Contributions of the Office of Alien Property Custodian to Chemical Research' DEXTER NORTH Division of Patent Administration, Alien Property Custodian, Washington, D. C.
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HE OFFICE of the Alien Property Custodian, in the short period of time since its creation in March, 1942, has stimulated research in the chemical industries, and supplied useful tools for carrying on this research. These contributions have been through the medium of three different instrumentalities: the many patents which the Custodian has vested, the vested corporations, and the reproduction of foreign scientific and technical periodicals and books. Each of these activities merits separate discussion. With respect to the seized patents, some background information concerning them will be helpful to a more complete understanding of the many ways in which the Custodian has aided or contemplates aiding chemical research. As of July 12, 1943, the Alien Property Custodian bas vested 41,581 patents and patent applications of enemy aliens, and nationals of occupied countries, or over three times the number seized in World War I. This total is divided as follows:
by these inventions, and assisting in the development of new production techniques for a sound business in a postwar world. What greater challenge could be given to American industry by this wealth of inventions and disclosures than to make use of the best ones for the war effortand for the postwar period? It is gratifying, therefore, to report that many chemical firms are studying these patents with the view to applying for licenses. The character of the patents under which licenses have been granted in chemical and related fields is of interest as indicative that research is frequently necessary for their commercial exploitation. Interesting patents which have been licensed include those relating to a tin refining process, manufacture of alumina from clay, fibers derived from milk protein bases, rust and corrosion inhibitors, production of acetylene and ethylene from hydrocarbons, synthetic resin molding compositions, production of polymerization products, high tensile rayon, moth-, water-, rot-, and fireproofing of textiles, ion exchange resins, processing of tall oil, wetEnemy.. ............. .26,00l patents-3440 applications ting, penetrating and washing compounds, production I!nemyrrcupied.. . . . . . . l0.8GO patenrcl2R0 applications -. ... of hydrocarbons, alloys, precision lenses, cement procTotal.. . . . . . . . . . . . . . . 36,Plil patents4720 applications esses or equipment, and numerous others. Although Included in the applications are 264 cases vested after the identity of the licensees may not be disclosed, there they became abandoned, and some which have sub- is an almost equal distribution in the chemical and procsequently been divested. These holdings, representing ess industries, between large, medium, and small manuover 6 per cent of all unexpired or "live" United facturers. The licensing rate of $15 per patent is so States patents, constitute the largest number of United cheap that many firms are applying for hundreds of States patents nnder one control. They include in- patents to develop. As of Angust 20, 1943, the total ventions of leading scientists and technicians of Europe, number of license applications received was 482, coverand cover virtually every field of invention. Perhaps ing 9837 patents and patent applications. As of the 20 per cent of them relate to the chemical and so-called same date, the number of licenses issued was 156, covprocess industries. Among them are many inventions ering 574 patents and patent applications. In both pertaining to plastics, elastomers, synthetic fibers, instances, however, some duplication exists in the coatings, hydrocarbon chemicals, textile chemicals and number of patents involved. Let us consider the steps which the Custodian has processing, metallurgy including ferrous and nonferrous alloys, and photography. Of unusual interest might taken to stimulate research for the exploitation of the be mentioned the Italian patent applications on pro- patents which he holds in trust for the American people. duction of artificial fibers from casein; German pat- He has established a licensing policy and program to ents on hydrocarbon chemicals and on alloys; and the make these patents available to any manufacturers who Krupp patents on tungsten carbide which have only can use these inventions productively. The general recenffy been assigned to the Custodian by the General terms nnder which licenses will be granted are: 1. Under enemy patents and patent applications Electric Company. not already exclusively licensed, licenses will The patents were seized for the threefold purpose of be nonexclusive, royalty free for the life of the increasingthe etfectiveness of our war production, stimupatents. lating basic and applied research in the fields covered 2. Under patents and patent applications belonging ' Presented before the Division of Chemical Education of the to nationals of enemy-occnpied countries, not American Chemical Sadety, 106th meeting, Pittsburgh Pennalready exclusively licensed, nonexclusive lis~lvania,September 7. 1943. 605
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censes will be granted for the l i e of the patent. When no license is already outstanding, new licenses will be royalty free for the duration of the war and six months thereafter, and then subject to reasonable royalties. When nonexclusive royalty-bearing licenses are already in effect, new licenses issued by the Custodian will carry, for the life of the patent, the same royalty terms as the licenses already outstanding. 3. Existing exclusive licenses under all vested patents will be maintained except where the public interest or the needs of the licensee may require the revision of agreements. 