U.S. Technology Policy, Intraindustry Joint Ventures, and the National Cooperative Research and Production Act of 1993

By Hemphill, Thomas A. | Business Economics, October 1997 | Go to article overview

U.S. Technology Policy, Intraindustry Joint Ventures, and the National Cooperative Research and Production Act of 1993


Hemphill, Thomas A., Business Economics


The specter of U.S. antitrust policy is always lurking just beyond the corporate competitive radar screen. In the late 1970s, an emerging concern among many American business leaders, government officials, and corporate and academic economists was the perceived antitrust prohibition against intraindustry research and development (R&D) joint ventures. This antitrust prohibition was viewed as a serious impediment to America's future international competitiveness and thus a legitimate area of focus for the nation's seminal technology policy. To remove this antitrust barrier to increased national competitiveness, said the critics, would require an act of Congress. Intense business lobbying efforts eventually obtained the legislative antitrust relief requested as another step in the development of a modern U.S. technology policy.

U.S. TECHNOLOGY POLICY(1)

The antitrust issues concerning intraindustry joint ventures were first addressed by the Carter administration in its efforts to formulate a national technology policy. In the spring of 1978, the U.S. Department of Commerce undertook an eighteen-month study called the Domestic Policy Review of Industrial Innovation (DPR) that involved 28 federal agencies, 250 government officials, and some 150 representatives of business, industry, labor, academia, and the public who served on the advisory committee on industrial innovation. As Dr. Frank Press, President Jimmy Carter's science advisor pointed out, more emphasis would be placed [by the DPR] "on the indirect measures the government can take to influence innovation - to create a better economic climate and more incentive for industry to venture into something new (Wolff, 1980:11)." On October 31, 1979, President Carter unveiled the results of the DPR: thirty-two measures in nine "critical areas," including strengthening the patent and trademark system, clarifying antitrust policy on collaboration among firms in R&D, financially and technically assisting small innovative firms, and opening federal procurement to innovations.

Beginning in 1980 the Carter administration sponsored and Congress passed the first major policy initiative promoting cooperative R&D - the Stevenson-Wydler Technology Innovation Act of 1980. The Stevenson-Wydler Act promotes cooperation among academia, federal laboratories and industry and makes technology transfer a mission of all federal laboratories. A string of technology-enhancing legislation followed, including the Bayh-Dole Act of 1980, the Small Business Innovation Development Act of 1982, the Trademark Clarification Act of 1984, and the National Cooperative Research Act of 1984.

The Bayh-Dole Act unifies a fragmented U.S. patent system, encourages the use of the patent system to promote the utilization of inventions flowing from federally funded research, and fosters competition between universities, government, and industry. The Small Business Innovation Development Act seeks to direct the flow of federal money to small industries by requiring that government agencies with extramural R&D budgets target 0.2 to 1.25 percent of their budgets specifically for small business. With the passage of the Trademark Clarification Act, industrial firms involved in cooperative agreements with federal labs or receiving federal money for R&D work are restricted to a period of two years to apply for title to the invention. If no such application is made, the federal government can transfer the technology to another interested party and therefore foster the commercialization of technologies developed at taxpayer expense. The National Cooperative Research Act of 1984, however, was the first legislation passed by Congress directly addressing contentious antitrust issues dealing with intraindustry joint ventures.

THE NATIONAL COOPERATIVE RESEARCH ACT OF 1984

A bipartisan consensus emerged among American policymakers in the early 1980s: For the United States to remain the world's most powerful economy, it must maintain its technological leadership through cooperative R&D efforts among firms in the same industry. …

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