expenses of such prosecution shall be paid out of the appropriation for the expenses of the courts of the United States. Commission to straint of trade, tional enhance ening of compe tion. Whenever the Federal Trade Commission shall have Federal Trade reason to believe that an association or any agreement investigate remade or act done by such association is in restraint of artificial or intentrade within the United States or in restraint of the ex- ment or depression of prices or port trade of any domestic competitor of such association, substantial lessor that an association either in the United States or else- tition by associawhere has entered into any agreement, understanding, or conspiracy, or done any act which artificially or intentionally enhances or depresses prices within the United States of commodities of the class exported by such association, or which substantially lessens competition within the United States or otherwise restrains trade therein, it shall summon such association, its officers, and agents to appear before it, and thereafter conduct an investigation into the alleged violations of law. Upon investigation, May recomif it shall conclude that the law has been violated, it may ment in case of make to such association recommendations for the readjustment of its business, in order that it may thereafter maintain its organization and mangement and conduct its business in accordance with law. If such association fails. To refer find ings and recom. to comply with the recommendations of the Federal Trade mendations to Commission, said commission shall refer its findings and if association fails recommendations to the Attorney General of the United recommendation. States for such action thereon as he may deem proper. mend readjust violation. Attorney General to comply with Commission given same powers as under Federal Trade ComAct SO For the purpose of enforcing these provisions the Federal Trade Commission shall have all the powers, so far as applicable, given it in "An Act to create a Federal mission Trade Commission, to define its powers and duties, and for other purposes." 35 Approved, April 10, 1918. IN GENERAL. Act referred to in opinion in United States v. United States Steel Corporation, March 1, 1920, 251 U. S. 417, 453, 64 L. Ed. 343, 354, 40 Sup. Ct. 293, 300, in de See ante, p. 439 et seq. ciding suit to dissolve United far as applicable. APPENDIX II. DECISIONS OF THE COURTS ON PETITIONS TO ENFORCE OR REVIEW THE ORDERS OF THE COMMISSION OR TO ENJOIN IT FROM PROCEEDING.1 UNITED STATES v. BASIC PRODUCTS CO. (District Court, W. D. Pennsylvania. September 9, 1919.) No. 2214. 1. UNITED STATES KEY No. 97-CAN NOT APPROPRIATE PATENT WITHOUT COMPENSATION. There is no reservation in the patent laws of right in the United States as against the inventor, and it can not appropriate or use the invention without just compensation in any different way than it can appropriate or use any other article owned by a private citizen. 2. COMMERCE KEY No. 48-FEDERAL TRADE COMMISSION CREATED UNDER POWER TO REGULATE INTERSTATE AND FOREIGN COMMERCE. The Federal Trade Commission Act (Comp. St., pars. 8836a8836k) was enacted by Congress in the exercise of its constitutional power to regulate interstate and foreign commerce. 1 With the exception of two cases, the period covered is from July 1 1920, to June 30, 1921. The two exceptions referred to are the case of the Basic Products Co. and the case of the Maynard Coal Co. (see p. 555, infra, for latter case), printed in full at this time as a matter of convenfence because not heretofore so included in the Commission's Reports. Decisions on petitions to review handed down before the period above referred to will be found in Appendix II of Vol. II of the Commission's decisions. Cases in which injunctions have been sought to restrain the Commission from proceeding under sec. 5 or in which it has been sought to defeat such a proceeding by appealing for a writ of certiorari to review the action of the Commission in denying motions to dismiss the proceeding for lack of jurisdiction, as of this writing (Oct. 15, 1921) are as follows: By injunction-Federal Trade Commission v. Nulomoline Co., in which the Circuit Court of Appeals for the Second Circuit on August 16, 1918, refused to interfere with the Commission's taking testimony, on the ground that the Commission's order requiring the same was interlocutory (memorandum opinion in 254 Fed. 988); T. C. Hurst & Son v. Federal Trade Commission, decided August 2, 1920, in the District Court for the Eastern District of Virginia (268 Fed. 874; see p. 565, infra), and Butterick Co. et al. v. Federal Trade