On June 22, 2004, President Bush signed into law H.R. 1086, which includes the Standards Development Organizations Advancement Act of 2004 (SDOAA). The SDOAA is intended to limit the potential liability of standards development organizations (SDOs) with respect to conduct engaged in for the purpose of developing voluntary consensus standards. The SDOAA extends antitrust protections provided by the National Cooperative Research and Production Act of 1993 (NCRPA) to SDOs while those organizations are engaged in standards development activity.
The SDOAA amends NCRPA to provide that SDOs are subject to a rule of reason standard in any antitrust suit and to provide special rules regarding the recovery of attorneys' fees and costs in any antitrust case challenging a qualifying SDOs standards development activity. The SDOAA also provides qualifying SDOs with the opportunity to limit their antitrust liability for standards development activities to actual, as opposed to treble, damages.
SDOs automatically qualify for the rule of reason and attorneys' fee provisions, but to obtain the liability limiting protections under the law, SDOs must file a proper notification with the Antitrust Division of the Department of Justice, as well as the Federal Trade Commission. Notifications must 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. The Act was passed on June 22, 2004, so the 90-day deadline for SDOs with existing standards expires on September 20, 2004. Detailed instructions can be found at the Department of Justice's website: http://www.usdoj.gov/atr/public/press_releases/2004/204345.htm.
The SDOAA explicitly limits its protections to the activities of SDOs themselves. Quite commonly, trade associations and other SDOs function by involving companies or individuals with commercial or other interests in the area being standardized. These parties cannot take advantage of the SDOAA and remain subject to potential liability for treble damages and attorneys fees and costs should they lose an antitrust suit.
Because of this exclusion of common participants in SDO activities, it remains to be seen whether the SDOAA will enhance standard-setting activities, as its authors intended.
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