871.542 Universal Oil Products Co./6

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

No. 205

Sir: Referring to my despatch No. 98 [95] of May 29, 1936, and to previous correspondence, in regard to the Rumanian Patents of the Universal Oil Products Company of Chicago, owners and licensors of the “Dubbs” petroleum cracking process, I have the honor to report that it now appears not improbable that the patents in question with the exception of the first patent which has expired, will be reinstated and the Company restored in the enjoyment of its patent rights in Rumania.

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It will be recalled that, as reported in my despatch No. 98 [95] referred to above, a Royal Decree was issued on May 4 last, annulling all four patents held by the company and that the company’s legal advisers had at that time under consideration the desirability of bringing an action against the Government (the Ministry of Industry and Commerce) with a view to the annulment of the Royal Decree and the reinstatement of their patents.

On July 14th last, action was brought against the Ministry of Industry and Commerce in the Administrative Contentious Office (“Action en Contentieux”) of the Court of Appeals for the cancellation of the Royal Decree of May 4. Damages were not claimed but the right reserved to bring separate action for damages. Subsequently, the hearing was set for November 5th.

Meanwhile, on May 12th, a hearing was held in the case for bringing evidence by means of witnesses to prove that the patents had been “worked” within the term provided in the law (inquest in futurum). At this hearing the only matter discussed was the request of Unirea for permission to participate. This was granted by the Court. Hearing was set for June 2, then July 7, and finally November 10.

Since May the Legation has kept in constant touch with Mr. Ion Edeleanu, the local representative of the Universal Oil Products Company. On November 4, Mr. Edeleanu informed me that a settlement had been reached between Unirea and Universal Oil Products on October 24. Universal agreed to waive any claims against Unirea. Unirea undertook to cooperate in obtaining the reinstatement of the patents, and also agreed that if it should build a cracking plant during the next two years, this should be a “Dubbs” plant. Furthermore, Unirea executed a regular Universal License Agreement.

It then became necessary to find a legal basis on which the Ministry of Industry and Commerce could revoke the decree of invalidation. At Universal’s suggestion, Astra Romana (Royal Dutch Shell) filed a petition with the Ministry pointing out that since Universal’s patents had been exploited in their refinery within the legal term, they could not avail themselves of the invalidation to refuse payment of royalties. Later, Astra Romana submitted proofs of their statements, and the Ministry’s legal advisers have found these proofs convincing. Secondly, Mr. Edeleanu will furnish the Ministry with a copy of the license agreement signed by Unirea, which will establish the fact that Unirea, who denounced the patents, has now acknowledged their validity. These two new facts will, so Mr. Edeleanu believes, constitute ample grounds for action by the Ministry looking to the cancellation of the decree, in which case Universal would waive all claims for damages against the Ministry.

In view of these developments, hearings in both court actions have been postponed for short periods. The Ministry’s lawyers have joined [Page 436]in requesting brief postponements in both cases, and Mr. Edeleanu has therefore great hopes that final favorable action may be taken before the Christmas holidays.

Mr. Edeleanu also informs me that an entirely different atmosphere has been found in the Ministry since the replacement of Dr. I. Costinescu by Mr. Valeriu Pop and since the appointment of Mr. Mircea Djuvara as Minister of Justice, who, the Department will recall, has been one of Universal’s legal counsel for this case.

The Legation will not fail to report further developments.15

Respectfully yours,

Leland Harrison
  1. The Department received a letter dated December 12, 1939, from Mr. J. Delattre-Seguy, expressing appreciation in behalf of the Universal Oil Products Company for the efficient cooperation afforded by the Legation in Rumania regarding the litigation on patent matters of the past few years. “Some of it has been successfully terminated for us; some is still pending before the Roumanian courts.” (871.542 Universal Oil Products Co./8)