United States v. Imperial Chemical Industries, Ltd.

We now approach the task of formulating a final decree designed to prevent and restrain the violations of law which we have found. 15 U.S.C.A. § 4.

Our objective is to fashion, in the terms of a decree, means by which the agreement found to exist is terminated, its revival prevented and its effects destroyed by the reestablishment of competitive conditions insofar as they pertain to United States exports and imports. The decree must be based upon the facts as we have found them, and designed to be carried out with a minimum of judicial supervision and control of the future activities of the defendants. Cf. United States v. N. Y. Coffee & Sugar Exchange, 1924, 263 U.S. 611, 44 S.Ct. 225, 68 L.Ed. 475.

Where competition • has been eliminated, it must be restored. Only those provisions reasonably necessary to accomplish correction and adjustment of a dislocated competitive situation may be applied.

The essence of the violation found was the unlawful agreement to divide world territories. It was this enduring and basic understanding which was fundamental to all of the dealings of the conspirators. It was to accomplish this purpose and end that the various means were adopted.

■ [2] The decree will contain injunctions prohibiting agreements and arrangements between the defendants dividing territory and allocating customers and markets so as to unlawfully limit the commerce of the United States. DuPont shall not be permitted to make agreements restraining their exports throughout the world, and particularly to those markets which have been previously assigned to ICI as its exclusive territory, and to those countries in which the jointly-owned companies functioned. DuPont shall file with the court annually for a period of five years reports showing specifically the nature and, extent of their efforts to increase their foreign trade.

We shall retain jurisdiction over all the defendants for a period of five years after the entry of judgment for the purpose of enabling the court to either modify the relief granted or to grant such other or additional relief required to accomplish the purpose of the decree and to terminate the restraints on United States trade and commerce which have been or during that period are found to have been created or imposed by acts of the defendants or any of them.

The final decree will contain general injunctive provisions directed to the defendants which are calculated to prevent effectively a continuance or revival of the agreements and understanding between ICI and duPont. The decree, however, must contain additional provisions to implement these injunctive directions, so that they are made probable of observance. The jointly-owned companies and the patents, processes and technologies of the defendants must be brought within the scope of the judgment. ,

The physical properties and stockholdings in the jointly-owned companies constituted part of the means by which the unlawful agreement to divide world trade was brought to fruition.

The restraints sought to be accomplished were achieved also in part by the patents and processes agreements. The patents held by the defendants did not give them control of all the products covered by their understanding; as to many products, control resided in their technology and trade know-how. As to other products, control was possible because of the size of their industrial and selling organizations, and the foothold they enjoyed in the markets divided. This placed them in a position where acting jointly it was possible for *221 them to meet and regulate, if not overcome, the competition offered by others.

It was not required of the Government to establish that the defendants had power to control the markets they agreed to divide and allocate, since the suit was filed for violation of Section 1, 15 U.S. C.A. § 1. American Tobacco v. United States, 1946, 328 U.S. 781, 809, 66 S.Ct. 1125, 90 L.Ed. 1575. Although this is so, we must in determining the extent of the restraints give consideration to the position of dominance held by the defendants. We conclude that restraints must be imposed upon not only the exercise of the patent monopolies but also with respect to technology and know-how, as well as their commercial activities.

We shall first consider the extent of the relief which is to be granted with respect to patents and technology.

While the maintenance of a competitive economy is of prime importance, we may not seek to achieve that end by unwarranted judicial whittling down of patent rights or by the insertion in the decree of provisions for which there is no support in law.

We have found that the exchange of patents, processes and know-how served as direct instruments used by the conspirators to achieve their unlawful purpose.

