appeals of the second circuit, reversing 149 Fed. 933, sustained a complaint which alleged a combination of ship owners to prevent competition between members by maintaining uniform freight rates in South African trade.

It is also immaterial that one of the constituents in a combination of this country is a foreign corporation doing business in this country. In the American Tobacco case, the supreme court held that the circuit court erred in dismissing as to the English companies, which were connected by inter-corporate holdings with the combination in restraint of trade organized in this country.

§ 452. Patent monopoly not within the act.-In Bement v. New York Harrow Co., 186 U. S. p. 76, 46 L. Ed. 1058 (1902), the supreme court said that the object of the patent laws was a monoply, and that the rule was, with few exceptions, that any conditions which were not in their nature illegal with regard to the kind of property imposed by the patentee and agreed to by the licensee for the right to manufacture, or use, or sell the article, will be upheld by the courts; and the fact that the conditions of the contract keep up a monopoly, does not render them illegal.

This principle has been applied in several cases. Thus, in Bubber Tire Wheel Co. v. Milwaukee Rubber Works, in the seventh circuit, the court of appeals, 154 Fed. 358 (1907), reversed the circuit court of Wisconsin in 142 Fed. 331, and held that licenses which were granted by the owner of the patent under an agreement that the licensee should sell the patented article only at prices fixed by the agreement, and restricting the production of the licensee, were valid, the court saying that patented articles unless and until they are released by the owner of the patent from his monopoly, are not articles of trade or commerce among the several states within the meaning of the act, and that provisions in the licenses for the accumulation of a fund for the suppression of competition did not render the licenses invalid.

In the case of Indiana Mfg. Co. v. Case Threshing Machine Co., 154 Fed. p. 365 (1907), the same court, reversing the circuit court of Wisconsin, 148 Fed. 21, held that a contract by a patentee granting licenses to manufacturers to pay complainants a roy

alty and giving them a right to use invention thereafter acquired by complainant, was not in violation of the act.

In Virtou v. Creamery Package Mfg. Co., it was held by the court of appeals of the eighth circuit, 179 Fed. 115 (1910), that the fact that the owner of a patent was party to an illegal combination in restraint of trade did not deprive him of the right to sue for infringement of his patent, and that the owner of patent could lawfully notify infringers or persons believed to be such of his claims and warn them that suit would be bought to protect his legal rights where he acted in good faith. It was held in this case that a contract which one company made with another, to be its sole agent for the sale of its products, was not in violation of the act, as the effect of interstate commerce was only incidental.

As a patentee still remains the owner of his patent after granting a license, a modification of the licenses between the owners and the various licensees regulating the manufacture and sale of the patented product, is not objectionable as a restraint of trade. Gosher Rubber Works v. Single Tube Tire Co., United States court of appeals, seventh circuit, 166 Fed. 431 (1908).

A modification of the broad principle asserted in the cases above noted, was discussed by the circuit court of Massachusetts in Blount Mfg. Co. v. Yale & Town Mfg. Co., 166 Fed. 555 (1909), where it was said that while a sale or license of a patented article with a covenant not to compete made as an ordinary incident to enhance the value of the thing conveyed was not within the anti-trust act, and where it went beyond this and sought to enhance the price by removal of competition under a general plan to regulate and control the business and dealing in interstate commerce, including the maintenance of the price and the pooling of profits and the elimination of competition and restraint of improvements, it did violate the anti-trust act; and a bill filed to enforce such a contract was held to be had on demurrer. See § 86, supra.

§ 453. Secret formula contracts under the act.-In Dr. Miles Medical Co. v. John D. Parks & Sons Company, 220 U. S. 373, 55 L. Ed. (1911), the supreme court, Justice Holmes dissenting, held that a restraint of trade, which would be unlawful as to the other manufactured articles cannot be justified, because the article in question is a proprietary medicine made

under a secret formula, and that contracts between a manufacturer and all dealers, whom he permitted to sell his products, comprising most of the dealers throughout the country, which fix the price for all sales, whether wholesale or retail, operated as a restraint of trade, unlawful both at common law, and as to interstate commerce under the Anti-Trust Act,-even though such products may be proprietary medicines made under secret formulae; affirming the judgment of the circuit court of appeals of the sixth circuit, 164. Fed. 803. The court said there was no analogy to the right secured by letters patented, and that the value of the so-called proprietary medicines unpatented stood on no other footing than other manufactures. The case was not analogous to a sale of good will, or of an interest in a business or of the grant of a right to use a process of manufacture, and that the agreement was designed to maintain prices after the complainant had parted with the title to the article sold, and to prevent competition of those who trade in them. The court said further that "where commodities have passed into the channels of trade and are owned by dealers, the validity of agreements to prevent competition, and to maintain prices is not to be determined by the circumstances, whether they were produced by several manufacturers, or by one, or whether they were previously owned by one or by many; the complainant having sold its product at prices satisfactory to itself, the public is entitled to whatever advantage may be derived from competition in the subsequent traffic."

