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What You Need to Know about R&D Joint Ventures

Si2 and other research and development joint ventures fill an important need for semiconductor companies competing in a fast-changing global market. 

What are R&D joint ventures and what do you need to know about them?

The National Cooperative Research and Production Act of 1993 (NCRPA) is the fundamental law that defines R&D joint ventures and offers them a large measure of protection from federal antitrust laws. R&D joint ventures are formal agreements between two or more companies engaged in the research and development of technologies. They are proven tools for reducing design and production costs and speeding time-to-market.

The Federal Trade Commission and Department of Justice are the NCRPA watchdogs. They review applications for R&D joint ventures, approve or deny them, and monitor the operations of those approved, including any changes in membership.

Benefits of an R&D joint venture

Protection against legal challenges under Sherman and Clayton Antitrust laws is a significant benefit for members of NCRPA-approved, R&D joint ventures. In fact, no successful lawsuit has ever been filed against an NCRPA-approved R&D joint venture. Why? A “rule of reason” antitrust analysis shelters these protected collaborative activities. Without NCRPA protection, a more general “per se” viewpoint is used, where the behavior itself can be deemed to violate antitrust law. 

Also, if a violation occurs, the claimant can only receive actual damages, rather than treble damages available without NCRPA protection. This is a powerful deterrent against lawsuits.

Legal protections aside, R&D joint ventures can conduct a wide variety of activities, including:

  • perform theoretical analysis, experimentation or testing of basic engineering techniques
  • extend investigative findings into practical application for experimental and demonstration purposes
  • conduct experiments on models, prototypes and processes 
  • perform product certification testing
  • collect, exchange and analyze research or production information

Those types of activities mark a primary difference between an R&D joint venture and standards development organizations. SDOs can only perform voluntary, consensus standards activities, and though the NCRPA antitrust protection covers the SDO, it does not extend these protections to individual SDO members.

Any collaborative R&D activity done under the auspices and guidance of Si2 receives the same anti-trust protection. Si2 special interest groups, coalitions and working groups focus on solving industry problems, knowing they and their companies have the safety the NCRPA provides.

OpenStandards: A New Initiative for R&D Collaboration

OpenStandards, Si2’s newest member initiative, is the product of extensive member research and the core of a streamlined standards development process.

John Ellis, president and CEO, said market research and industry trends identified factors key to the creation of OpenStandards. “Speed and agility topped the list. The ability to quickly identify and create a needed standard are paramount.

“OpenStandards combines independent coalitions, technical advisory boards and new working into one, single-fee membership. Costs are reduced since companies can choose to participate in every activity, at any level, for one fee,” Ellis explained. “More than 90 percent of our members saw their dues decrease in 2016.” 

This was accomplished while maintaining the mandated safe-haven, anti-trust protection, he added. Activities currently part of OpenStandards are Chip-Package Codesign (3D), Design for Manufacturability, Low Power, OpenPDK, and Silicon Photonics.

Jerry Frenkil, director of OpenStandards, manages this program. Co-founder of Sente, he has more than 30 years’ experience in the semiconductor and EDA industries.

Si2 will explain the OpenStandards concept during a free webinar on Tuesday, January 26, 9-10 a.m. PST.