I have heard that in times of war, intellectual property may be seized to support the war effort. Is that going to happen to Russia?
Vodka (and Ukraine) Lover
Yes, war can be a messy affair, and that extends all the way to intellectual property rights.
During World War I (the “War to End All Wars”, how’s that working out for humankind?), the United States seized German patents and trademarks. The government established the Office of Alien Property Custodian. By Executive Order 2729-A under the Trading with the Enemy Act of 1917 (12 U.S.C. § 95 and 50 U.S.C. § 4301 et seq.), President Woodrow Wilson set up a system that confiscated the property (physical items, currency, and intellectual property) and later sold off that property to US buyers.
Among the seized items in WWI were the rights to “Aspirin” (a patented formula and trademarked form of acetylsalicylic acid), and “Heroin” (a refined form of opium that was trademarked). Both trademarks soon fell into use as generics, meaning that they no longer had any exclusive connotation for a product of Bayer AG, the German company that had owned them. By late 1918, the Custodian reported that he was managing 30,000 trusts with assets worth half a billion dollars. He estimated that another 9,000 trusts worth $300,000,000 still needed to be evaluated.
The assets of the Orenstein & Koppel Company, a German engineering firm; the Bosch Magneto Company; the Hamburg-American Shipping Line; the German-American Lumber Company; the New York Evening Mail; as well as twenty German insurance companies were seized. In April 1919, the government transferred 4,500 German chemical patents valued at $8 million to the Chemical Foundation, which paid only $250,000 for the rights; the Chemical Foundation then licensed many of these patents to American companies at below market rates, thus jumpstarting a prosperous industry.
A government seizure also benefited the Eastman-Kodak Company. In a 1905 settlement of a patent lawsuit, Kodak paid royalties to ANSCO for flexible film. ANSCO went on to merge with AGFA, a German company owned by Bayer and IG Farben in 1928. The merged company again posed a competitive threat to Kodak. At the start of WWII, the government seized the assets of the company, now known as General Aniline and Film (GAF). During the seizure, which lasted until the mid-1960s, GAF was prevented from enforcing its rights, and by the time it was sold off, Kodak dominated the US market. AGFA was never again a serious factor in the US.
On May 13, 1966, President Lyndon B. Johnson issued Executive Order 11281 which abolished the Office of Alien Property Custodian (in the guise of its successor, the Department of Justice Office of Alien Property) effective June 30 of that year.
There is one type of seizure that every inventor dreads: a secrecy order. Each application filed is examined by the Patent Office to see if it contains important national security information. The Invention Secrecy Act of 1951 requires the government to impose secrecy orders on patent applications that contain sensitive information, thereby restricting disclosure of the invention and withholding the grant of a patent. This requirement can be imposed even when the invention is entirely owned by a private individual or company without government sponsorship or support. There are several types of secrecy orders which range in severity from simple prohibitions on export (but allowing other disclosure for legitimate business purposes) up to classification, requiring secure storage of the application and prohibition of all disclosure. At the end of 2021, there were 5,976 secrecy orders in effect – that’s nearly 6,000 inventions that will likely never see the light of day or earn their inventors any money!
Now, as to Russia and whether the United States or other nations might seize Russian intellectual property, the “Doc” has no idea, but he has seen Russian vodka poured down sewer grates as a private act of protest to support Ukraine. The “Doc” thinks that this is futile, but sometimes futile symbolism is important and is good for the soul.
Do you have an invention, or other intellectual property that needs protecting? Might it be important to national security or might it be Russian? Give the attorneys at LW&H a call. They can help.
Until next month,
— Lawrence A. Husick, Esq.