The decision in this case not only overruled the decisions in the circuit court in sustaining these proprietary medicine contracts, (see 149 Fed. 858), but the reasoning of the opinion condemned all contracts between vendor and vendee whereunder the vendor undertakes to control the prices on goods sold after parting with the title thereto. The decision is however to be distinguished from cases such as Witwell v. Continental Tobacco Co., supra, where the purpose and effect of the agreement is not to control prices in the hands of the vendee, but to protect the trade of the vendor from competitors. See § 86, supra.

§ 454. Section 2 of act.

SECTION 2.

455. Criminal procedure under the act-Sufficiency of indictments. 456. The Chicago Meat Trust indictment.

457. Criminal conspiracy under the act-the overt act.

458. Limitation of prosecutions for conspiracy.

459. Sufficiency of indictment for conspiracy.

460. Corporation indictable for criminal conspiracy.

461. Indictability of conspiracy to run a corner.

462. Immunity of witnesses in criminal prosecutions under act. 463. The plea of nolo contendere.

§ 454 (327). Persons engaging in monopolies guilty of misdemeanor.-SEC. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign Nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

(As to what constitutes a monopoly or attempt to monopolize under this section under the construction of the act by the supreme court in the Standard Oil and Tobacco Cases, see supra, § 83.)

§ 455 (328). Criminal procedure under the act-Sufficiency of indictment.-The first section of the act condemned two distinct things, a contract in restraint of trade and a combination or conspiracy in restraint of trade, and it was held in Rice v. Standard Oil Co., 134 Fed. 464, Dist. N. J., January, 1905, that these distinct offenses should not be confused either in indictments or in civil suits, citing United States v. Cadwallader, 59 Fed. 677 (1893). The second section makes a distinct offense, that of monopolizing or attempting to monopolize any part of trade or commerce among the states.

The act does not define what is a monopoly any more than it does what is a conspiracy in restraint of trade, and resort must therefore be had to common law for a definition of these general terms. In re Green, 52 Fed. 104, 1892. It is insufficient in an indictment to simply follow the language of the act, for the reason

that the words of the statute do not of themselves fully, directly and clearly set forth the elements necessary to constitute the offense intended to be punished.

For the essentials of indictment for violation of the Act, see In re Corning and United States v. Greenhutt et al., 51 Fed. 205, northern district of Ohio, 1892, and In re Tyrrell, 51 Fed. 213, circuit court southern district of New York, 1892; In re Greene, circuit court southern district of Ohio, 52 Fed. 104, 1892; United States v. Nelson, 52 Fed. 646, district court district of Minnesota, 1892; and Charge to the grand jury by Grosscup, J., 62 Fed. 828 (1894), and by Ross, J., 62 Fed. 834, in southern district of California, 1894.

It was held in these cases that it was not sufficient to simply follow the language of the statute, but that the indictment must contain a certain description of the offense and a statement of the facts constituting the same.

See also Charge to grand jury, E. D. of Ga., by Judge Speer, 151 Fed. 834 (1907), on the essentials of a combination and restraint of interstate commerce.

In U. S. v. American Naval Stores Co., C. C. S. D. of Ga., 186 Fed. 592 (1909), it was held that an indictment charging a conspiracy to violate the act that monopolizing or an attempt to monopolize were separate offenses and could not be included in one of the indictment. The court said that it was important that the defendants should know whether the government would proceed to prove that the defendants monopolized or attempted to monopolize.

These decisions, that an indictment under the act could not merely follow the language of the statute in charging a contract or combination in restraint of trade or a monopolizing, or attempt to monopolize interstate trade or commerce, but must contain a statement of the facts constituting the offense charged, were rendered prior to the definite construction of the act by the decisions of the supreme court in the Standard Oil and Tobacco Cases, and the correctness of this ruling is clear in the light of these decisions. It is not every restraint of trade which is illegal and criminal; but such restraint of trade, as would have been illegal and unenforcible at common law, is penalized by the statute. In a criminal prosecution therefore under this act, the indictment must set forth the facts