Antitrust Advantages to Joint Ventures under the National Cooperative Research and Production Act

• Author: Veronica M. Dougherty
• DOI: 10.1177/0003603X9904400408
• Date: 01 December 1999
• Published date: 01 December 1999
• Subject Matter: Article

The Antitrust Bulletin/Winter 1999

Antitrust

advantages to

joint

ventures under the National

Cooperative Research and

Production Act

BY VERONICA M. DOUGHERTY*

I.

Introduction

1007

Significant changes in antitrust doctrine are sometimes

not

imme-

diately noticed. Ajudicial decision changing the law may issue but

for

a

time

remain dormant, ignored by practitioners who choose

familiar tools over the one not yet tried and tested. Without at least

ashort history

of

judicial construction, the existence and contours

of

the

new

doctrine remain something of an unknown.

Even

if a

new

tool is subject to some judicial application,

it

usually requires

the further testing and refinement

of

repeated applications before it

becomes

astandard

part

of

the practitioner's repertoire. There is

*Assistant Professor of Law, Cleveland-Marshall College of Law,

Cleveland State Univesity.

AUTHOR'S NOTE: This article was made possible by a grant from the

Cleveland-Marshall Fund. Heartfelt thanks to Joel Finer and George H.

Taylor

for

comments on earlier drafts

of

this article and for helpful dis-

cussions

and

support.

© 2000 by Federal Legal Publications, Inc.

1008

The antitrust bulletin

something

of

achicken and egg problem here: without

judicial

application of a doctrine, it is unlikely to be used by practitioners;

but if it is not raised by practitioners and placed before courts, the

judicial testing and clarification will not occur, leaving reliance on

the doctrine a risky choice for practitioners.'

Although astatute and not a judicial decision, The National

Cooperative Research and Production Act

of

1993 (NCRPA)2 pro-

vides an

example

of the model

of

evolutionary

development

in

antitrust doctrine.' The statute provides significant tools for prac-

titioners

and

joint

venturers,

but

has

made

no

telling

mark

in

antitrust jurisprudence in the 6 years since it was enacted.' This is

Arecent reminder of this appeared last year. In writing about the

history of the "antitrust injury" doctrine, authors Jonathan M. Jacobson

and Tracy Greer point

out

that, although "[i]n the last fifty years, few

decisions have had a greater impact on antitrust than Brunswick, [never-

theless] full understanding and acceptance of the Brunswick doctrine

took

time." See Jonathan M. Jacobson &Tracy Greer, Twenty-One Years

of

Antitrust Injury: Down the Alley With Brunswick v. Pueblo Bowl-a-Mat,

66

ANTITRUST

L.J. 273 (1998). In an article to which Jacobson &

Greer

refer, see id. at 284 n.78, William H. Page &Roger D. Blair show the

gradual increase in district court citations to Brunswick in the decade fol-

lowing its decision. See William H. Page & Roger D. Blair, Controlling

the Competitor Plaintiff in Antitrust Litigation, 91

MICH.

L.

REV.

111,

114 n.25

(1992).

Significantly,

they also

note

that

this

evolutionary

development is that of antitrust law more generally.

15 U.S.C. §§

4301-06

(1994).

Indeed, it was not for two decades after enactment that the Sher-

man Act itself was developed in Standard Oil Co. v. United States, 221

U.S. 1 (1911), and Chicago Board of Trade v. United States, 246 U.S.

231 (1918), was not decided until nearly three decades after enactment of

the Sherman Act.

The evolutionary process may be slower with a statute than with a judi-

cial decision. See infra text at notes 30-33. While the NCRPA applies to a

more limited subject matter than does the Brunswick antitrust injury doc-

trine, the change in approach that the NCRPA represents may give it impor-

tance beyond its actual coverage. See infra note 102 and accompanying text.

4

The

NCRPA was created in 1993, when the predecessor National

Cooperative Research Act (NCRA), Pub. L. No. 98-462, 98 Stat. 1815,

was

amended

and

renamed

by

the

National

Cooperative

Production

Amendments (1993 Amendments). Pub. L. No. 103-42, 107 Stat. 117.

NCRPA 1009

particularly puzzling since

joint

ventures, the

Act's

focus, are cur-

rently the subject of much attention." Because it is statutory law,

practitioners and

business

planners using

the

Act face less risk

than they would using an undeveloped

judicial

doctrine, which

might, after conduct was structured on it, be deemed inapplicable

because

of

distinguishable facts.

The

NCRPA is applicable within

its scope to all takers.

How

many takers there have been is impos-

sible to say," but one thing can be said: the

Act

has not been tested

and applied in the courts." So, though it exists as law, ambiguity

The FTC, for example, is in the midst of a Joint Venture Project,

see

Comment

and

Hearings

on

Joint

Venture

Project,

62 Fed. Reg.

22,045, 22,946 (Apr. 28, 1997), and the Antitrust Law Journal recently

presented asymposium issue on Antitrust Scrutiny

of

Joint Ventures. See

Symposium, Antitrust Scrutiny

of

Joint Ventures, 66

ANTITRUST

L.J. 641

(1998).

See infra part V.A.

A search revealed no cases applying either the NCRPA or its pred-

ecessor, the NCRA. Only a handful of cases even mentioned the Act. See

California v. ARC American Corp., 490 U.S. 93, 101 n.5 (1989) (citing

NCRA as indirect support for the general rule that "the federal antitrust

laws [do not] expressly preempt state laws permitting indirect purchaser

recovery"); Addamax Corp. v. Open Software Found., Inc., 152 F.3d 48,

50 n.2 (1st Cir. 1998) (noting that defendant was registered under NCRA

but that "that status has no direct importance for the issues before us");

Protocomm Corp. v. Fluent, Inc., 1995 WL 3671, *17 n.15 (E.D. Penn.

1995) (noting that "the transfer of the license here

...

will serve the

federal interest in promoting technological

joint

development efforts"

and citing NCRA); Addamax Corp. v. Open Software Found., Inc., 888

F. Supp. 274, 277 n.3 (D. Mass. 1995) (noting that defendant was regis-

tered under NCRA and that statute "offers some antitrust protection to

joint

ventures

formed for

specifically

enumerated

purposes");

Max

Planck Gesellschaft Zur Foederung Der Wissenshaften, E.V. v. General

Electric Co., 858 F. Supp. 380, 384 (S.D.N.Y. 1994) (citing NCRA as

indirect support for statement that disputes such as one at issue in case

"inhibit collaboration in technological areas that can benefit both the par-

ties and the public as well as the international community"); SCFC ILC,

Inc. v. Visa U.S.A. Inc., 819 F. Supp. 956, 982 n.29 (D. Utah 1993) (not-

ing that expert testimony about policy behind NCRA does not support

defendant's policy argument that would have heightened plaintiff's bur-

den in the case; policy decisions are for Congress, not the courts); United

States v. Western Elec. Co., 675 F. Supp. 655, 662 n.30 (D. D.C. 1987)

(citing NCRA as an example of a statute giving a more restrictive defini-