A patentee may, if he sees fit, reserve to himself the exclusive use of the discovery or he may license those of his own choice and selection to use it. But evil lies in the illegal use of this lawful right; by concert of action between the conspirators the full and complete exploitation of the patents was prevented by the allocation of territories and agreed restraints placed upon the employment of the patents. The rights of the patentees were exercised for a purpose not intended by our patent laws and in derogation of vested and paramount rights of the public. Such misuse of the patent renders the future use of those rights subject to and amenable to judicial control to prevent a continued or new abuse. The misuse of. a patent may result in denial of relief to the patentee whether he proceeds against a direct or contributory infringer, Katzinger Co. v. Chicago Metallic Mfg. Co., 1947, 329 U.S. 394, 67 S.Ct. 416, 91 L.Ed. 374; but see, Bruce’s Juices v. American Can Co., 1947, 330 U.S. 743, 67 S.Ct. 1015, 91 L.Ed. 1219, on availability of defense of violation of anti-trust law in actions on a contract. In private litigation misuse of patents in anti-trust violation constitutes a defense which may be pleaded; in litigation instituted by the Government such misuse affords basis for injunctive relief of both a restrictive and mandatory nature; in neither may the misuse result in a judgment of forfeiture of all patent rights. “The limited monopolies granted to patent owners do not exempt them from the prohibitions of the Sherman Act and supplementary legislation.” Standard Oil Co. v. United States, 1931, 283 U.S. 163, 169, 51 S.Ct. 421, 423, 75 L.Ed. 926.

We do not accept as correct the proposition that compulsory license of United States patents is appropriate only in those instances where required to remove specific restraints upon the manufacture and sale of specified products in the United States caused by the unlawful use of patents to suppress domestic competition. To do so would be to make nugatory the dual aspects of our anti-trust laws, which make unlawful restraints, placed upon our foreign trade as well as our domestic commerce. It is true that in most cases in which compulsory licensing has been decreed, it has been found that the patents have been unlawfully used to suppress domestic competition. Not many actions have been instituted to suppress restraints upon our foreign trade, resulting from agreement among international industrialists to which Americans have made themselves parties. We have had few suits which have presented a situation similar to that revealed here, and which call for remedies we now find necessary.

Although no charge has been made of monopolization and no evidence presented to sustain such a charge, we find that the principal defendants are potent factors in the fields in which they have engaged. Their important position, in these industries was such that it made their unlawful understanding not the fanciful dream of wishful entrepreneurs but an existing situ *222 ation which enabled them to see its accomplishment throughout the world. Here, there was not a mere attempt to allocate territories; restraints upon our foreign trade were in fact accomplished.

The Government has asked that compulsory licensing be decreed of future as well as existing patents and technology. The power of the court to direct licensing does not arise in this case from a unilateral decision by a patentee to refrain from using the patent. Such a course, prompted by legal motives would be well within the rights of a patentee. Cf. Special Equipment Co. v. Coe, 1945, 324 U.S. 370, 65 S. Ct. 741, 89 L.Ed. 1006.

We decree compulsory licensing because the patent rights which were granted the defendants were misused. The failure to export products manufactured under the patents resulted from the agreement to divide territories. What might have been done lawfully by one, acting as a result •of his own decision, became unlawful because it was brought about by common agreement. The failure to export, which might have been legal in itself, also became unlawful because of the purpose and end it was employed to accomplish. One of the means employed was the patents and processes agreements. The needs and requirements of local markets from which the patentee was excluded by the underlying agreement were met by patent grants to fellow conspirators. Thus, the patent themselves and the right to grant licenses under them were used to implement and ■carry out the allotment of territories. The use of these existing patents must be regulated because of their past abuse.

But it does not follow that there is need for the regulation of the use of future patents and future technology. Patents which had not been granted, and technology which had not been developed could not have been put to misuse in the past. We may not act entirely upon an assumption that the defendants will continue in their disregard of the law and violate the injunctions of a final judgment. Cf. Timken Roller Bearing Co. v. United States, 1951, 341 U.S. 593, 604, 71 S.Ct. 971, 95 L.Ed. 1199 We may not take from the defendants all incentive for future endeavour by depriving them in advance of the rewards which might come to them from future patents and technology. Such relief “would discourage rather than encourage competitive research.” United States v. National Lead, 1947, 332 U.S. 319, 359, 67 S.Ct. 1634, 1653, 91 L.Ed. 2077.

