Task: sc_issuearea

What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.

Mr. Justice Burton
delivered the opinion of the Court.
This action was brought by The United States of America, June 24,1944, in the District Court of the United States for the Southern District of New York, against National Lead Company (a New Jersey corporation, here called National Lead or NL), its wholly owned subsidiary, Titan Company, Inc. (a Delaware corporation, here called Titan Inc. or Tine) and E. I. du Pont de Nemours and Company (a Delaware corporation, here called du Pont or DP). It is a proceeding in equity instituted under § 4 of the Sherman Antitrust Act, 26 Stat. 209, 36 Stat. 1167, 15 U. S. C. § 4, to prevent and restrain alleged violations of § § 1 and 2 of that Act, 26 Stat. 209, 50 Stat. 693, 15 U. S. C. §§ 1 and 2. The trial was conducted by-Judge Simon H. Rifkind of that court. It began December 4, 1944, and ended March 14, 1945. His opinion was filed July 5, 1945. His 96 findings of fact and two conclusions of law were entered October 2,1945. After extended consideration of its terms, by the court and by counsel for all parties, the decree was entered October 11, 1945. The opinion and decree are reported in 63 F. Supp. 513-535. The findings of fact, conclusions of law and much of the detailed discussion of the decree are in the record. Separate appeals were filed in this Court, in case No. 89 by the United States, in case No. 90 by National Lead and Titan Inc. and in case No. 91 by du Pont. The three companies are sometimes referred to as “the appellant companies.” We noted probable jurisdiction in each appeal, May 20, 1946, and the three appeals were argued together February 3-5, 1947. A partial stay of the decree had been granted by Mr. Justice Reed, on January 2, 1946, pending determination of the appeals. Reference is made to the opinion of the District Court for a recital of the complex facts which it had to consider in order to reach its conclusion that National Lead, Titan Inc. and du Pont each violated § 1 of the Sherman Act, although it found a marked difference between the conduct of National Lead and of its subsidiary, Titan Inc., on the one hand, and that of du Pont on the other. This Court affirms the judgment of the District Court, except as to the original effective dates of certain of its provisions, and our discussion will relate largely to the assignments of error as to the terms of the decree.
I. The first issue presented to the District Court was that of the participation of National Lead and Titan Inc. in a so-called “international cartel” dating back to 1920, and constituting a combination or conspiracy in restraint of trade and commerce in titanium pigments and compounds, among the several states of the United States and with foreign nations, which combination, after 1933, was alleged to include du Pont. The District Court found such participation. In their brief on appeal in No. 90, National Lead and Titan Inc. said:
“The Government’s case was based on a series of closely related agreements made between 1920 and 1944. The agreements have been cancelled and continuation or renewal has been enjoined. The appeals are greatly simplified by the fact that we accept the cancellation and the injunction against continuation or renewal. We submit, however, that the court went too far in forbidding normal and usual contractual arrangements.”
Accordingly, the finding of the District Court, as to the participation of National Lead and Titan Inc. in the violation of § 1 of the Sherman Act, is accepted here without further discussion.
II. The second issue was that of the participation of du Pont in such combination after 1933. The District Court found that du Pont “joined the conspiracy found herein to exist between, NL and its foreign associates. DP’s status rights and obligations were different from those of the other members of the combination. DP did not thereafter withdraw.” Finding of Fact 73. The District Court, in its opinion, also stated that—
“At least then as to territorial delimitations of the titanium pigment business, DP joined the combination....
“My general summary of the evidence on this issue is that DP was a member of the combination — true, a special member, with a status, rights and obligations, different from that of the other members, but a member nonetheless.” 63 F. Supp. at 530, 531, and see the preamble to the decree at 532.
This finding is contested vigorously by du Pont and is the principal subject matter of its appeal in No. 91. After careful consideration, we agree with the following conclusion of the District Court:
“In sharp contrast with NL, DP exhibited, from the very beginning of its interest in titanium, an alert consciousness of the anti-trust laws and moved cautiously and under the guidance of trained antitrust lawyers. The question is whether it succeeded in avoiding not only the form but also the substance of transgression. I have concluded that it has not;....” Id. at527.
