871.542 Universal Oil Products Co./4

The Minister in Rumania (Harrison) to the Secretary of State

No. 56

Sir: With reference to my despatch No. 40 of January 3, 1936, File No. 340/854)4 I have the honor to submit a supplementary report with regard to further action which the Legation has taken to protect the interests in Rumania of the Universal Oil Products Company of Chicago, Illinois, owners and licensors of the Dubbs petroleum cracking process.

It may be well to recall that, according to information presented by the local representative and the attorney of the Universal Oil Products Company, Messrs. Edeleanu and Roman, the four basic Rumanian patents controlling the Dubbs process appeared to be in imminent danger of arbitrary cancelation by the Ministry of Industry and Commerce as a result of the initiative of certain adversaries of the American concern which had been legally found to be infringing the Dubbs process methods in their Rumanian refineries; and that, under the circumstances, I ventured, on December 20, 1935, to make informal representations to Dr. Costinescu, the Minister of Industry and Commerce, which seemed to have the desired effect of blocking any immediate and precipitate action to annul the patents in question.

The matter rested thus for approximately a month.

[Page 430]

On January 28, 1936, Engineer Edeleanu called at the Legation to say that the affair had again become critical, Secretary General Gheorghiu of the Ministry of Industry and Commerce having for a second time ordered attorney Theodorescu of the Legal Division (Contencios) of that Ministry to prepare and submit a report (referat) calling for the cancelation of the four patents. This report had been unofficially inspected by Messrs. Edeleanu and Roman. According to the former, it called for the nullification not only (1) on the ground of “non-working” in accordance with Article 9, paragraph c, of the Rumanian Patent Law of 1908, but also on three other counts subject to administrative determination, namely:

2)
that two of the patents should have been registered as “importation” patents, rather than regular ones;
3)
that one patent was registered as an independent patent, whereas it represented simply an “improvement” of an existing one;
4)
that Universal Oil Products Company had not submitted evidence to prove exploitation—in particular, that the authorizations for construction of the various installations had not been submitted, and that the existence of the plants could not therefore be accepted as proved. (This Mr. Edeleanu described as comparable to doubting the existence of an individual who has not produced his birth certificate. The construction authorizations, incidentally, were issued by a bureau in the Ministry of Industry and Commerce.)

Mr. Edeleanu stated further that the Patent Office, which is normally primarily responsible for all such action, had not even been consulted concerning the preparation of the report.

Although the representatives of the Universal Oil Products Company were informally aware that further charges of invalidity of the patents had been made in memoranda submitted to the Ministry by their opponents, they have never been officially notified thereof or invited to contest the accusations. Consequently on January 31, 1936, they addressed the Ministry of Industry and Commerce, directly and through the Court (a special delivery procedure), stating that in view of the non-notification it was presumed that the new charges had been considered as unfounded, but asking, if the Ministry decided that they were worthy of being discussed, that Universal be given a chance to reply. At the same time the opportunity was taken to recall that the Court action undertaken by the Universal Oil Products Company at the express suggestion of the Ministry (in its letter of July 16, 1935, a copy of which is enclosed5), looking toward the appointment of a technical expert to determine by investigation on the spot whether the four patents have been exploited in accordance with the Rumanian Law, is still pending, the hearing by the Court of Appeals being set for March 30, 1936 (See despatch No. 40, January 3, 1936, page 76).

[Page 431]

The Legation was informed of this step in a letter from Universal Oil Products Company dated February 1, 1936, a copy of which is enclosed.7 In this letter Engineer Edeleanu also stated that he had learned that the cancelation report (referat) had been referred by Secretary General Gheorghiu to the consultative Board of Lawyers (Consilul de Avocati) attached to the Ministry of Industry and Commerce, in order to secure the added weight of the approval of this group in support of any eventual decision of annulment.

While Mr. Edeleanu expressed the belief—which later proved to be erroneous—that the individual action of the Universal Oil Products Company would be successful in delaying the approval of the Board of Lawyers, he was considerably worried as to the possibility of unfavorable action being taken. He claimed that, in any case, the Board’s approval was likely to be more or less automatic and not based upon serious consideration.

Further action seemed advisable to ensure against the danger of an unfair decision. Consequently, the question was seriously studied by the Legation, particularly from the point of view of the possible applicability of the International Convention for the Protection of Industrial Property, signed at Washington on June 2, 1911,8 to which Rumania and the United States are parties.

It appeared that this Convention offered a solution to the question, in the sense that there seemed to be no question but that the Universal Oil Products Company had taken every action consistent with the complicated and costly nature of the process involved to exploit the patents effectively in this country, under the interpretation provided by Article 5 of the Washington Convention. It seemed appropriate, therefore, that this aspect of the question be called to the attention of the Rumanian Ministry of Foreign Affairs. Accordingly, an Aide-Mémoire (copy enclosed)7 was prepared, summarizing the principal legal and administrative actions in the case and, with reference to the applicable portion of the Patent Convention, stating the belief that the Universal Oil Products Company did not seem to be subject to any accusation of “inaction” in seeking to exploit the Dubbs patents in Rumania.

Mr. Titulescu9 being absent from the country, an appointment was made with the Undersecretary for Foreign Affairs Radulescu and on February 8, 1936, the matter was presented to him. The Aide-Mémoire was read, the Undersecretary following in the French translation. [Page 432]At the close of the interview, this communication, accompanied by unofficial translations into French and Rumanian, was left with the specific request that it be brought to the attention of the Ministry of Industry and Commerce.

It has not yet been ascertained whether the Aide-Mémoire, or translations thereof, have actually been forwarded to the Minister and attached to the files of the case.

Meanwhile, however, Mr. Edeleanu has informed the Legation that the matter continues to be active. He states that the dossier, to which has now been added the report (referat) recommending cancellation approved by the Board of Lawyers at the Ministry of Industry and Commerce, is next to be referred to the Superior Council of Lawyers attached to the Ministry of Justice. This is nominally the highest consultative legal group in the Rumanian Government. There, Mr. Edeleanu asserts, the question will again—as it was in the Legal Division of the Ministry of Industry and Commerce—be decided under the influence of Mr. Aurel Bentoiu, former attorney for the “Phoenix” group, and now Undersecretary of State at the Ministry of Justice. Thus, he claims, the case will have been entirely wrenched from the Patent Office and the usual administrative channels.

The affair remains in this state of uncertainty at the present time.

In view of the possibility of serious developments within the near future, I should greatly appreciate receiving an expression of the Department’s opinion as to the soundness of the point made in the enclosed Aide-Mémoire, and instructions specifying any further steps which may be deemed appropriate or advisable.

Respectfully yours,

Leland Harrison
  1. Legation’s file number.
  2. Not printed.
  3. Ante, p. 426, paragraphs 5 and 6.
  4. Not printed.
  5. Foreign Relations, 1913, p. 1363.
  6. Not printed.
  7. Nicholas Titulescu, Rumanian Minister for Foreign Affairs.