That the property rights in these patents may be substantial and the incentive and desire of duPont to develop and explore further possibilities is real cannot be disputed. DuPont is spending approximately $45,000,000 a year on research and has recently placed in operation an experimental station costing $30,000,000. Its past development of new products and processes has done much to promote our national economy and to meet the needs and requirements of national defense. We shall impose no unnecessary restrictions to interfere with the continuance of these activities. The evidence also establishes that duPont spent about $45,000,000 on nylon research and has invested $196,800,000 in plants and facilities for nylon production.

Although in National Lead compulsory licensing was decreed as to patents “issued to, or acquired by, any of the appellant companies within five years from the date of the decree”, 332 U.S. at page 348, 67 S.Ct. at page 1648, it was limited to a single product — “titanium pigments or any process for the manufacture of such pigments”. In Hartford-Empire Co. v. U. S., 1945, 323 U,S. 386, 65 S.Ct. 373, 89 L.Ed. 322, compulsory licensing was limited in respect to future applications and resulting patents to a group of machines designed to perform particular functions in the glassware industry. 323 U.S. at page 417, 65 S.Ct. 373. In United States v. U. S. Gypsum Co., where the term for compulsory licensing of future patents was left to the discretion of the trial court, a single product was involved — gypsum board. 1950, 340 U.S. 76, 90, 71 S.Ct. 160, 95 L.Ed. 189. To include here the future patents and new processes of large research organizations, sweeping in a vast variety of chemical products, would be punitive as well as destructive of that driving incentive which has accounted *223 for much of the remarkable development of the chemical industry.

What patents and technology are we to say then belong to the past and what to the future ? We have had evidence from which we find that the basic understanding, although modified in part was not abandoned in whole, but was continued down to the conclusion of the trial. We fix then, June 30, 1950 as the date which will mark the time between the past and the future for the purpose of our decree and govern those provisions which direct the compulsory licensing of patents and technology.

We shall add, however, to these present patents all improvement or new patents in relation to any product with respect to which the defendants are obligated by existing agreement to grant licenses to each other or to third parties, or which are required to be licensed under the terms of our decree.

The Government seeks a decree directing the granting of compulsory licensing on a reasonable royalty basis of many of duPont’s and Id’s United States patents; as to the nylon patents, however, it asks for compulsory royalty free licensing.

We have had no evidence submitted as to many of the products covered by these patents, or as to the effect of the unlawful use of the vast majority of these patents and technologies. What has been presented has dealt only with the patents and processes agreements, the negotiations which led to them and the operations under them which throw light upon the interpretations given them. Proof as to sales of specific products has -been meagre and confined to a few items. We are therefore not in a position to direct a general compulsory licensing of either patents or technology. We are restricted to those patents and technologies which cover products common in manufacture to both ICI and duPont, or to either of them and any of the jointly owned companies.' Cf. United States v. Paramount Pictures, 1948, 334 U.S. 131, 152, 68 S.Ct. 915, 92 L.Ed. 1260; Schine Chain Theatres v. United States, 1948, 334 U.S. 110, 127-130, 68 S.Ct. 947, 92 L.Ed. 1245. These products were directly subject to the restraints imposed by the basic understanding for the division of world trade.

We pause now to note that the various patents and technologies involved were not as a result of the joint efforts of the defendants. Although there was a constant exchange of research progress and an unceasing flow of technical information between the defendants there is no evidence to support the conclusion that either the patents secured or the technology practiced by the defendants came to them as “benefits of their conspiracy.” Schine Chain Theatres v. United States, supra, 334 U.S. at page 128, 68 S.Ct. at page 957. In fact, of three major fields of patents— nylon, polythene and neoprene — quite the contrary is true. Nylon was developed solely by duPont and with great secrecy. It was not until duPont research was well advanced that ICI was first informed of it. Polythene was entirely the product of ICI; the part duPont took in its further development was primarily to aid the joint war effort of the United States and Great Britain, not to advance the unlawful understanding between the defendants. Neoprene was initially licensed by a third party to duPont; IGI did nothing to improve it. We cannot conclude on the proof before us that the duPont and ICI patents were products or results of their unlawful agreement to divide world markets.