It would serve no beneficial purpose to review here the evidence upon which that court based its conclusion. Its opinion analyzes the facts (Id. at 527-531) and, in the light of the record as a whole, we find in those facts the support necessary for the conclusion reached.
III. Related to these issues was a third. This was whether the contract between National Lead and du Pont was offensive to the antitrust laws apart from the relation of that contract, and of the parties thereto, to the foreign producers. The District Court found that it was and also related it to the international situation. It found that — ’
“The defendants NL, DP and Tine have utilized their patents which relate to the manufacture and use of titanium pigments to control and regulate the manufacture and sale of titanium pigments and compounds in the United States; and NL and Tine with the co-operation of DP have done so throughout the rest of the world.” Finding of Fact 95, sub-paragraph 9.
In its opinion the District Court emphasized also “the great power they acquired” (Id. at 531) and indicated criticism of limitations originally inserted in certain important licenses, although later removed from them. Id. at 532. Added together, the control of the patents covered by this agreement gave to National Lead and du Pont “domination and control over the titanium pigment business in the U. S.” Finding of Fact 79. The District Court referred to the “proliferation of patents” as another “inevitable consequence” of the agreement. Id. at 532. This was explained to mean the great multiplication of related patents, resulting in increasing the difficulty of an attack upon them. The validity of none of the hundreds of patents involved has been litigated.
“These patents, through the agreements in which they are enmeshed and the manner in which they have been used, have, in fact, been forged into instruments of domination of an entire industry. The net effect is that a business, originally founded upon patents which have long since expired, is today less accessible to free enterprise than when it was first launched.” Id. at 532.
Referring to the exchange of patents between National Lead and du Pont, the District Court added:
“... in the context of the present case,... this exchange between two corporations, who between them controlled the entire market, becomes an instrument of restraint, available for use and used, to continue the mastery of the market which NL and DP achieved by means of the illegal international agreements.” Id. at 532.
These facts are important not only in affirming, as we do, the finding that National Lead, Titan Inc. and du Pont each has violated § 1 of the Sherman Antitrust Act, but also in passing upon the terms of the decree entered in order to prevent future violations of that Act by them.
IV. The remaining issues relate to the terms of the decree. The entire decree, exclusive of its Appendix, is reported at 63 F. Supp. 532-535, and, for reference purposes, is here reprinted in the margin, as there reported.
This decree represents a careful attempt to fit the remedy to the needs of this case. The record upon which it is based consists of two large volumes of testimony and four larger volumes of exhibits, representing a total of over 5,500 pages, reflecting more than three months of trial. It demonstrates a commendable procedure. Proposed findings of fact and conclusions of law were submitted on behalf of the respective parties and a form of decree was submitted on behalf of the Government to the District Court immediately following the trial. The opinion of the District Court, when filed, formed the basis of further consultation and argument. After the District Court’s findings of fact and conclusions of law were entered, further conferences were held with counsel and full opportunity was given to them to propose changes in the findings of fact and the decree. Much of this discussion was reported in the record and has been of benefit to this Court in reviewing the decree.
In our opinion, the provisions of this decree, to a large extent, are matters lying within the discretion of the District Court as a court of equity whose duty it was to make the remedy as effective as possible. The District Court was confronted with an obligation to give effect to the provisions, on the one hand, of the patent laws granting certain valuable rights in the nature of monopolies to the patentees and their licensees, and also to give effect, on the other hand, to the provisions of the Sherman Antitrust Act prohibiting any combination or conspiracy in restraint of trade among the several states or with foreign nations. We believe that the District Court has not exceeded its discretion in the provisions of this decree but has employed its discretion with commendable fairness having especial regard to the needs of this case. It has succeeded in keeping within the lines of precedent thus far established, although, in this field, such lines cannot be much more than guides. The essential consideration is that the remedy shall be as effective and fair as possible in preventing continued or future violations of the Antitrust Act in the light of the facts of the particular case.
The issues are presented by the assignments of error in the three appeals. They will be considered separately in conjunction with their supporting arguments. In each instance we sustain the present decree.
A. Request to omit the requirement of the granting of compulsory, nonexclusive licenses at uniform, reasonable royalties and to substitute for that requirement, either a perpetual injunction against the enforcement of the titanium patents presently owned or controlled by the respective appellant companies, or a provision for compulsory licenses to be issued under those patents, free of royalties.
