substantial reductions in the prices of its products, thereby passing on to the public the large savings resulting from its own economies. Price reductions in pharmaceutical products flow chiefly from (1) simplification of processes of manufacture, (2) obtaining cheaper starting materials without sacrifice to quality, and (3) increasing the market for the products. If further savings and lower costs can be achieved by any of these methods, it will be Schering's policy to pass the benefits along to the public.

The restrictions against Schering doing business outside of the United States have been removed and it is now engaged in supplying large quantities of its products to the British Dominions directly and through lend-lease, and to our neighbors in Central and South America. Schering has undertaken this work to help meet the health needs of the peoples in these areas and in so doing is carrying out the announced policies of our Government. Schering expects to stay in these markets after the war. If the announced policy of the Alien Property Custodian that seized companies shall not be permitted to return to foreign ownership is realized, Schering should occupy an increasingly important position in the American pharmaceutical field.

I will not undertake to make a comparative evaluation of stilbesterol with the synthetic natural hormones, as there have been many scientific articles written on this subject and this is really a matter for doctors and scientists to discuss. Stilbesterol is not a natural hormone and many patients who have used it have suffered from distressing side reactions due to the apparent toxicity of the product. The product is readily available for those who desire to use it. Although it may be manufactured by anyone, Schering Corporation does not sell the substance because of its policy to lend its name only the best pharmaceutical products. However, Schering will shortly introduce to the market a female sex hormone for oral use which is a derivative of the natural estrogen and which is the most potent female hormone known to science, at a price competitive for its efficacy to stilbesterol. This product, known as ethinyl estradiol, has the chief effects of the pure estrogenic hormone, estradiol, in that it gives a sense of well being which is so important to menopausal patients, in addition to alleviating the objectionable symptoms.

It may be added that the discoveries in the field of hormones were by no means confined to the German scientists. Many important discoveries, more particularly relating to the estrogenic (one of the female) hormone, were made in the United States by American chemists and are covered by patents licensed exclusively to other companies.

The significance of Schering Corporation's position in the field is that the products of its manufacture are acknowledged to be the identical hormones which are manufactured in the glandular organisms of the human body, so that a patient who receives them is receiving the identical product which his own glands would have manufactured if they had functioned normally. An interesting discussion of the history and development of hormones may be found in the book of Dr. George W. Corner, entitled "The Hormones in Human Reproduction" which was published in 1942.

Schering Corporation also owned a number of other patents covering chemical and pharmaceutical products which had never been developed. The non-exclusive use of these patents recently was offered to any company or person desiring to develop them and attached hereto as exhibit A is a copy of the circular letter which was sent out to every member of the patent bar in the United States, numbering approximately 5,000.

(The material submitted by Mr. Berge was marked "Exhibits Nos. 191 to 225" and appear on p. 1141 and following.)

Senator MURRAY. Does that conclude the testimony? We thank you, Mr. Berge.

Mr. BERGE. Thank you, Senator.

Senator MURRAY. It has been very interesting and instructive. (Whereupon, at 11:50 a. m., the subcommittee adjourned subject to the call of the chairman.

EXHIBIT No. 190

DIETHYLSTILBOESTROL1 AS A CURE FOR ONE FORM OF CANCER

[News story from The Washington Post, Washington, D. C., December 15, 1943] LONDON, December 14 (INS)-Dr. E. C. Dodds, professor of biochemistry at the University of London, declared tonight a cure for one form of cancer has been discovered.

The treatment, he said, is administered with a new drug known as diethylstilboestrol taken in the form of a synthetic chemical pill.

Dodds, estimating that the use of the drug will save some 4,0000 lives annually in Britain alone, said much of the preliminary work has been carried on in the United States. The treatment so far has been confined to cancer of the prostate gland.

"During the last year or so in America," he said, "they have reported treatment of this terrible disease by the administration of substances by mouth and the complete disappearance of symptoms without any other treatment.

"We are thankful to report that the American work now has been completely confirmed. For the first time in the history of mankind it is possible to state that one form of cancer can be completely controlled and the patient rendered symptom free by the administration of a few pills by mouth daily.

"While the actual observation of cases was made by our American colleagues, the weapon used was forged in this country by Englishmen working directly under the influence and support of the British cancer campaign.

