File No. 763.72113/447
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Statement by the Chairman of the Federal Trade
Commission (
Harris
)
Washington
,
November 2, 1917
.
The [Trading with the Enemy] Act provides for the issuance by the
Federal Trade Commission of licenses under enemy-owned or controlled
patents and copyrights. The provisions requiring reports by the
licensee of the use and enjoyment of the license, and the deposit
with the Alien Property Custodian of an amount not to exceed 5 per
cent of the gross sums realized from the sale of the licensed
subject matter, or a sum not to exceed 5 per cent of the value of
its use as determined by the Federal Trade Commission, amply protect
the patentee, or copyright proprietor, whose patent or copyright is
licensed.
The amount so deposited becomes a trust fund for the benefit of the
licensee and the foreign patentee or copyright proprietor, to be
accounted for after the war.
The act further provides that the foreign plaintiff is not limited to
the amount so deposited, but may recover whatever may be decreed to
be just and reasonable.
The evident purpose of the statute is, therefore, not to abrogate any
patents or copyrights or to permit raids upon such property. The war
has prevented the exercise and importation by enemies of many useful
inventions with the consequence of depriving our citizens of needed
articles. This is peculiarly the case with respect to many
German-owned patents covering valuable medicines and drugs. Examples
such as arseno, benzene, certain hypnotics and the non-toxic
substitutes for cocaine used in surgery to produce local anesthesia,
will occur to anyone.
The statute secures to our people on equitable terms the use of
articles of which, owing to the war, they are now deprived. Its
enforcement does not involve confiscation, destruction or
sequestration of property. The act merely follows the
well-recognized economic [Page 329]
theory behind all patent and copyright legislation established in
times of peace, that it is proper to attach to the grant of patents
and copyrights the condition that, for the benefit of the public,
the market be supplied at reasonable prices with the patented
article or the copyrighted thing. The present statute recognizes
this condition and does no more than this. It authorizes the use by
American citizens and corporations under Government supervision, for
the benefit of our own people, of patents and copyrights created by
our own statutes which the enemy owners are now incapable of
exercising, to the end that the American public may be supplied with
merchandise and articles which our Government by the grant of the
patent or copyright upon them has declared to be new and recognized
to be useful. The statute at the same time makes provision for the
compensation of the foreign patentee at the end of the war.
Very respectfully,
Federal Trade Commission
Wm. J. Harris
,
Chairman