This is the major legal issue in this case.
The material provisions in the present decree are as follows:
“4. The term 'patents as herein defined’ shall mean United States letters patent and applications as follows: (a) the letters patent and patent applications listed in Appendix A hereof; (b) all divisions, continuations or reissues of any of the foregoing patents and applications; (c) all patents issued upon such applications; (d) all patents which cover any titanium pigments or any process for the manufacture of titanium pigments issued to any of the defendants within five years from the date of this decree; and all such patents which any of the defendants acquires within such five years; and all such patents of which any of the defendants becomes the exclusive licensee within such five years with power to sublicense.
“7. Each of the defendants is ordered to grant to any applicant therefor, including any defendant or co-conspirator, a nonexclusive license under any or all of the patents as herein defined at a uniform, reasonable royalty. Such grant may, at the option of the licensor, be conditioned upon the reciprocal grant of a license by the applicant, at a reasonable royalty, under any and all patents covering titanium pigments or their manufacture, now issued or pending, or issued within five years from the date of this decree, if any, owned or controlled by such applicant. Such license or reciprocal license may, at the option of either party, contain a provision for the inspection of the books and records of the licensee by an independent auditor who shall report to the licensor only the amount of royalty due and payable and no other information. During a period of three years from the date of this decree such license or reciprocal license may at the option of either party contain a provision for the imparting in writing, at a reasonable charge, by the licensor to the licensee, of the methods and processes used by the former at the date of the license in its commercial practice under the licensed patents in connection with the production of titanium pigments. The Court reserves jurisdiction to pass upon the reasonableness of any royalty or charge herein directed to be reasonable. Defendants are restrained from attempting to enforce any rights under any foreign patents owned by them or under which they are the exclusive licensees to prevent the exportation of titanium pigments from the United States to any foreign country.”
The assignment of error originally made by the Government, in No. 89, as to this point was as follows:
“1. The court erred in failing to require each defendant to license its existing titanium pigment patents free of royalty until the court shall have determined, on application by any defendant, that the effects of the defendants’ illegal combination, as set forth in the court’s findings of fact and conclusions of law, have been fully dissipated.”
Later the Government moved to amend this assignment of error so that it would read as follows:
“The court erred in failing to enter an injunction perpetually enjoining the defendants from enforcing the titanium patents presently owned or controlled by them.”
This Court postponed consideration of the above motion to the hearing of the case on its merits. On oral argument, the Government supported its second proposal but indicated that, if that proposal were not satisfactory, it would prefer its original request to the provision for uniform, reasonable royalties now in the decree. The Government’s motion to amend its assignment of errors accordingly is granted. National Lead, in its assignments of error in No. 90, however, assigns the orders contained in paragraph 7 of the decree on this subject as error and, in its briefs, argues that “The court erred in refusing to order royalty-free licensing of all patents as defined in the judgment.” Accordingly, both proposals have been considered.
While it has been contended that, because of the decision of this Court in Hartford-Empire Co. v. United States, 323 U. S. 386, the District Court was not free in the present case to require the issuance of royalty-free licenses, we feel that, without reaching the question whether royalty-free licensing or a perpetual injunction against the enforcement of a patent is permissible as a matter of law in any case, the present decree represents an exercise of sound judicial discretion.
This is a civil, not a criminal, proceeding. The purpose of the decree, therefore, is effective and fair enforcement, not punishment. An understanding of the findings of fact is essential to an appreciation of the reasons for the decree.
Pure titanium pigment and its compounds represent a product of comparatively recent development but of major commercial value. The District Court found that
“Titanium pigments are possessed of great opacity, hiding power and chemical inertness, and are largely displacing other pigments such as lithopone and white lead. Titanium pigments are used in the manufacture of paints and are also used in the manufacture of rubber, glass, paper, vitreous enamels, and many other products....
“In and before 1920 there was no substantial trade or commerce in, and no commercial manufacture of, titanium pigments for use in paint, paper, rubber, or other products;....” Finding of Fact 33.
