Synthetic resins and their raw materials / A survey of the types and uses of synthetic resins, the organization of the industry, and the trade in resins and raw materials, with particular references to factors essential to tariff consideration. Under the general provisions of section 332, title III, part II, Tariff act of 1930.

by United States Tariff Commission

The effect of patents on international trade.

A second factor involved in limiting international trade in resins is that relating to patents. The basic patents on tar-acid resins have expired; but while they were in force, they prevented imports into the United States. In the United States a valid patent can be enforced at law not only against domestic products which infringe but also against imports. In addition to court action, the provisions of our tariff law prohibiting unfair competition in the import trade were invoked to prevent entry of synthetic phenolic (tar-acid) resin, form C, but when the basic patent for this material expired, the exclusion order no longer applied to single color material, except in the matter of certain marking requirements.[6]

The patent situation may militate against exports as well as imports. Where a company owns foreign patents it may set up a company to exploit them abroad, or it may license their use by others. Again, mutual interest may dictate an exchange (by cross-licensing) of certain patents. International licensing of patents is usually accompanied by divisions of international markets through formal or informal understanding. Such agreements may outlive the life of the patents, especially if bolstered with financial connections. But unless the original producers continue to dominate their respective markets, any agreements between them are likely to diminish in importance, because after the patents expire new competitors would have a free hand in foreign as well as domestic markets.

The original United States producer of tar-acid resins set up or licensed companies to manufacture in a number of foreign countries. The urea-formaldehyde process was developed in Europe and the first American producer was a licensee of a British corporation. Similar arrangements exist with regard to most of the other resins.