Memorandum by Mr. Paul H. Nitze, Deputy to the Assistant Secretary of State for Economic Affairs, to the Under Secretary of State (Lovett)
The Protocols for supply of material to the U.S.S.R. during the war included certain oil refinery equipment covered by United States patents and involving patented processes in which United States citizens have interests. In connection with these interests the United States Government paid royalties covering use during a limited wartime period and has advised the Soviet Government that, pursuant to the Master Lend-Lease Agreement, it is expected to negotiate license agreements with the patent holders. The basic advice to the Soviet Government was contained in a letter dated June 8, 1943, to General A. I. Belyaev1 from Mr. Stettinius, then Lend-Lease Administrator, which contains the following paragraph:
“In order that the rights of United States nationals who have patent rights in and to the aforesaid processes and technical information may be protected, I hereby request, under Article IV of the Master Agreement of June 11, 1942, between the Government of the United States and the Government of the U.S.S.R., that the Government of the U.S.S.R. agree, first, that it will not use the processes or information except in accordance with the terms and conditions of the licenses and, secondly, that it will not use the processes or information after the termination of the present national emergency, as determined by the President of the United States, except upon such terms and conditions of compensation to United States nationals who have patent rights in and to the processes or information as shall be mutually agreed upon as fair and reasonable on the basis of use of the processes or information and in the light of the compensation to which such nationals would be entitled for similar use in this country by or on behalf of the Government of the United States.”
It is now considered appropriate to call the attention of the Soviet Government to the request contained in above letter, and to reiterate [Page 1016] that request. This is being done by means of a note to the Soviet Ambassador, submitted for your clearance along with this memorandum.2
You will notice that the second portion of the request contained in the quoted paragraph depends upon a Presidential determination of the “termination of the present national emergency.” The history of this matter, found in the files of the Department and according to those who participated in the preparation of Mr. Stettinius’ letter, indicates that it was assumed that the “emergency” referred to therein was the same, and would terminate at the same time, as the “emergency” mentioned in Article V of the Master Lend-Lease Agreements, which is concerned with the right of recapture. This seems to be the only conclusion that is warranted by the documents.
As you will recall, the President, at the suggestion of the Department, issued a statement on July 8 , 1948, declaring that the emergency mentioned in the Master Agreements had been determined to have terminated. It follows that the emergency mentioned in the above-quoted paragraph has also terminated, and the Soviet Government is obligated to refrain from using the processes and information involved except, as provided in letter from Mr. Stettinius, upon terms and conditions agreed by the interested United States nationals.
The note which you are now asked to approve has been drafted in the light of the foregoing conclusions.