4. Each licensee, unless operating under a war secrecy agreement, will report periodically to the Custodian, on the extent of his use of the patent. Discussion of the Custodian's patent policy is not withii the scope of this paper, except as it affects research. Objections have been made that the nonexclusive licensing feature offers no incentive to venture capital and consequently to the research which accompanies such investments. Our experience thus far has been that applicants for exclusive licenses have been in most cases willing to take nonexclusive licenses or that other concerns working in the same field have come forward to take nonexclusive licenses. Furthermore, improvement patents accrue to the benefit of the licensee. Where an exclusive license is granted, none but the licensee has much incentive to develop improvements, and research tends to become channelized into narrower fieldsthan would otherwise be the case. Again as the technique in one field may have potentially valuable applications in other apparently unrelated fields, the limiting effect of an exclusive license is thus removed. Unlike commercial owners of patents, the Custodian is less interested in the financial gain to be made from his patents than in putting them to work and in encouraging the maximum number of different improvements and applications. Illustrative of potentialities in nonexclnsive licensing is the seizure of four Raschig patents on manufacture of chlorobenzeue and synthetic phenol. The previous licensee has selected to replace his exclusive license with a nonexclusive royalty-free license. In addition to these four patents,= the Custodian has obtained rights to sublicense others under two additional patents' owned by the original licensee. Thus the important Raschig process can now be made available to others for improvement and development. This should result in greater postwar progress in phenol and plastics. A similar situation exists with respect to the famous Krupp hard carbide patents4 assigned to the Custodian by the General Electric Company, former exclusive licensee. Steps have been taken, and will continue to be taken, to acquaint the public and industry in particular with
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' U. S. Patents 1,963,761, 1,964,768,2,035,917, and 2,158,402. a
U. S. Patents 2,031,179 and 2,009,023,
the nature of these patents, by means of publication of catalogs and abstracts, exhibits and talks a t professional and technical meetings and conventions, and publicity in the technical and lay press. Many of yon have seen our catalog listing titles of the vested patents and applications by Patent Office classifications. More than 3000 complete sets and 5000 sections have been sold, a demand far in excess of original expectations. Subscribers to the complete catalog include many of the best known large manufacturers and libraries, and to sections of the catalog, many small firms, patent attorneys, and individuals. For the first time in our patent history, we have made available specifications of pending patent applications. Such material has never before been accessible except to the applicants and their attorneys. About 4700 specifications, of which about 1200 are in chemical and allied fields, and excluding those subject to secrecy orders, have been printed and can be purchased from the Patent Office in the same manner and for the same price as copies of patents. The titles of these applications have been printed in various issues of the Oficial Gazette of the United States Patent Ofice, from April 30 through July 13, as well as in our catalog. In more than 3000 instances powers to inspect the otherwise confidential Patent Office records relating to these cases have been granted to researchers, thus materially hastening dissemination of valuable knowledge not previously available to science and industry. Of further interest are our plans to make available patent applications of enemy aliens and nationals of occupied countries not yet filed with the Patent Office, and also those which have been filed and have become abandoned. The unfiled patent applications have been received pursuant to the Custodian's General Order No. 12, which requires reporting of all such material received from abroad on or after January 1, 1939. The number of applications reported to the Custodian is about 11,000, of which about 400 have been vested so far. A systematic search has been initiated of the abandoned patent applications of enemy aliens and nationals of occupied countries, primarily to seek disclosures useful in the war effort. Although most of these cases were abandoned for lack of invention, nevertheless some of the disclosures may be of untold value. Consideration is now being given to procedure for making both unfiled and abandoned patent applications available to industry, subject, of course, to withholding those which might aid our enemies.
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In addition to the above patents, the Custodian has vested a number of other hard metal composition patents from alien enemies, as follows: 1,800,122, 1,847,617. 1,740,009, 1,829,950, 1,864,567, 1,855,994. 1,742.417, 1,992,372, 2.056.708, 1,803,832, 2,018.752, 2,116,399, 1,811,068, 2,116,400, 1,840,457, 2,121,448. He has also vested the fallowing nonenemy patents in this field: 2,027,763. 2,042,684, 2,093,656.
Although many of the patents may be of little or no the files of certain vested corporations which are now value, either because they will not work, or because inactive or are patent holding companies. We are also they are unsuited to our raw materials economy or our giving thought to methods by which licensees may remarkets for the products, it would be indeed surprising coup research expenses incurred for development purif they did not contain a good measure of extremely poses. valuable inventions. You may recall that after the The second major field of activity in which the Cuslast war, the value of the synthetic methanol patents todian has been able to make contributions to chemical which had been seized from Germany was not realized research concerns the corporations which he has vested here until about 1925. How much more difficult the in whole or in part. The general policy of the Custotask is today to single out the valuable patents from dian with respect to patents owned by such corporathe many times greater number available than a genera- tions will be to permit them, as operating units, to retain and continue their own management of those tion ago! Thus, the very magnitude of the Custodian's patent patents which are necessary to and essential in their holdings, and the fact that titles of patents are fre- business, and to permit their own managements to adquently so general, or even sometimes misleading, has minister other patents which the corporations may own, created a demand for a short cut or tool whereby the in accordance with the broad policies approved by the immense task of examining large numbers of patents Custodian. For example, the Schering Corporation to select those of real value for licensing purposes may recently issued a list of 188 of its patents available for be reduced to a minimum. A project has therefore licensing, in the following fields: substitutes for insulin been undertaken for abstracting all the patents and electroplating, synthetic menthol, thymol, and camphor, patent applications in chemical and allied fields, which insecticides, photography, cellulose acetates, and a should be completed before many months. This proj- miscellaneous classification. ect was of such magnitude that it became necessary to Some of the vested