The validity of no patent was questioned by the Government. For the purposes of this decree we are then encompassed by the factual finding that not only were the patents validly issued but also that they are lawfully owned by the record holders. The power of the court to direct the issuance of royalty free licenses on any of these patents is open to serious question. Cf. Hartford-Empire Co. v. United States, supra, 323 U.S. at pages 413, 414, 65 S.Ct. 373. To provide for the issuance of royalty free licenses with respect to any of these patents would be to destroy the total value of the patent. We find no statutory authority for decreeing such remedies. That the granting of such relief would raise a *224 substantial constitutional question has been recognized. For, it has been written:

“That a patent is properly, protected against appropriation both by individuals and by government has long been settled. In recognition of this quality of a patent the courts, in enjoining violations of the Sherman Act arising from the use of patent licenses, agreements, and leases have abstained from action which amounted to a forfeiture of the patents.” Hartford-Empire Co. v. United States, supra, 323 U.S. at page 415, 65 S.Ct. at page 387.

It appears that the question of the constitutionality of such a provision was later noted but not passed upon in United States v. National Lead, supra, 332 U.S. at page 349, 67 S.Ct. 1634.

It has apparently been the consistent policy of the Government to seek decrees which would in effect nullify the patents which have been used as a means to accomplish the restraints imposed. But in U. S. v. National Lead, D.C., 63 F.Supp. 513, the trial court refused to direct royalty free licenses and this was approved by the Supreme Court. 332 U.S., 353, 359, 67 S. Ct. 1634. In Hartford-Empire, Mr. Justice Roberts writing for the majority struck from the decree of the trial court the provision requiring compulsory royalty free licensing.

On at least three occasions the Supreme Court has refused to grant like relief to the Government with respect to know-how. Hartford-Empire Co. v. United States, supra.

We would read the Morton Salt Case, (Morton Salt Co. v. C. S. Suppiger Co.) 1942, 314 U.S. 488, 788, 62 S.Ct. 402, 86 L.Ed. 363, and B. B. Chemical Co. v. Ellis, 1942, 314 U.S. 495, 62 S.Ct. 406, 86 L.Ed. 367, as holding not that the patentee lost all right to injunctive relief but only that such relief was to be denied him so long as anti-trust violations continued. Misuse of patent rights does not work a forfeiture of the patent; it only suspends the right of the patentee to obtain judicial relief so long as his misuse ■continues or its effects have not been dis sipated.

We do not read either Morton Salt or the Mercoid case (Mercoid Corp. v. Minneapolis Honeywell Reg. Co.), 1944, 320 U.S. 680, 64 S.Ct. 278, 88 L.Ed. 396, as supporting the proposition that a patent is forfeited and the right to royalties destroyed by violation of the antitrust laws. In Morton Salt injunctive relief was denied because the license for the use of a patented machine required the purchase from the licensor for use in the machine of an unpatented article. No evidence was received to sustain a finding that the anti-trust laws had been violated. In Mercoid, although Mr. Justice Douglas wrote that injunctive relief should be denied the patentee because he had violated the anti-trust laws and therefore could not seek equitable relief, the four concurring justices it seems rested their decision on the Morton Salt case and not upon a finding of a violation of the Sherman Act. Hartford-Empire held that reasonable royalty licensing , rather than royalty free licensing was proper.