Commission, in which the bills of four respondents in a proceeding before the Commission (Dock. 594) to enjoin the Commission from proceeding under sec. 5 were dismissed by 542 3. COMMERCE KEY No. 57-TRADE-MARKS AND TRADE NAMES KEY No. 80, NEW, VOL. 8A KEY NO. SERIES-POWERS OF FEDERAL TRADE COMMISSION WHERE INTERSTATE COMMERCE OR UNFAIR TRADE ARE NOT INVOLVED. The Federal Trade Commission held without power to demand access to the books and papers of a corporation which manufactured a patent article by secret process, not alleged to be engaged in interstate or foreign commerce, nor charged with unfair competition, for the purpose of obtaining information for the Navy Department as to the cost of manufacture, annual production, capital invested, etc. 4. MANDAMUS KEY NO. 10-RIGHT TO DEMAND AND DUTY TO PERFORM NECESSARY. Mandamus issues where, and only where, there is a right to demand, and a corresponding duty to perform, the act required. (The syllabus is taken from 260 Fed. 472.) At Law. Mandamus by the United States against the Basic Products Co. On demurrer to answer. Overruled. R. L. Crawford, United States district attorney, of Pittsburgh, Pa. Reed, Smith, Shaw & Beal, of Pittsburgh, Pa., for defendant. ORR, District Judge: To a petition filed by the Attorney General of the United States, at the request of the Federal Trade Commission, for a writ of mandamus upon the Basic Products Co., the latter has made answer at considerable length. the Supreme Court of the District of Columbia on August 12, 1921 (no opinion), and in which case an appeal has been taken to the Court of Appeals of the District. On writ of certiorari-Minneapolis Chamber of Commerce et al. v. Federal Trade Commission, in which respondents in a proceeding before the Commission (Dock. 694) appealed to the Court of Appeals of the Eighth Circuit for writ of certiorari to review the Commission's action in denying motions to dismiss based on lack of jurisdiction, and which is pending in that court. Cases in which injunctions have been sought to restrain the Commission from enforcing compliance with requests made under sec. 6 of the Federal Trade Commission Act, or in which mandamus proceedings have been instituted at the request of the Commission to enforce compliance with a request made under said section, are as follows: Injunctions Maynard Coal Co. v. Federal Trade Commission, in which the Supreme Court of the District of Columbia on April 19, 1920, granted a preliminary injunction (see p. 555, infra), now awaiting trial, and Claire Furnace Co. et al. v. Federal Trade Commission, in which the same court on June 19, 1920, likewise granted a preliminary injunction (no opinion) and which is likewise awaiting trial. Mandamus proceedings-United States v. Bethlehem Steel Co., petition filed June 4, 1920, in the District Court for the Eastern District of Pennsylvania, and United States v. Republic Iron and Steel Co., petition filed June 7, 1920, in the District Court for the District of New Jersey, proceedings in both of which cases were stayed by the injunction secured in the Claire Furnace case, in which the two defendants in the mandamus proceedings were among the petitioners, and which proceedings consequently awalt decision of that case, To that answer the plaintiff has demurred. It is upon the demurrer that this case is now before the court. While all the material averments of the answer, which are well pleaded, must be taken as true, yet the important questions in the case can not be clearly outlined without reference to the petition as well, and without a statement of the particular grounds upon which the demurrer is based. The court therefore sets forth the substance of the pleadings, with quotations from the same, and with the use of italics where deemed proper for special emphasis. With respect to the petition, it is to be noticed: That there is no averment of any facts which show that the defendant is engaged in interstate commerce. The recital in the resolution of the Federal Trade Commission, which is hereinafter set forth, is not such averment. The petition sets forth that on the 8th day of March, 1917, the Federal Trade Commission passed a resolution, and on the 11th of March following caused notice thereof and its demand in pursuance thereof to be served on the defendant, which notice and demand are both set forth at length in the petition. They are embodied in one paper duly executed by the Federal Trade Commission. The part of said paper which contains the notice recites the date of the passage of the resolution as aforesaid, that it was passed at a regular session of said Commission, and contains the