FTC Notice on Implementation of the Standards Development Organization Advancement Act of 2004

On June 22, 2004, President Bush signed into law H.R. 1086, which includes the Standards Development Organization Advancement Act of 2004 (the Act). This Act amends provisions of the National Cooperative Research and Production Act of 1993, which affords certain antitrust protections to joint ventures engaged in research, development, and production, to extend the same antitrust protections to standards development organizations (SDOs) while those organizations are engaged in standards development activity. The Act states that the term SDO does not include parties participating in the SDO.

The Act provides that the antitrust rule of reason applies to SDOs while they are engaged in standards development activities, and provides special rules for attorneys' fees in any antitrust case challenging a SDOs standards development activity. The rule of reason and attorneys' fees provisions of the Act automatically apply to all SDOs covered by the Act.

The Act also provides SDOs with the opportunity to limit their antitrust liability for standards development activities to actual, as opposed to treble, damages. SDOs must file a proper notification with the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to obtain the liability limiting protections provided by the Act. Proper notifications should:

• Be filed not later than 90 days after the date of the enactment of the Act, or 90 days after commencing a standards development activity engaged in for the purpose of developing or promulgating voluntary consensus standards;
• Disclose the name of the SDO and its principal place of business;
• Provide documents showing the nature and scope of the standards development activity;
• Contain one copy of all documents submitted to the FTC and two copies of all documents submitted to the DOJ; and
• Be delivered to the FTC and DOJ at the following addresses
  

  Federal Trade Commission
  Bureau of Competition
  Office of Policy and Coordination
  600 Pennsylvania Ave., NW, Room 394
  Washington, DC 20580

  Department of Justice
  Antitrust Division
  Office of Operations
  Patrick Henry Building
  601 D St., NW Room 10-013
  Washington, DC 20530
  FEDEX ZipCode: 20004

  
  

Any SDO may file additional notifications as are appropriate to extend the protections to standards development activities that are not covered by the initial filing or that have changed significantly since the initial filing.

Promptly after receiving a proper notification, the FTC or the DOJ will publish a notice in the Federal Register that identifies the SDO and describes its standards development activities in general terms. The FTC or the DOJ will make the notice available to the filing SDO before publishing it in the Federal Register. Notifications may be withdrawn before publication in the Federal Register; however, no SDO will receive the liability limiting protections of the Act if its notification is withdrawn before publication.

To facilitate publication in the Federal Register, SDOs may provide the FTC and the DOJ with a draft notice. In addition, SDOs should provide the name and contact information of the person or persons authorized to approve the proposed notice.

The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov. Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws, which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.