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:

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 Notifications may be withdrawn before publication in the Federal Register; however, no SDO will receive the liability limiting protections of the Act if its notification is withdrawn before publication.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.