Kroll v. McGrath, 11149

• Decision Date: 17 July 1952
• Docket Number: No. 11149,11150.,11149
• Citation: 91 US App. DC 172,199 F.2d 187
• Parties: KROLL v. McGRATH. McGRATH v. KROLL.
• Court: U.S. Court of Appeals — District of Columbia Circuit

91 US App. DC 172, 199 F.2d 187 (1952)

KROLL v. McGRATH.

McGRATH v. KROLL.

Nos. 11149, 11150.

United States Court of Appeals District of Columbia Circuit.

Argued January 9, 1952.

Decided July 17, 1952.

Malcolm N. Rich, New York City, with whom Clarence G. Campbell, New York City, was on the brief, for William J. Kroll, New York City, appellant in No. 11,149 and appellee in No. 11,150. James W. Dent, New York City, also entered an appearance for William J. Kroll.

Samuel Z. Gordon, Atty., Washington, D. C., Department of Justice, of the Bar of the Court of Appeals of New York, pro hac vice, by special leave of Court, with whom Asst. Atty. Gen. Harold Baynton and George B. Searls, Atty., Washington, D. C., Department of Justice, were on the brief, for J. Howard McGrath, Washington, D. C., appellee in No. 11,149 and appellant in No. 11,150.

Before CLARK, WILBUR K. MILLER and PROCTOR, Circuit Judges.

CLARK, Circuit Judge.

Both parties have appealed from an order of the United States District Court for the District of Columbia. We shall refer to them as "Kroll" and "the government" for purposes of ease and clarity in reading.

In its order, the court directed the return of a patent to Kroll, subject to an exclusive license in the government, with right of sub-licensing at royalties agreed upon by Kroll and the government, or set by the court in the event the two were unable to agree as to the rate thereof. In addition, the court found that certain compensation received by Kroll from a third party for release of past infringements of the patent was in lieu of royalties, and ordered Kroll to pay one-half thereof to the government.

The action was brought by Kroll, a non-enemy alien, resident of the United States, to obtain return of a certain United States patent which had been seized by the Alien Property Custodian as the property of a non-enemy alien citizen of an enemy-occupied country. There existed between Kroll and a German corporation (which we shall call the corporation) a contract by the terms of which the corporation enjoyed certain rights in any inventions perfected by Kroll, such rights to endure for the life of each patent affected. In addition to the patent itself, the Alien Property Custodian seized all the rights of the German corporation under that contract.

In his appeal, Kroll seeks return of the patent free of any rights in the government, and he seeks relief from the order requiring that he pay to the government one-half the amount he has received in settlement of infringements. Essentially, Kroll contends that the contract with the corporation was void under German law, but in any event that any rights of the corporation in the patent were at best inchoate since he and the corporation had not completed certain arrangements which Kroll asserts were conditions precedent to creation of a completed license.

The government has also appealed from the judgment of the District Court, contending that Section 20 of the Trading With the Enemy Act¹ bars any award of judgment to Kroll since he failed to furnish the court with a schedule of agents' and attorneys' fees and to secure court approval thereof. The government also contends that the court erred in that part of its order which provides that the amount of royalties to be charged for sub-licensing must be determined by agreement between Kroll and the government, or by the court.

The District Court made most careful and exhaustive findings...