*

"I isolated diethylstilboestrol in 1938 * 18 months ago American doctors used the product in treating carcinoma of the prostate and every case responded.

"We have treated patients here in the same way. So far our success has been 100 percent. We regard 5 years' time to be necessary to be quite sure that the controls are permanent, but scientifically, we are satisfied."

EXHIBIT No. 191

ROYALTY AGREEMENT

English Text, Counterpart 3, Original

AGREEMENT made as of January 1st, 1938, by and between SCHERING A. G., a corporation incorporated under the laws of Germany, having its place of business in Berlin, Germany, hereinafter referred to as SCHERING A. G., and SCHERING CORPORATION, a corporation organized under the laws of the State of New Jersey, U. S. A., with its principal place of business located at 86 Orange Street, Bloomfield, New Jersey, hereinafter referred to as SCHERING CORP.

PREAMBLE

Schering A. G. is engaged in the development, manufacture, and/or sale of medicinal, pharmaceutical, biological, and bacteriological preparations. It is the owner of processes and formulae used in the production of such preparations and is also the owner of U. S. A. patents and patent applications pertaining to such preparations. For many years it has maintained and operated and still does maintain and operate laboratories to carry on research and development work in connection with such preparations, and has thereby acquired valuable scientific knowledge, data and material concerning the aforesaid sphere of activities. Schering Corp. has an organization suited for national distribution and promotion of such preparations in the United States of America, and is equipped to manufacture such preparations. It also maintains and operates laboratories to carry on research and development work in connection with such preparations, but has not acquired the extensive scientific knowledge and practical experience in this field that Schering A. G. commands by reason of its longer and more extensive research work and experience.

1. Schering Corp. has developed its business, name, and good will based on its prior dealings with Schering A. G. and, believing that in the future, with the scientific assistance and co-operation of Schering A. G. it can still further benefit itself, desires to enter into a firm agreement with Schering A. G., as hereinafter set forth.

1 Diethylstilboestrol and stilbestrol are the same.

2. Schering A. G. believing that its own interests will also be materially enhanced through the operations of Schering Corp. also desires to enter into such an agreement with Schering Corp. upon the terms hereinafter set forth.

Now, therefore, in consideration of the premises and of One Dollar and other good and valuable considerations by each of the parties to the other in hand paid, receipt of which is hereby acknowledged, it is mutually covenanted and agreed as follows:

ARTICLE I. DEFINITIONS

1. "Preparations" means medicinal, pharmaceutical, biological, and bacteriological products, but not chemicals and pharmaceutical chemicals as e. g. Camphor, Thymol, and Menthol.

2. "Selected preparations” means preparations selected by Schering Corp. for manufacture and/or sale or distribution by it in the U. S. A. as provided in Article II.

3. "U. S. A." and "United States of America" mean all the states of the United States of America together with Alaska, Hawaii, Guam, Porto Rico, Virgin Islands, and the Panama Canal Zone, but not the Philippine Islands.

4. "New preparations" means preparations which were not on any market as of January 1st, 1938.

5. "Dealt in" or “deal in” mean manufactured and/or sold or distributed either by Schering Corp, or Schering A. G. or both, as the case may be.

ARTICLE II. DESIGNATION OF SELECTED PREPARATIONS

1. (a) Within 90 days after January 1st, 1938, Schering A. G. shall deliver to Schering Corp. a full and complete list of the preparations then dealt in by Schering A. G.

(b) Within 6 months after receipt of such list Schering Corp, shall designate by a notice to Schering A. G. in writing, the preparations, contained in said list, which Schering Corp. elects to deal in under the terms of this agreement.

2. (a) Schering A. G. during the period of this agreement, shall notify Schering Corp. of any new preparations which Schering A. G. may produce or place on any market, together with the reasonable terms and conditions for dealing in such preparations in the U. S. A., not inconsistent with provisions of this agreement. At the time of giving such notice Schering A. G. shall also turn over and make available to Schering Corp. all essential details pertaining to such new preparation necessary to enable Schering Corp. to determine whether or not it will elect to deal in such new preparation under this agreement, and Schering A. G. shall also keep Schering Corp. advised and informed as to any further subsequent developments in connection with such new preparation. Such notice shall be given to Schering Corp. as soon as reasonably possible, but in any event not liter than by furnishing to Schering Corp. promptly upon publication the first price lists or catalogues in which such new preparations are listed.

