## Facts

- The United States brought a civil antitrust action against Imperial Chemical Industries, Ltd. (ICI), E. I. duPont deNemours & Co. (DuPont), and related entities alleging unlawful agreements restraining trade in violation of § 1 of the Sherman Act.
- Liability for a Sherman Act § 1 violation had already been found; the court addressed the scope of the final decree (remedy).
- DuPont and ICI used patent assignments, cross-licensing, and exclusive arrangements concerning nylon and related technology in a way that functionally allocated territories.
- DuPont transferred British nylon patent rights to ICI; ICI held rights that could be used to block infringing imports into the United Kingdom.
- ICI transferred certain inventions and patents to DuPont for exclusive use in the United States; DuPont held rights that could be used to block infringing imports into the United States.
- The practical effect was to prevent ICI from exporting nylon to the United States and to prevent DuPont from exporting nylon to Great Britain, reinforcing a broader agreement to divide world territories.
- The court characterized the core misconduct as an enduring agreement to divide territories, implemented through various contractual and patent-based mechanisms.

## Issues

1. What remedial provisions should a final decree include to terminate an unlawful territorial-division agreement, prevent its revival, and eliminate its effects on U.S. imports and exports?
2. To what extent may antitrust relief restrict conduct involving patents without improperly diminishing otherwise valid patent rights?

## Decision

- The court entered a comprehensive final decree directed at preventing and restraining the proven Sherman Act § 1 violations.
- The decree enjoined agreements or arrangements among defendants that divided territories, allocated customers or markets, or unlawfully limited U.S. commerce through export or import restrictions.
- The court fashioned relief intended to restore competitive conditions affecting U.S. foreign trade and to be enforceable with minimal continuing judicial supervision.
- The court rejected decree provisions that would unnecessarily curtail valid patent rights or that lacked support in law or in the factual findings underlying the violation.

## Legal Principles

- A final antitrust decree must be designed to terminate the unlawful agreement, prevent its revival, and eliminate its anticompetitive effects by restoring competition where it was suppressed.
- Territorial market division and customer or market allocation agreements are unlawful restraints of trade under Sherman Act § 1, including when executed through patent assignments, cross-licenses, or exclusive territorial grants intended to restrict imports or exports.
- Remedial provisions must be grounded in the proven violation and limited to what is reasonably necessary to correct the competitive harm.
- Courts may not use antitrust relief to unnecessarily diminish lawful patent rights or impose provisions unsupported by law and the established facts.
- Effective decrees should rely on clear prohibitions rather than ongoing regulatory control requiring extensive judicial supervision.

## Conclusion

The court imposed broad injunctive relief to stop and prevent renewal of a territorial-division scheme affecting nylon trade and to restore competitive conditions in U.S. foreign commerce, while limiting the decree to remedies justified by the proven conduct and declining measures that would improperly reduce valid patent rights.


United States v. Imperial Chem. Indus., Ltd., 105 F. Supp. 215 (S.D.N.Y. 1952)