“The production of titanium pigments in the United States has risen from 100 tons (on the basis of pure Ti02 content) in 1920 to approximately 110,000 tons in 1943 with a peak production of approximately 128,000 tons in the United States in 1941. The total production of titanium pigments and compounds outside of the United States has shown less growth, the estimated foreign production of titanium pigments and compounds being approximately 1,000 tons in 1920 and approximately 23,000 tons in 1938.” Finding of Fact 35.
There are four producers of titanium products in the United States — National Lead, du Pont, American Zirconium (here called Zirconium), which is a subsidiary of Glidden Company, and Virginia Chemical Company (here called Virginia Chemical), which is a subsidiary of American Cyanamid Company. National Lead and du Pont have cross-licensed each other under their respective patents. Zirconium entered the field in 1935 with licenses from National Lead and du Pont, but the National Lead license has been canceled. Virginia Chemical entered the field in 1937 with a license from du Pont. Finding of Fact 42.
National Lead has assets of over $100,000,000 and is the largest manufacturer of titanium pigments and compounds not only in the United States but in the world. In 1943 it manufactured and sold 76.5% of the composite pigments and 46.4% of pure Ti02 made in the United States. Finding of Fact 3. Du Pont is one of the largest chemical companies in the United States with assets of over $1,000,000,000. It is one of the largest manufacturers of titanium pigments in the United States. In 1943 it manufactured and sold approximately 23.5% of the composite pigments and 45.1% of pure Ti02 made in the United States. Finding of Fact 9.
National Lead took an early lead in promoting the commercial manufacture and use of titanium pigments. In 1920 it acquired an interest in The Titanium Pigment Company, Inc., which had been organized by the Titanium Alloy Manufacturing Company at Niagara Falls, New York. It made use of a patented process developed by Barton and Rossi. At about that time, a Norwegian chemist, Gustav Jebsen, made similar investigations but along different lines in Norway. He and his associates perfected a patented means for producing relatively pure titanium dioxide by a process much less costly than that in use at Niagara Falls. These associates had not, however, perfected processes for the manufacture of composite pigments. Finding of Fact 33. In about 1922, Joseph Blumenfeld, a chemist and managing director of a French company, obtained patents relating to the manufacture of titanium compounds. Finding of Fact 34.
On July 30, 1920, The Titanium Pigment Company, Inc., (affiliated with National Lead) and Titan Co. A/S (representing the Jebsen interests) entered into an agreement which is still uncanceled. Its principles became the basis for more than 60 subsequent agreements and for an international cartel in titanium pigments. The essential features of this agreement are stated in Finding of Fact 44 and in the opinion of the District Court, 63 F. Supp. at 517-518.
Briefly stated, it applied to a licensed field, defined as including all substances containing above 2% of titanium unless containing by weight more than 5% of a metal other than titanium in its purely metallic form. It applied to all apparatus, methods and processes useful in obtaining or manufacturing such substances both in the titanium and in the titanium compound field.
Both parties agreed to grant and accept a license, exclusive of all others including the licensor, under all “existing or future” patents of the licensing party. They divided the globe territorially. The American company was to have the North American continent. The Norwegian company was to have the rest of the world, except that reciprocal, nonexclusive rights of sale were reserved for both companies in South America.
Detailed provision was made for exchange of copies of applications for patents filed by the parties or their other licensees. Neither party was ever to question or contest the validity of any patent of the other under which it was licensed within the field described.
The American company became the exclusive agent for the Norwegian company in North America and vice versa outside of North and South America. Sales were to be at prices and on terms determined by the agent. Notwithstanding these agencies, however, importations of “finished articles” — that is, paint, paper, rubber, glass, etc. — containing titanium products of the principal, its licensees or sublicensees, would be permitted provided such products did not constitute such an important part of such finished articles that sales within the agent’s territory would interfere substantially with the agent’s sales of its own titanium products.
