Farbwerke V Chemical Foundation, Inc., 283 U.S. 152 (1931)

Farbwerke v Chemical Foundation, Inc.

Nos. 179

, 180

, 181

, 182

, 271

, 272

, 273

, and 274

Argued March 6, 1931
Decided April 13, 1931
283 U.S. 152

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. Where use of enemy-owned patents was licensed under § 10 of the original Trading with the Enemy Act, of October 6, 1917, and the Alien Property Custodian, after the amendments of March 28 and November 4, 1918, seized the patents "and every right, title and interest with respect thereto," subject to the rights of the licensee, and assigned to the Chemical Foundation (see United States v. Chemical Foundation, 272 U.S. 1) all right and title which he thus acquired, held that the terms of the seizure should be construed with regard for the general purpose of the legislation to weaken the enemy, and were broad enough to include the right left in the enemy owners by the original Act to recover for the use of the patents under the license. P. 160.

2. Although § 10 of the Act of November 4, 1918, amending the Trading with the Enemy Act, declares that any requirement under it, when filed or recorded, shall "have the same force and effect as a duly executed conveyance, transfer, or assignment to the Alien Property Custodian," and although it be assumed that a mere transfer of a patent by voluntary conveyance does not pass the right to recover accrued royalties from a licensee, the effect of a seizure of patent rights by the Alien Property Custodian "with every right, title, and interest with respect thereto," is to take over such royalties as well as the patents. P. 161.

3. Subsection 10(f) of the original Trading with the Enemy Act provided for licensing the use of enemy-owned patents, and gave the owner of the patent one year after the termination of the war within which to sue the licensee for compensation. An amendment of this subsection by the Settlement of War Claims Act, March 10, 1928, provides that, in case of any patent seized and sold by the Alien Property Custodian, any suit, within the time limited, for royalties for the period prior to the sale shall be considered as brought by the "owner" if brought either by the Custodian or by the person who was the owner of the patent immediately prior to the seizure.

Held (since a construction which may render a statute unconstitutional must be avoided if possible), that the amendment was not intended to apply retroactively so as to confer upon a former enemy owner, in a suit brought in time under the original Act, the right to recover royalties either as against a corporation to which the patent, with the right to the royalties, had been transferred by the Custodian during the war, or as against the licensee. P. 162.

39 F.2d 366 affirmed.

Certiorari, 282 U.S. 819-820, to review a decree affirming a decree of the district court, 29 F.2d 597, by which it was adjudged that the right to recover royalties, accrued under a war-time license of enemy-owned patents, was not in the former German owners of the patents, but had passed to the Chemical Foundation in virtue of a seizure and transfer of the patents and royalty rights by the Alien Property Custodian.