Presidential Approval Shelters Standards-Developing Organizations

Published: Thursday, July 8, 2004 - 21:00

President George W. Bush recently signed into law the Standards Developing Organizations Advancement Act of 2004 (H.R. 1086), providing new shelter for standards developers from treble damage liability in current antitrust laws.

The approval amends the National Cooperative Research and Production Act of 1993, which addressed the antitrust treatment of certain joint ventures, such as standards development organizations. The new bill recognizes the assistance that SDOs provide to government agencies in developing standards for regulatory and procurement functions and allows SDOs the opportunity to submit a notice describing the scope of their work with the Justice Department and the Federal Trade Commission. That filing may avoid unnecessary and costly litigation against organizations that have no commercial interest with regard to the technical specifications contained in the standards. The act provides that the federal antitrust “rule of reason” apply to SDOs while they are developing standards, and limits attorney’s fees in any antitrust case challenging an SDO’s work.

“Standards development organizations develop technical standards that are essential to the efficient functioning of our national economy,” explains R. Hewitt Pate, assistant attorney general in charge of the antitrust division. “Congress has determined that the threat of treble damages pressures SDOs to restrict their standards development activities at a great cost to the United States. (This act) relieves SDOs from certain antitrust concerns and facilitates the development of pro-competitive standards.”

The American Society of Mechanical Engineers, ASTM International and the National Fire Protection Association spearheaded the effort, which was applauded by the American National Standards Institute.

“ANSI congratulates the work of many in the standards community that has culminated in the passage of HR 1086,” says David Karmol, ANSI vice president of public policy and government affairs. “The Institute will continue to support the needs of standards developers and edify our constituency on the intent of the legislation.”

For more information, visit www.ansi.org.

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