Each party would impart semiannually to the other information in detail as to knowledge obtained in and applicable to the “licensed field,” and would permit the other to inspect and study operations in its plants (exclusive of research laboratories). The reciprocal grants of exclusive licenses would extend to December 31, 1936, and thereafter for periods of ten years each, with provision for termination by notice to be given at least five years before the end of any such period. In particular, so long as each company held an exclusive license from the other under this agreement, it would have the right to grant licenses under its own patents, and sublicenses under the other’s patents, on the condition, nevertheless, that every such licensee or sublicensee would grant to the party to the 1920 agreement (other than its licensor), its patent rights in the “licensed field” identical in character, territorial scope, and duration to those given by its licensor to such other party under the 1920 agreement, and would impart technical information to such other party in the same manner and to the same extent as its licensor.
In 1929, the obligations of Titan Co. A/S under this agreement were assumed by Titan Inc. and, in 1936, the obligations of The Titanium Pigment Company, Inc., were assumed by National Lead.
Other companies throughout the world joined in carrying out this program to restrain international commerce and to establish an international combination or conspiracy in restraint of trade. The complaint in the present case lists many of these foreign companies as co-conspirators with National Lead, Titan Inc. and du Pont, but it does not attempt to make such co-conspirators parties defendant. The District Court recognized that it did not have jurisdiction over such co-conspirators and found in that circumstance one of its difficulties in effectively restraining National Lead, Titan Inc. and du Pont from further violations of the Sherman Antitrust Act, pursuant to this international as well as domestic program. To accomplish this purpose, the District Court has adjudged these agreements to be unlawful and it has canceled them. In addition, it has enjoined all three defendants, National Lead, Titan Inc. and du Pont, from further performance of any of the provisions of such agreements and of any agreements amendatory thereof or supplemental thereto. Pars. 5 and 6 of the decree, 63 F. Supp. at 533-534.
National Lead acquired an 87% interest in Titan Co. A/S, Jebsen retaining 13%. The District Court found that “The intended purpose of the acquisition of control of TAS by NL was to utilize TAS and the contract of 1920 to further control competition in the manufacture of titanium pigments and compounds in all markets of the world including the United States.” Finding of Fact 47. While this combination and conspiracy in restraint of interstate and foreign commerce thus was developing from 1920 to 1931, with National Lead and Titan Inc. at its center, du Pont was unconnected with it. Du Pont had initiated independent, but unsuccessful, efforts to develop, through research, a new and patentable commercially feasible process in this field. It became convinced that if it were to undertake the manufacture and sale of titanium pigments as a development of its white pigment business, it would be necessary to enter the field as promptly as possible through the acquisition of the patents and of the going business of Commercial Pigments Company. That company had been formed by Commercial Solvents Corporation in 1928 and had acquired the Blumenfeld and other patents in the United States relating to the manufacture and sale of titanium pigments and compounds. It was operating a plant in Baltimore, Maryland, where it manufactured pure Ti02 pigment only and sold it in competition with the The Titanium Pigment Company, Inc. (the affiliate of National Lead). In July, 1931, du Pont, through its subsidiary, Krebs Pigment & Color Corporation, acquired all of the assets and assumed some of the obligations of Commercial Pigments Company. It thus continued and, in fact, increased its competition in the titanium pigment field against National Lead. Findings of Fact 70,12, 10 and 71.
“Both NL and DP in good faith claimed that each infringed certain of the other’s titanium pigment patents and both in good faith denied such infringement claiming, among other things, that the patents alleged to be infringed were of doubtful validity. NL and DP agreed in October, 1932, that the validity of the patents claimed to be infringed should not be questioned except as a last resort and that they should try to arrive at a general. understanding.” Finding of Fact 72.
