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President Bush Signs Standards Developing Organizations Advancement Act of 2004 into Law


New York, Jun 25, 2004

The Standards Developing Organizations Advancement Act of 2004 (H.R. 1086) was signed into law by President George W. Bush on June 22, providing a degree of shelter for certain standards developers from the treble damages liability in current antitrust laws.

H.R. 1086 amends the National Cooperative Research and Production Act of 1993 which addresses the antitrust treatment of certain joint ventures (such as standards development). The new bill recognizes the assistance that standards developing organizations (SDOs) provide to government agencies in developing standards for regulatory and procurement functions. SDOs will now benefit from an explicit filing opportunity to submit a notice describing the scope of their activity with the Justice Department and the Federal Trade Commission, which may avert unnecessary and costly litigation against these organizations that have no commercial interest with regard to the technical specifications contained in the standards.

"Standards development organizations develop technical standards that are essential to the efficient functioning of our national economy. 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. The Standards Development Organization Advancement Act of 2004 relieves SDOs from certain antitrust concerns and facilitates the development of pro-competitive standards," said R. Hewitt Pate, assistant attorney general in charge of the antitrust division, in a Department of Justice statement.

While enhancing the ability of standards developing organizations to use the NCRPA to protect their activities, the legislation specifically states that nothing in the new sections of the law “shall be construed to alter or modify the antitrust treatment under existing law of parties participating in standards development…” or “…other organizations and parties engaged in standard-setting processes not within the scope of this amendment to the title.” (Sec. 108)

Several ANSI members and accredited standards developers supported the effort behind the legislation, spearheaded by the American Society of Mechanical Engineers (ASME), ASTM International, and the National Fire Protection Association (NFPA).

“ANSI congratulates the work of many in the standards community that has culminated in the passage of HR 1086,” said 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.”

SDOs must file a proper notification with the Department and the Federal Trade Commission (FTC) to obtain the liability limiting protections provided by the Act. For guidance on proper notifications, please see the Department of Justice statement. (Click here to download)

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