Nor do we interpret the provisions in the Alcoa decree, United States v. Aluminum Co. of America, D.C., S.D.N.Y. 1950, 91 F.Supp. 333, as a ruling contrary to the view that compulsory royalty free licensing is confiscatory. In that case, we find that Alcoa granted the Government royalty free licenses under three basic patents with the right to sublicense also on a royalty free basis. It was also provided Alcoa would receive a non-exclusive royalty free license under any improvement patents developed by the Government or its sub-licensees during the lifetime of the original patents. The decree struck down the grant-back provisions as being impediments to effective competition in the industry. This action, the Government urges as a precedent for the granting of royalty free licenses by decree of a trial court, for it is argued that the only consideration for- the original licensing was the grant-back provisions. However, we observe from study of the record and the decree, first, that the decree does not restrain Alcoa from exact *225 ing royalties from those other than the Government to whom it might grant licenses under these same patents in the future and, second, that the striking down of the grant-back provisions did not take from Alcoa its entire consideration and compensation for the licensing grants it had made to the Government. The grants were but part of an entire transaction by which Alcoa acquired from the Government valuable manufacturing facilities. These remained with Alcoa; thus, it was permitted to re-, tain at least part of the consideration for the licenses granted to the Government. We do not accept the Alcoa decree as establishing precedent for the granting of royalty free licenses.

We hold that in the circumstances before us, compulsory royalty free licensing may not be decreed in the absence of legislative authority and the sanction of explicit interpretation of existing statutes by higher courts affirmatively permitting such action.

An inventor may choose to keep his invention secret, and run the risk of its disclosure, or of having someone else conceive the same idea. 'He balances these chances; when he decides to make application for a patent, he determines to avoid them and to rest in the security of a patent which insures to him the privilege of excluding all others from the practice of the invention for 17 years. When he accepts the special privilege of a patent, he obligates himself to exercise his patent rights in conformity with the law. Misuse of these rights for an unlawful purpose subjects their further use to regulation and control; in this respect patent rights do not differ essentially in character from any other rights which the law creates or recognizes. The power of this court to provide “-further assurance against continued illegal restraints upon interstate and foreign commerce through misuse of these patent rights * * * throügh the compulsory granting to any applicant therefor of licenses at uniform, reasonable royalties under any or all patents defined in the decree”, was settled in National Lead, 332 U.S. at page 348, 67 S.Ct. at page 1648.

It was not required of the Government to present proof of specific damage or harm to any competitor as a result of the misuse of the patents by ICI and duPont. The misuse of patents effected a violation of anti-trust legislation; as such it was an offense against public policy and necessarily harmful to a substantial important public interest; “the suppression of competition in international trade is in and of itself a public injury; * * *.” National Lead, 63 F.Supp., at pages 513, 525.

We have found that the patents and processes agreements “did, in operation, result in restraints of United States trade.” (Op. p. 203) duPont agreed to restrict its use of United States patents by undertaking not to ship products manufactured under these patents to the territory assigned exclusively to ICI. To make this restriction effective, duPont was also required to impose li-ke limitations on the shipments of anyone whom it might license under its United States patents. Insofar as shipments to Great Britain, were concerned, the restrictions imposed by agreement were further implemented by the granting to ICI of exclusive licenses under the British counterparts of the United States patents. Thus, the exclusionary right under the British patents was applied against imports from the United States, and the basic understanding by which ICI recognized the United States as the exclusive territory of duPont was in turn observed by the granting of an exclusive license to duPont in the United States. This kept the patented products manufactured in the United States out of the market of Great Britain, and the like products manufactured in Great Britain out of the United States.

The agreement between ICI and duPont also" brought about a situation by which the United States patents of both were placed in the hands of duPont. This was a pooling of patents for a purpose in restraint of foreign trade. This use of patent fights was condemned in United States v. Line Material Co., 1948, 333 U.S. 287, 311, 68 S.Ct. 550, 92 L.Ed. 701, when employed as a means to effect price fixing arrangements. Line Material was, like the *226 instant suit, brought under Section 1 and neither monopoly nor domination was charged. We have held that when patents are pooled to carry out a division of territories, it is equally as unlawful as when they are unified to effect price fixing.