Finally, in 1933, The Titanium Pigment Company, Inc. (by that time a 100% subsidiary of National Lead), and Krebs Pigment & Color Corporation (subsidiary of du Pont) were the only producers of titanium pigments in the United States. The 1920 agreement, however, prevented The Titanium Pigment Company, Inc. (National Lead), from entering into a contract with Krebs Pigment & Color Corporation (du Pont) unless the latter subscribed to the provisions of the 1920 agreement. Such a subscription would have required an agreement by Krebs (du Pont) not to export into the territories of National Lead’s foreign associates, and an agreement to grant to National Lead’s foreign associates exclusive licenses under all of Krebs’ (du Pont’s) present and future patents for titanium pigments and compounds in the territories of the foreign associates. Finding of Fact 73. After extensive negotiations, National Lead and du Pont formulated an agreement in writing, dated as of January 1, 1933, which was executed August 28,1933. It is summarized in Finding of Fact 73 and in the opinion of the lower court, 63 F. Supp. at 520-521. By its terms, it provided for cross-licensing but did not provide for the exclusive licensing and restrictive territorial and agency agreements specified in the 1920 program. Certain foreign associates of National Lead, particularly Interessengemeinschaft Farbenindustrie Aktiengesellschaft (usually referred to as I. G. Farbenindustrie), insisted upon some such commitment from du Pont or its subsidiary. This insistence never was abandoned. After further negotiations and an exchange of letters, all as set forth in full in Finding of Fact 73 and in the opinion of the District Court, 63 F. Supp. at 528-529, some understanding was reached as to the future conduct of du Pont, or of its subsidiary. On the strength of this, I. G. Farbenindustrie agreed to the situation. On the basis of all the evidence, the District Court found that — ■
“DP, through Rupprecht [President of Krebs Pigment & Color Corporation] and Krebs [the corporation], by these assurances and Exhibit E [the agreement dated as of January 1, 1933], joined the conspiracy found herein to exist between, NL and its foreign associates. DP’s status rights and obligations were different from those of the other members of the combination. DP did not thereafter withdraw.” Finding of Fact 73.
That finding, which we accept, throws important light upon the conditions to which the decree is to be applied. Furthermore, although National Lead and du Pont exchanged technical information relating to the manufacturing or use of titanium pigments or compounds from about April, 1932, until April, 1940, this exchange was discontinued May 1, 1940. The agreement of 1933 between The Titanium Pigment Company, Inc., and Krebs Pigment & Color Corporation which then had been assumed by National Lead and du Pont, respectively, was amended on January 1, 1941, to eliminate provisions for the exchange of technical information. Finding of Fact 75. It was further amended to include extender pigments, which theretofore had been included by implication and practice. Finding of Fact 76. After January 1, 1941, patent applications were to be available between National Lead and du Pont only after six months from the date of their filing, instead of immediately. Finding of Fact 77.
“From 1933 on there was active competition between NL and DP for customers. There has been a vast increase in sales; and repeated reductions in the price of titanium pigments have taken place and a very few increases. DP entered the titanium pigment business in 1931 and since that date it has made frequent plant expansions for the manufacture of pure and composite Ti02 and its production increased from 20,027 tons in 1935 to 50,674 tons in 1941 and then decreased to 42,843 tons in 1943.
“NL and DP have endeavored to match each other’s titanium products; but each also manufactures certain titanium pigments having special applications not manufactured by the other.
“There is no allocation of territory or customers between NL and DP; and each maintains a large, highly trained technical sales force engaged in endeavoring to sell titanium, pigments. To a very large extent the salesmen of the two companies are chemists whose contact with consumers (that is, manufacturers of paint, rubber, glass, etc.) consists in endeavoring to demonstrate that their products merit acceptance on the basis of technical superiority. The buyers of titanium pigments are mainly well-informed, experienced purchasing agents. NL and DP sell for identical prices; there is no evidence that such price identity is the product of agreement or collusion.” Finding of Fact 78.
These findings disclose the special conditions which confronted the District Court in framing its decree. They disclose a vigorous, comparatively young, but comparatively large, world-wide industry in which two great companies, National Lead and du Pont, now control approximately 90% of the domestic production in substantially equal shares. The balance of that production is in the hands of two smaller companies. Each of these is affiliated with larger organizations, not parties to this case. The findings show vigorous and apparently profitable competition on the part of each of the four producers, including an intimation that the smaller companies are gaining ground rather than losing it. Keen competition has existed both before and after the elimination, by the 1933 agreement and understanding, of certain patent advantages from among the weapons of competition. The competition between National Lead and du Pont has been carried into this Court where today National Lead supports the Government’s proposal for royalty-free licenses, while du Pont argues strongly for a complete dismissal of the proceedings and contends that, in any event, if there are to be compulsory licenses they at least should require payment of uniform, reasonable royalties as provided in the present decree.
