September 20 Deadline Approaches for Filing Under SDO Advancement Act of 2004
Washington, DC, Aug 30, 2004
All ANSI-accredited standards developers are eligible for protection under H.R. 1086, which provides a degree of shelter for standards developers from the treble damages liability in current antitrust laws.
According to David Karmol, ANSI vice-president of public policy and government affairs, the FAQs provide background and general guidance on this recently enacted legislation.
“A large number of ANSI-accredited SDOs were raising questions about the impact of H.R. 1086 on their standardization activities,” explained Karmol. “It was prudent for ANSI to capture some of the most frequently asked questions and to package these materials for its accredited SDOs.”
The FAQs were developed by ANSI staff following conversations with House and Senate staff, and with some of those people working with the Department of Justice on implementation issues.
Questions or requests for additional information may be directly to David Karmol at firstname.lastname@example.org
NOTE: The following questions and answers are not intended as legal advice and should not be viewed as such. This document shall not be viewed as an alternative to seeking legal counsel regarding the individual circumstances of each organization’s operations, standards-setting activities, and overall antitrust exposure. These comments are also not intended to provide a definitive answer as to whether filing under the provisions of HR 1086 is appropriate, necessary or prudent for any particular organization.
A1 HR 1086 provides qualified standards developers with an opportunity to file for, and obtain, a limited exclusion from antitrust liability for treble damages. This protection is identical to the protection which has been available to joint venturers under the National Cooperative Research and Production Act since 1993, which also remains available to those utilizing a consortium, or other informal process to develop standards.
A2 Section 103 of HR 1086 defines a standards development organization (SDO) that is eligible to file under Section 107 of the Act.
An SDO is defined under the Act as an “... organization that plans, develops, establishes, or coordinates voluntary consensus standards using procedures that incorporate the attributes of openness, balance of interests, due process, and consensus in a manner consistent with the Office of Management and Budget Circular A-119.”
This definition includes all ANSI-accredited standards developers.
A3 Section 107 of HR 1086 requires a qualified organization that wishes to invoke the limitation on liability to file, with the Department of Justice and with the FTC simultaneously, a “written notification disclosing (A) the name and principal place of business of the standards developing organization, and (B) documents showing the nature and scope of such activity.”
A4 No. There is no provision in the law for an organization to file on behalf of another entity. ANSI may not file on behalf of its accredited standards developers. Under the terms of the law, a standards developer seeking the protection of the law must file for itself.
A5 Section 107 of HR 1086 indicates that an SDO that wishes to file, and obtain the law’s protection, must do so:
An SDO is not required to make a filing under the act.
A6 No. The Act protects only the standards developing organization. According to Section 108 of HR 1086, the entities involved in the standards-setting activity are in the same position relative to the antitrust laws as before the passage of the Act.
A7 No. Section 108 of the law explicitly states that it does not alter antitrust treatment under existing law, for standards developers within the scope of the act, or for organizations NOT within the scope of the Act.
A8 The Department of Justice has not given direct guidance on this issue.
There is little downside or risk to a standards developer that chooses to file a general statement of its standards activities. There is also general agreement that broad statements of scope* will likely be in the best interests of the SDO applicants, the Department of Justice, and other affected parties.
While it is possible that the DoJ may ask a standards development body for more detail, it is likely that the Department will be better served by a broad description than a narrow description. Some groups have suggested that they will file a document that contains a broad statement of the scope of their standards activities, along with an appendix, listing all current published and in-process standards, for illustrative purposes.
*NOTE: A broad statement of scope might be similar to the scoping statement(s) filed with ANSI when an organization applies for ANSI accreditation as a standards developer.
Click here to download a .pdf file containing all scope statements for ANSI-accredited standards developers.
A9 Yes, a number of points relating to instructions for filing the appropriate documents are identified in a June 24, 2004, press release posted to the Department’s website.
Any additional guidance will be forwarded to ANSI members and ANSI-accredited standards developers.