(b) Within 18 months after receiving such notice of a new preparation, Schering Corp. shall notify Schering A. G. in writing whether or not it elects to deal in such preparation under the terms of this agreement. Schering Corp. shall not unnecessarily delay making its election, to the end that Schering A. G. may be informed thereof as soon as practicable. The failure of Schering Corp. to advise Schering A. G. as to its election concerning any particular preparation, within the time limited, shall be deemed an election by Schering Corp. not to deal in such preparation under this agreement.

(c) The provisions of subparagraph 2 (a) shall apply to any changes or additional improvements, inventions or discoveries of a substantial nature made or acquired by Schering A. G. with respect to any preparation while it is under consideration by Schering Corp. necessary for the purpose of making its election under subparagraph 2 (b), in which case said 18 months period shall be extended for a reasonable time to enable Schering Corp. to make its election.

(d) The provisions of subparagraph 2 (a) shall also apply to any changes or additional improvements, inventions or discoveries of a substantial nature made or acquired by Schering A. G. pertaining to any new preparation which Schering Corp. may have previously elected, under subparagraph 2 (b), not to deal in under this agreement and which are necessary to enable Schering Corp. to make its election with respect thereto. In this case, Schering Corp. shall have a further period of 6 months to elect, as provided in subparagraph 2 (b), but subject nevertheless to any committment that may have been made by Schering A. G. as to such new preparation after its said rejection by Schering Corp. whether or not to deal in such preparation under the terms of this agreement.

ARTICLE III. COVENANTS AS TO TRANSFERS ETC.

1. Upon the designation of any preparation as a selected preparation under Article II, Schering Corp. shall thereupon become vested with and entitled to, and Schering A. G. hereby grants to Schering Corp. the exclusive right, except as herein otherwise provided, to deal in such preparation in the U. S. A. together with the ownership of all U. S. A. patents and patent applications, and all processes, formulae, scientific data and information, and all rights, titles and privileges, pertaining to such preparation.

2. Schering A. G. in furtherance of the foregoing, hereby covenants and agrees that it will—

(a) without delay, deliver to Schering Corp. all processes, formulae, scientific data, working rules, and prescriptions pertaining to the manufacture of such selected preparation discovered or developed in the laboratories of Schering A. G. or which have been acquired by it from some other sources, all in such manner and with such explanations or demonstrations, including personal explanations or demonstrations, to representatives of Schering Corp. or any other assistance that may reasonably be required by Schering Corp. as will enable Schering Corp. to make use thereof as its own property in the U. S. A.;

(b) in like manner and from time to time to deliver and make known to Schering Corp. all subsequent changes or additional improvements, inventions, and discoveries, pertaining to a selected preparation which, during the period of this agreement, may be made or developed by Schering A. G. or acquired by it from other sources;

(c) transfer, set over, and assign to Schering Corp. all U. S. A. patents and patent applications owned by Schering A. G. and pertaining to such selected preparation, in such manner as to enable Schering Corp. to make free use thereof as its own property in the U. S. A., subject, nevertheless, to provisions hereinafter contained;

(d) in like manner from time to time to transfer, set over, and assign to Schering Corp. U. S. A. patents and patent applications pertaining to subsequent changes or additional improvements, discoveries, and inventions relative to selected preparations, which Schering A. G. has made or discovered or acquired from other sources.

3. Schering Corp. covenants and agrees that it will—

(a) without unnecessary delay make known and deliver to Schering A. G. all subsequent changes or additional improvements, inventions, and discoveries pertaining to selected preparations which, during the period of this agreement, may be made or developed by it or acquired by it from other sources;

(b) in like manner from time to time to transfer, set over, and assign to Schering A. G. all patents and patent applications, for any part of the world with the exception of the U. S. A. owned by Schering Corp. covering changes or additional improvements, inventions, and discoveries pertaining to selected preparations.

4. Schering A. G. shall be entitled to make use of the additional improvements, inventions, and discoveries and the patents and patent applications referred to in the preceding paragraph 3 (a) and (b), in all parts of the world except the U. S. A., as its own exclusive property; to that end Schering Corp. hereby grants to Schering A. G. with respect thereto a free transferable and exclusive license and covenants and agrees that it will, from time to time, as occasion may require, make, execute, and deliver any and all such assignments or other instruments, and shall also make available all pertinent processes, formulae, scientific data, working rules, and prescriptions, developed by it or acquired from other sources, all in such manner and with such explanations and demonstrations, including personal explanations and demonstrations to representatives of Schering A. G., or any other assistance that may be reasonably required by Schering A. G. in order to carry out the provisions of this paragraph.