The remedy of compulsory licensing is not to be restricted to monopoly situations. An effect • of compulsory' licensing is to grant to- the public a right to use the patented invention and thus remove^ an impediment to competition. The wrong it'is designed to correct arises from the misuse of lawful patent rights pursuant to an unlawful agreement. Such misuse creates an extension of the patent monopoly. Here, we have had proof of a wrong — unlawful restraints on our trade — accomplished by agreement between ICI and duPont. It was made possible of performance by the voluntary abstention from trade by one in- the exclusive territory of the other, and the restrictive provisions in patent licenses and in technology exchanged. We may hope to compel an abandonment of limitations in the exchange of patents and technology which are used to violate the anti-trust laws only by decreeing that ICI and duPont grant to all others what they have heretofore granted to each other. It may be that the decree will permit them to make better and more profitable terms for the additional grants than they have heretofore demanded inter sese.

The result of these restrictions is shown in part by our later observations concerning polythene. It is acknowledged by ICI’s recent investment in Arnold, Hoffman & Company, Inc. of Rhode Island. We are now told that in 1949, ICI’s exports to the United States amounted to a little over $500,000. In I960 with the full force of devaluation, the figure rose to almost $5,-500,000 and in the first nine months of 1951 it stood at over $4,000,000. With a present investment in this company of $5,835,000 IOI contemplates making further loans. The gates shut on our foreign trade have been pried open by this litigation; compulsory licensing will serve to keep them open and promote the flow of foreign trade to and from the United States.

We have not made ineffectual the employment of the means ICI has acquired through its investments in Arnold, Hoffman to exploit its future inventions in the United ¡States. We note that this company’s present activities are confined principally to dyestuffs and insecticides; we leave incentive for its further development unimpaired by refusing to grant compulsory licensing of future patents and inventions, save in those cases where ICI is already under obligation to do so to others.

The provisions of the belated 1948 agreement eliminate all the patent barriers which might have prevented ICI from exporting patented products to the United States, but these provisions will do no more than tend to increase the competitive potential between ICI and duPont. We are also concerned with increasing th'e possibility of competition between ICI, duPont and others who might desire to enter the field. The unquestionable right of -IOI to determine whether or not it will manufacture under its American patents, to select its licenses, and to determine whether licenses granted shall be exclusive or non-exclusive, has been exercised to implement the allotment of territories. Compulsory licensing will be a cure and not a punishment for this.

It has been contended on duPont’s behalf that compulsory licensing should not be decreed because it would not “cause duPont to export and would not affect in any way the result of past failure on the part of duPont to export.” Perhaps this is so, and it leads us to observe that neither would a simple injunctive provision in the decree produce this result. But compulsory licensing will enable others to manufacture and put them in a position where they will be able to export. The application of this remedy might serve as an impetus to a sincere desire on duPont’s part to enter the export field on an active and competitive basis.

To us, it seems that an effective method to establish competitive conditions is to decree compulsory licensing of all patents which were licensed among the conspirators and which were put to use in the production of products which were common to some, if not tO' all. It has rightly been ob *227 served that “as long as the patentee is free to grant or withhold a patent license at his pleasure, the striking down of one set of restrictive conditions attached to a patent license may lead only to the adoption of another set of conditions which achieve the same effect.” Compulsory Patent Licensing, 56 Yale Law Journal, 1946, p. 82.

With the compulsory licensing provisions with respect to patents, there must follow similar licensing provisions with respect to know-how affecting these patents and the products made under them. This must be so because it has been found that the exchange of know-how — as well as that of patents — served as a direct means for the accomplishment of the unlawful restraints; and because the supplying of such know-how and technology is necessary to the efficient use of the licensed patents and to the production by the licensee of products comparable in quality and cost of'production to that of the licensor. The Government has asked that the compulsory licensing of know-how and technology be extended to include all “usable” processes — those processes now being used and applied and those which have been found to be of possible use but which are not currently being applied. The objection to the inclusion of “usable” processes because of difficulties in. ferreting out those processes which have been tried only to be abandoned, and those known to be possible but never used, seems to us more fanciful than real. We have been impressed by the evidence throughout that the defendants function as extremely efficient and competently managed industrial organizations. The records of these “usable” processes will be available to them for disclosure; and it will be so decreed.

