Suit was brought by the United States in the District Court for Delaware to set aside sales made by it to the Chemical Foundation of a number of patents, copyrights, trademarks, and other similar properties-which for brevity will be referred to as 'patents'-seized pursuant to the Trading with the Enemy Act of October 6, 1917, c. 106, 40 Stat. 411, as amended by the act of March 28, 1918, c. 28, 40 Stat. 460, and the Act of November 4, 1918, c. 201, 40 Stat. 1020, and other acts (Comp. St. § 3115 1/2 a et seq.). The complaint alleges that a number of domestic manufacturers as a result of war conditions had been able to combine and monopolize certain chemical industries in this country, and, fearing that at the end of the war German competition would destroy the monopoly, they conspired to bring about transfers and sales of the patents at nominal prices to themselves or to a corporation controlled by them; that the patents so obtained would control the industries in question and perpetuate the monopoly; and that the sales were procured through the fraudulent deception of the President, the Alien Property Custodian, and other officials. The answer denies conspiracy and fraud, and asserts that the transfers were made in good faith and pursuant to law, and that they are valid. There was a trial at which much evidence was taken. The District Court dismissed the complaint (294 F. 300), and its decree was affirmed by the Circuit Court of Appeals (5 F. (2d) 191.) Both courts found that no unlawful scheme, combination, or conspiracy was shown, and that there was no deception or fraud.
The United States took an appeal under section 241, Judicial Code (Comp. St. § 1218), and has applied for a writ of certiorari under section 240 (Comp. St. § 1217). The decree of the Circuit Court of Appeals was entered March 26, 1925, prior to the taking effect of the Act of February 13, 1925, amending the Judicial Code. Chapter 229, 43 Stat. 936 (Comp. St. § 1120). Since this is not a case in which the decree of that court is made final by section 128, the United States had the right of appeal. The application for certiorari is therefore denied.
The chemical industries in question are closely related to the production of explosives, gasses, and other things directly used in waging war, as well as to the production of dyestuffs and medicines essential to the welfare of the people. At the outbreak of the war many necessary medicines and other substances, as well as most of the dyestuffs used in this country, were imported from Germany or were manufactured under patents owned by enemy Germans. The amount of such things here produced was small. Importations were hindered by the blockade and ceased when this country entered the war. To meet the demand numerous plants were developed and by 1919 chemicals, dyestuffs, medicines, and the like were being produced here in large quantities. A number of associations of manufacturers were formed for the advancement of such industries; they included in their membership the producers of nearly all the dyestuffs and like chemicals made in this country. Mr. A. Mitchell Palmer was the Alien Property Custodian until he was appointed Attorney General, March 4, 1919. In order to protect the United States against enemy and foreign control of its chemical industries and to stimulate production here, he favored the seizure and sale of the patents in question. To that end a number of conferences were held between his representatives and those of the industries. The plan that was carried into effect was formulated under his direction.