resolution itself, which is as follows: Resolved, That pursuant to the provisions of subdivision (a) of section 6 of the act of Congress entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914, the Commission proceed forthwith to gather and compile information concerning, and investigate the organization, business, conduct, practices, and management of the Basic Products Co., a corporation engaged in interstate commerce, and the relation of said Basic Products Co. to other corporations, individuals, associations, and partnerships: And be it further Resolved, That pursuant to the provisions of section 9 of said act of September 26, 1914, L. W. Plowman and H. L. Maxey are hereby designated as duly authorized agents of the Federal Trade Commission to examine and copy any and all documentary evidence of whatsoever character concerning the organization, business, conduct, practices, and management of said Basic Products Co., and its relation to other corporations, individuals, associations, and partnerships: And be it further Resolved, That a copy of this resolution be served on the said Basic Products Co., with a demand on behalf of the Federal Trade Commission that the said L. W. Plowman and H. L Maxey, its agents, be permitted access to the books, papers, records, memoranda, and data of the said Basic Products Co. for the purpose of carrying out the direction of this resolution. The part of that paper containing the demand is as follows: Pursuant to the terms of said resolution the Federal Trade Commission hereby formally demands of you an opportunity to examine any documentary evidence in your possession which relates to the organization, business, conduct, practices, and management of said Basic Products Co., a corporation, and its relation to other corporations and to individuals, associations, and partnerships, in order that copies may be made of any portions of said documentary evidence as appear to be relevant to the subject matter of said investigation. The said Federal Trade Commission, by its duly authorized agents, viz, L. W. Plowman and H. L. Maxey, presents itself for the purpose of examination and making copies, if deemed advisable, of any documentary evidence within your possession or control and which relates to the above-entitled investigation now being conducted by it. In particular, the Federal Trade Commission demands that it be permitted to examine and take copies, if deemed advisable, of all documentary evidence which relates to the production costs, annual production, and capital investment in the manufacturing of a commodity known as “Syndolag." The petition further avers that, upon the service of said notice and demand certain examiners, duly authorized by the Commission, presented themselves within the usual business hours at the office of the defendant in Pittsburgh for the purpose of examination and making copies, if deemed advisable, of any documentary evidence within the possession and control of said defendant, which related to the investigation then being conducted by said Commission, as aforesaid, and particularly of such documentary evidence which related to the production costs, annual production, and capital investment in the manufacturing by defendant of a commodity known as “Syndolag"; but said defendant wholly failed and refused and still fails and refuses to permit said representatives of the Commission to examine said documentary evidence and make copies of same. The petition concludes with a prayer for a writ of mandamus. The answer to said petition avers: (1) That the defendant is the manufacturer of a patented article known as Syndolag," which has been developed by the defendant after great expenditure of time and money, and which, among its other uses, is widely sold by defendant for repairing the bottoms of open-hearth steel furnaces, a purpose for which heretofore only imported Austrian magnesite could be used. Not only is the article patented but in the production thereof the defendant has developed certain refinements of method which are and have been kept secret by defendant and which constitute trade secrets of great value, as are also the cost accounts relating to the production of such article. (2) On or about September 4, 1918, the Navy Department of the United States ordered from defendant 250 tons of Syndolag, for which defendant quoted a price of $35 per ton, which was then the usual and ordinary price, but the Navy Department refused to agree to such price, and required such material to be billed at the tentative price of $30 per ton. Pursuant to such order the defendant shipped to the said department 64.9 tons of said ma 74636-22-35 |