Assuming, as is justified, that violation of the Sherman Act in this case has consisted primarily of the misuse of patent rights placing restraint upon interstate and foreign commerce, that conduct is not before this Court for punishment. It is brought before this Court in order to secure an order for its immediate discontinuance and for its future prevention. That will be accomplished largely through the strict prohibition of further performance of the provisions of the unlawful agreements. Further assurance against continued illegal restraints upon interstate and foreign commerce through misuse of these patent rights is provided through the compulsory granting to any applicant therefor of licenses at uniform, reasonable royalties under any or all patents defined in the decree. Such patents include not only the patents and patent applications listed in the appendix to the decree, but also, among others, all patents which cover any titanium pigments or any process for the manufacture of such pigments issued to, or acquired by, any of the appellant companies within five years from the date of the decree. It applies also to all such patents of which any of the appellant companies shall become the exclusive licensee within such five years with power to sublicense.
On the facts before us, neither the issuance of such licenses on a royalty-free basis nor the issuance of a permanent injunction prohibiting the patentees and licensees from enforcing those patents has been shown to be necessary in order to enforce effectively the Antitrust Act. We do not, in this case, face the issue of the constitutionality of such an order. That issue would arise only in a case where the order would be more necessary and appropriate to the enforcement of the Antitrust Act than here. In the absence of a showing to the contrary, it is obvious that some patents should entitle their owners to receive higher royalties than others. Also, it is clear that several patents, each of equal value, ordinarily should entitle their owners to a larger total return in royalties than would one of them alone. It follows that to reduce all royalties automatically to a total of zero, regardless of their nature and regardless of their number, appears, on its face, to be inequitable without special proof to support such a conclusion. On the other hand, it may well be that uniform, reasonable royalties computed on some patents will be found to be but nominal in value. Such royalties might be set at zero or at a nominal rate. The conclusion, however, would depend on the facts of each case.
Recognizing the difficulty of computing a reasonable royalty, nevertheless, that conception is one that already has been recognized both by Congress and by this Court.
The term frequently has been employed in Sherman Antitrust case consent decrees. In the present case, the royalties charged to and paid by Zirconium and Virginia Chemical provide enough guidance to indicate that the reasonableness of future royalties may be determined in this case with less difficulty than often might confront a court faced with such a task. Cf. Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U. S. 689, 697-698. The growing strength of those two royalty-paying licensees has demonstrated that royalty-free licenses have not been essential to such progress even under past conditions. Finally, the District Court, under paragraphs 7 and 13 of the decree, will retain sufficient jurisdiction to enable it to vacate or modify its orders fixing reasonable royalty rates if it finds such action to be necessary or appropriate. We hold, therefore, that paragraphs 4 and 7 of the decree should not be modified either so as to provide for compulsory royalty-free licenses or so as to enjoin the patentees or licensees from enforcing the terms of the patents involved.
B. Request to add a provision requiring National Lead and du Pont each to submit, within a year, a plan for the divestiture by it of one of its two principal titanium pigment plants, together with the related physical property. This request is urged by the Government in No. 89. It is strongly opposed both by National Lead and du Pont. The issue was discussed at length by the parties and the District Court in the reported conferences as to the form of the decree.
We believe there is neither precedent nor good reason for such a requirement. The violation of the Sherman Act is found in these cases in the patent pooling and in the related agreements restraining interstate and foreign commerce. There is neither allegation in the complaint nor finding of fact by the District Court that the physical properties of either National Lead or du Pont have been acquired or used in a manner violative of the Sherman Act, except as such acquisition or use may have been incidental or related to the agreements above mentioned. The cancellation of such agreements and the injunction against the performance of them by the appellant companies eliminate them. Paragraph 8 of the decree goes further. It requires National Lead and its subsidiary, Titan Inc., to present, within one year, a plan for divesting themselves of their stockholdings and other financial interests in certain foreign corporations, or for the purchase of the entire stockholdings and other financial interests, direct or indirect, in such corporations or any of them. Such a plan, which was required also to provide for its completion within two years from the date of the decree, will go as far toward divestiture as the findings of fact indicate should be necessary to make the decree effective.
There is no finding of fact, and apparently no evidence, showing that the respective principal titanium plants of National Lead or du Pont were acquired in violation of law, that they ever were separately owned or operated, or that they are adapted to

Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer:

Answer: H