation by any person who is a party 
        to 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; and
                    (B) in subsection (b) by inserting ``of this 
                section'' after ``subsection (d)''; 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) in paragraph (1) by striking ``and'' at the 
                end,
                    (B) in paragraph (2) by striking the period at the 
                end and inserting ``, and'', and
                    (C) 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:

   ``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 after 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 after the date of the enactment of 
this Act, the Attorney General, after consultation with such other 
agencies as may be appropriate, shall submit to the Committee on the 
Judiciary of the House of Representatives and the Committee on the 
Judiciary of the Senate--
            (1) a description of the technological areas of research, 
        development, and production most commonly pursued by joint 
        ventures for which notice was filed under section 6(a) of the 
        National Cooperative Research and Production Act of 1993 during 
        the 3-year period for which such report is made, and an 
        analysis of the trends in the competitiveness of United States 
        industry in such areas; and
            (2) an update of the report submitted by the Attorney 
        General under subsection (d) to reflect changes in foreign 
        law's antitrust treatment of joint ventures.
    (d) Review of Antitrust Treatment Under Foreign Laws.--Not later 
than 1 year after the date of enactment of this Act, the Attorney 
General, after consultation with such other agencies as may be 
appropriate, shall submit to the Committee on the Judiciary of the 
House of Representatives and the Committee on the Judiciary of the 
Senate a report on the antitrust treatment of United States businesses 
that are parties to joint ventures under the law of each foreign nation 
whose domestic businesses filed notice under section 6(a) of the 
National Cooperative Research and Production Act of 1993 at any time.
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