5. The foregoing provisions of this article are in all respects subject to the provisions of Article IV.

6. It is recognized by the parties that Schering Corp. prior to the executions of this agreement was already dealing in certain preparations covered by various U. S. A. patents and patent applications and trademarks heretofore transferred

84949-44-pt. 10- -3

to it by Schering A. G. or its legal predecessor. If and to the extent that Schering Corp. shall elect to deal in such preparations pursuant to paragraph 1 of Article II hereof, it is understood and agreed that the said patents and patent applications, and trademarks as well as such preparations, shall in all respects be subject to and fall within the terms of this agreement without further transfer or retransfer of said patents or patent applications and trade-marks to Schering Corp. Schering A. G., if Schering Corp. elects pursuant to paragraph 1 of Article II to deal in said preparations, hereby reaffirms all prior transfers of said patents and patent applications and trade-marks with the same force and effect as if made by it pursuant to the terms of this agreement, anything hereinafter contained to the contrary notwithstanding.

ARTICLE IV. SCOPE OF ARTICLE III

1. The provisions of Article III insofar as they refer to patents and patent applications shall be deemed to include and apply to any patents and patent applications which for formal or legal reasons are not registered in the name of one of the parties but, e. g., are registered in the name of the inventor, but which equitably belong to one or the other of the parties hereto and which it is in a position to dispose of.

2. The provisions of Article III shall also apply to rights and privileges obtained by virtue of license or similar agreements under patents or patent applications owned by third parties and which do not come within the provisions of the preceding paragraph 1; that is to say that Schering A. G. shall grant to Schering Corp. all rights and privileges with respect to the U. S. A. which Schering A. G. has under and by virtue of any such license or agreement, and similarly Schering Corp. shall grant to Schering A. G. for all of the world except the U. S. A. all the rights and privileges which it has under any such license or similar agree ment.

3. The provisions of the paragraphs 3 and 4 of the preceding Article III shall also apply

(a) to all inventions and discoveries of Schering Corp. which pertain not only to the field of selected preparations but pertain to the general field of preparations and to all rights, titles, and benefits whatsoever that may be connected with such inventions and discoveries;

(b) to all inventions and discoveries together with all rights, titles, and benefits which may pertain to those inventions and discoveries which are or may be acquired by Schering Corp. from third parties, subject, however, to the provisions of the following paragraph 4.

4. (a) Schering Corp. in connection with its acquisition of the U. S. A. rights for any such inventions, discoveries, patents or patent applications, license or similar agreements, shall endeavor to the best of its ability to obtain for Schering A. G. world rights outside of the U. S. A. on not less favorable conditions for such world rights than for the U. S. A. rights, either in the form of an option or otherwise, but Schering Corp. shall not be required to assume or undertake any obligation, legal or financial, with respect to such world rights. Schering Corp. will endeavor to obtain the same period of time as set forth in paragraph 2 of Article II for Schering A. G. to elect whether or not to acquire such world rights, and in any event promptly will turn over or make available to Schering A. G. all essential details which it has and which are necessary to enable Schering A. G. to make its election.

(b) In the event that Schering A. G. shall refuse or for any reason fail to accept within a reasonable time any world rights offered or made available to it pursuant to the preceding subparagraph (a), Schering Corp. shall be free, subject to the provisions of paragraph 4 of Article V, to acquire such world rights for itself and to make full use thereof by manufacturing and selling thereunder, by granting licenses, or by exploiting or disposing thereof in any manner it may see fit. In any case in which Schering Corp. may acquire such world rights, whether pursuant to this subparagraph (b) or otherwise, it will before disposing of or making use of such world rights outside of the U. S. A., offer the world rights outside the U. S. A. to Schering A. G. in the same manner and spirit and subject to the same conditions as provided in paragraph 2 of Article II.

5. Nothing in Article III or this Article IV contained shall be construed so as to require either party to deliver or make known to the other or grant or confer any rights or privileges with respect to any information, scientific data or with