President Reagan yesterday offered a Republican "industrial policy" proposal, asking Congress to change antitrust, patent and copyright laws to help American firms cooperate in developing new industrial technologies.
The administration plan would permit competing companies in the same industry to establish joint research and development ventures without fear of antitrust lawsuits. The venture partners could be cited for violating antitrust laws only if their actions were found by the courts to be anticompetitive, and then would be liable only for actual damages and interest, rather than the triple-damage penalties now in the law.
D. Bruce Merrifield, assistant secretary of Commerce for technology, said a rapidly growing number of companies are forming such joint ventures, led by the electronics industry. Boeing Co., McDonnell Douglas and Lockheed Corp. are another example, he said. The development of the next generation of jetliners--a race by U.S., European and Japanese competitors--will require huge investments in research on new materials, electronics and engines, and "no one of those firms can bet their whole company on that," Merrifield said.
The proposal also would change copyright and patent laws to give innovators a greater opportunity to profit from new developments in an effort to speed the transfer of technological developments from laboratory to manufacturing and production.
Reagan announced the proposal after his initial meeting with his newly appointed National Commission on Industrial Competitiveness. Reagan said the legislation would "stimulate the creation and development of new technology, increase this country's productivity, and enable our industries to compete more effectively in world markets. . . ."
Two candidates for the Democratic presidential nomination, Sens. John Glenn (Ohio) and Gary Hart (Colo.), have introduced similar bills to encourage industrial research and development joint ventures. The House Judiciary Committee has scheduled hearings this week on the issue, and a broad array of business leaders support the idea.
The administration's move is seen as an effort to stake its claim to the joint research issue, which some congressional authorities believe will be an important part of the debate over the need for a national industrial policy.
It is one of the few industrial policy proposals with a good chance for passage by a politically divided Congress.
"The need for this hasn't been completely established, but it is clear no politician wants to be against joint R&D," said a House Democratic source.
Courts have not found joint research and development ventures to violate antitrust laws, said Rick Rule, a special assistant to the Justice Department's antitrust chief, William Baxter.
But the threat of triple-damage suits has discouraged many firms from attempting cooperative research, he said.
The administration's proposal says that, so long as such ventures do not involve price fixing or reduce innovation, they will not be held in violation of antitrust laws.
The second major element of the administration plan involves fast-paced developments in computer software and other information technologies. Often, holders of patents and copyrights--so-called "intellectual property"--must license their technology to other firms to assure rapid production and sale--particularly when the innovators are small, start-up firms.
The administration proposal prohibits courts from outlawing such licensing arrangements unless they are shown to be anticompetitive, and rules out triple damage liability in these cases. In addition, where companies are charged with misusing patents or copyrights, courts would have to consider the economic impact of such actions before refusing to enforce the patents or copyrights.