British Nylon Spinners, Ltd. v. Imperial Chemical Industries, Ltd.

In 1939, E.I. duPont deNemours & Co. (DuPont), an American company, licensed certain patents for nylon and nylon products to Imperial Chemical Industries, Ltd. (ICI) (defendant), an English company based in London. ICI and Courtaulds, Ltd., another English company, jointly formed a third company, British Nylon Spinners, Ltd. (BNS) (plaintiff), in England to manufacture nylon yarn from nylon polymer manufactured by ICI. Neither ICI nor Courtaulds held a controlling interest in BNS. ICI gave BNS an exclusive sub-license of the DuPont patents. In 1944, the United States initiated an action against DuPont and ICI alleging that the companies had violated § 1 of the Sherman Antitrust Act of 1890 by dividing the market for nylon products, including in the United States and the United Kingdom. During those proceedings, DuPont assigned its British patents to ICI, and ICI assigned particular inventions and patents to DuPont for DuPont’s exclusive use in the United States. Shortly before a decision in the antitrust case in the United States, ICI agreed to give BNS an exclusive direct license to use the nylon patents. The American court then held that DuPont and ICI had violated the act and, in 1952, issued a decree directing ICI not to enforce its British nylon patents in England. The American court was deferential to whether that decree could be enforced in England. BNS sued in England for specific performance to require ICI to issue the exclusive license despite the American court’s decree. The trial court issued an injunction in support of the license, which was affirmed on appeal. ICI appealed, given the still-pending directive from the American court.