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 Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
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 Com-
mittee 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 pur-
pose of producing a product, process, or service.
Be it enacted by the Senate and House of Representa-
tives 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 abil-
ity 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 inno-
vation arrangements, and so clarification serves a
useful purpose in helping to promote such arrange-
ments.
(b) PURPOSE.—It is the purpose of this Act to promote
innovation, facilitate trade, and strengthen the competitive-
ness of the United States in world markets by clarifying
the applicability of the rule of reason standard and estab-
lishing 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 Coopera-
tive 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 Produc-
tion Act of 1993’’.
(b) DEFINITION.—Section 2(a)(6) of the National Co-
operative 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 pro-
duction’’ 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 pro-
duction of a product, process, or service by such
venture,’’; and
(6) by striking ‘‘research’’ the last place it ap-
pears and inserting ‘‘such venture’’.
(c) EXCLUSIONS.—Section 2(b) of the National Coop-
erative Research Act of 1984 (15 U.S.C. 4301(b)) is amend-
ed—
(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 devel-
opment 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 informa-
tion, such as patents and trade secrets, developed
through such venture formed under a written
agreement entered into before the date of the en-
actment of the National Cooperative Production
Amendments of 1993, or
‘‘(C) the licensing, conveying, or transfer-
ring 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 Na-
tional Cooperative Production Amendments of
1993,’’;
(4) in paragraph (3)—
(A) in subparagraph (A) by striking ‘‘or de-
velopments 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 com-
petitor,
‘‘(5) exchanging information among competitors
relating to production (other than production by such
venture) of a product, process, or service if such infor-
mation 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 re-
quired 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, rel-
evant 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 para-
graph (1) by striking ‘‘research and development’’.
(f) DISCLOSURE.—Section 6 of the National Coopera-
tive 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 para-
graph (2):
‘‘(3) if a purpose of such venture is the produc-
tion 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 protec-
tions of section 4 shall not apply with respect to a joint
venture’s production of a product, process, or service, as re-
ferred 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 favor-
able 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 Pro-
duction 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-