corporations formerly depended seek outside assistance. The Custodian was indeed wholly or in large part for their research upon their fortunate in securing the active cooperation of the Chi- former parent foreign companies. As our entry into cago Section of the American Chemical Society for the war completely cut off these facilities, i t became this purpose. Under the able chairmanship of Dr. H. necessary for these companies to establish their own H. Young, a committee of some 100 members was or- research organizations. The Custodian has encouraged ganized to abstract these patents, each member re- such steps, and where necessary has removed foreign ceiving assignments in his own specialized field. These influences in these corporations. Of particular interest abstracts will be classified by fields of interest, in the to chemists are the steps taken by General Aniline and scheme and indexing of which valuable cooperation is Film Corporation, largest chemical company vested by being given by a committee from the Special Libraries the Custodian, and formerly controlled by the German Association. Publication of these abstracts will permit I. G., to provide its own research facilities. These are quick identification of any patent bearing upon a par- best described by quoting excerpts from the company's ticular product, process, or use. most recent annual report. Patents in other fields of interest, such as mechanical "The Company has established a Research Division which and electrical, may possibly be published in condensed form consisting of the drawings and typical claims given comprises the Research Laboratory, Market Development Deand Patent Department. This Division will include in the Oficial Gazette of the United States Patent Ofice, partment, among its responsibilities the operation of experimental and pilot Because of the complexity of the fields of interest cov- plants leading to the inauguration of commercial production. ered by the nonchemical patents, groupings would be "A Central Research Laboratory has been established with an initial staff . . . of about 100.. . . Smaller research groups are by Patent Office classifications. In order to acquaint the chemical industries with the being maintained at the various plants with the main functions of bringing new products into commercial production and carryextent and nature of his patent holdings, the Custodian ing on researches requiring close association with the operating has held exhibits of the actual copies of patents ,in management. "A Market Development Department has been organized. . . chemical and allied fields a t the National Chemical Exposition in Chicago last November, a t the April for the purpose of seeking profitable outlets for the products by the research laboratories and keeping the research meeting of the American Chemical Society in Detroit, developed staff informed of the unfilled needs of industry at large. and now a t this meeting of the Society. Similar exhi". . . a Patent Department was established in 1942. . . . bits in other fields of interest have been held in other The prompt development of . . . the Company's patents through cities. For the convenience of the public, there have further research will comprise a major activity and may be been assembled in the Chicago, Washington, and New expected to require substantial expenditures. Such development has already resulted in bringing to the point of commercial York officesof the Custodian copies of all vested patents production a synthetic substitute for mica which is currently a and patent applications, arranged by patent office classes strategic material of great importance. Also several new organic plastics are undergoing semicommercial trials as suband subclasses to facilitate searches in s~ecific fields. Consideration is being given to other means of stimu- stitutes for rubber and as components for use with synthetic lating research relating to the vested patents. One rubber. "Certain dyes of special application to the war program and plan now under discussion involves makiig available not now obtainable are under investigation and 'should become much "know-how" and other technical information in quickly available. Rigorous demands of the military services
for superior quality a m , particularly color film, are stimulating
widely used and is now being adapted to similar treatments of other im~ortantwar materials. Studies are being made of the Lurgi coal process. The previous dependency of the Schering Corpora- A plant, built under these patents, has for a number of tion for research on the former German parent company years been successfully operating on lignite coal in is being remedied by the erection of a new biological North Dakota. Experiments are now under way looklaboratory, conversion of existing space to chemical ing to the utilization of this process in producing a research, expansion of the research staff, undertaking smokelessfuel and important acid oils from Utah coal. of numerous clinical projeds, and active participation A series of protein condensate products, known as in war research projects sponsored by the Committee on Lamepons,%e being marketed by one of the companies Medical Research of the National Research Council. and arrangements have been made with a research Relations are being established with many public health laboratory to develop new uses for these materials, as agencies of Latin-American countries to determine well as improvements in manufacture. The Lamepons what problems may confront them in the future. Stud- are important in the textile field as detergents, and in a ies are being made of problems which may arise in this refined form are finding uses in the cosmetic field in country from introduction of tropical diseases and other shampoos and shaving creams. They also have poshealth conditions when our men return from overseas. sibilities for salt water soap. Extensive studies are being made in the field of horResearch has also been undertaken with regard to mones. certain patents on powder metallurgy7 and license conIn the case of two other vested companies, active tracts in this field are pending with several mauuwork is under way looking to the development of sev- facturers. eral patented products or processes. 8Lamepon is covered by the following U. S. Patents: The Waelz6process for the recovery of zinc has been 2,015,912, 2,100,090, 2,119,872, 2,137,310, 2,144,824, 2,151,241. development in this field."
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U. S. Patents 1,618,204, 1,705,128, 1,728,681, 1,754,170. 1,755,712, 1,762,867, 1,921,825. 6
2,210,595, 2,260,123. U. S. Patents: 2,151,599. 2,217,569, 2,287.082, 2,291,865. 2,304,130, 2,305,172, 2,306,449.
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