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A major plot element of Iron Man 2 is that the Department of Defense (presumably) is trying to seize his Iron Man suits, one of which they get their hands on via Colonel James Rhodes. However, the movie doesn't make clear what justification or law the DoD is doing this, considering that the suits are either the personal property of Tony Stark or the proprietary property of Stark Industries.

Does the original source for the movie or any extra material make this clearer?

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What authority did the Department of Defense have to seize Iron Man's suits?

Legally? None apparently.

As Pepper says when talking to (apparently a lawyer on the phone) when Tony visits her in her office..

It was an illegal seizure of trademark property.

and

Listen, it’s our position that Stark has and continues to maintain propriety ownership of the Mark II platform.

and then continues..

No… Burt… Burt… Burt, listen to me. Don’t tell me that we have the best patent lawyers in the country and then not let me pursue this.

From the final comment it sounds like the President is likely to consider the issue one of National Security and issue an Executive Order retrospectively making the seizure legal.

Well, then, tell the President to sign an order.

So, essentially, the government stole the Mk II suit and may be prepared to make it "legal" by Executive Order pending fighting it out in court.

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    I saw this scene in the movie, but it's probably the only answer there is until another one comes along expanding on the source material. – Prometheus Jun 7 at 20:06

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