We have had evidence of three instances when United States manufacturers were denied licensing of ICI’s United States patents because of the intervention and objection of duPont. At trial we deemed these facts to be significant as tending to establish the allocation of the United States as territory to be served exclusively by duPont. Now, we regard them important as indicative of ICI’s undertaking not to exploit its United States patents save through duPont, or by anyone else without the consent of duPont. This was suppressing and controlling competition within the United'States in those products which might have been manufactured under United States patents held by ICI. Accomplished as it was by mutual undertaking in restraint of trade, it was an abuse of the United States patent rights held by ICI ap'd indicates .the necessity for regulation of the- exercise of ICI patent rights.

As to those United States patents owned by ICI which have -been voluntarily licensed to others than duPont and on terms no less favorable, there is no present need for compulsory licensing. The patents which have been licensed to and used only by duPont have been subjected to the restraints placed upon exports of products manufactured by them; to remove the probability of future restraints and to correct the effect of past abuse as to these, compulsory licensing must be decreed. ICI owns United States patents whidh have not been licensed either to duPont or others and which ICI itself has not employed in products manufactured here or manufactured elsewhere ’ and imported to the United States. These must also be brought within' the ambit of the compulsory licensing provisions of the decree. Here, too, the provisions will be limited to existing patents as we have defined them.

Provision in the decree for compulsory licensing on a reasonable royalty basis does not present an insurmountable obstacle, even though a number of patents may be involved. Difficult and time-consuming problems may be created in determining the royalties, but the answers are there and may be ascertained; difficulties to be encountered in finding these answers do not justify denial of the relief which the established facts require.

At least as to polythene and nylon, we have some standards as to reasonable royalties. While it is true that as to them question might well be raised as to- whether they were arrived at after arm’s length commercial negotiations, they do nevertheless furnish guide posts for future determination of the amount at which such roy *228 alties should be set. 'But, in any event, as to these products and all others, there is also available for judicial finding the sum a prudent licensee would pay under all existing circumstances.

We shall not, however, include in our decree the provision proposed by the Government which purports to limit recoveries in a suit brought against an infringer to reasonable royalties. Such a provision would encourage infringement.

The provisions for fixation of reasonable royalties will follow substantially the provisions in anti-trust suits in which similar relief has been decreed and approved by the Supreme Court, National Lead, Gypsum, and Line Material cases. The royalties are to be determined by the court, when agreement has not been privately reached, on petition from the applicant and on proof submitted by the applicant and the defendant involved.

The Government does not seek a decree directing ICI to grant compulsory licenses of its British patents. The Government requests that ICI be required to grant immunity under its foreign patents which correspond to the United States patents which we have made subject to compulsory licensing. Such a provision was included in paragraph “7” of the final decree in National Lead, 63 F.Supp., 495, 534, and left undisturbed by the Supreme Court. We have had testimony offered on behalf of ICI by an expert in British law that a provision for granting immunities is contrary to British public policy and that a British court will not enforce such a provision in the judgment of a court of a foreign jurisdiction. As to this, -we observe that, acting on the basis of our jurisdiction in personam, we are merely directing ICI to refrain from asserting rights which it may have in Britain, since the enforcement of those rights will serve to continue the effects of wrongful acts it has committed within the United States affecting the foreign trade of the United States.

We are not unmindful that under British law there are restrictions upon exports from the United States by reason of the existence of the British patents owned by ICI. The exclusion of unlicensed imports and the prohibition of unlicensed sales is enforceable because of the legal rights which attach to a British patent.

We accept as correct the statements in the brief of ICI that: “Under United States law if a product is patented, sale into the United States of that product constitutes clear infringement of the rights of the American patentee. Such sale will therefore subject the vendor to a suit for infringement even though his acquisition of the patented article abroad (and his use and sale of it there) may be wholly lawful. Boesch v. Graff, 1890,