New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-11-19
DEALS MORTAL BLOW
TO BATHTUB TRUST
Supreme Court Holds License.
Agreements" Illegal as IN
Restraint of Trade.
DECISION OF GREAT IMPORT
Will Affect Investigations Now
Under Way and Antitrust
Suits Already Filed by
the Government.

Washington, Nov. ls-In an epoch
making decision in the bathtub trust case
the Supreme Court OF the United States
laid down to-day the broad principle that
there can be no monopoly in the I'M
patented product of a patented machihe
without violating the Sherman ANTITRUST
law. Justice McKenna delivered the
unanimous opinion of the court.
In accordance with this doctrine, the
court struck down as Illegal the license
agreements" by which manufacturers oil
IS per cent of the sanitary enamelled IRON
ware in the United States were bound TO-
gether in combination. The license agree
ments allowed the manufacturers TO use
q patented dredger only on condition that
they would abide by an attached price lst'
would not sell to jobbers who bought from
independents, would not sell in certain
territory and would not sell seconds
Oncials of the Department Of Justice
were elated over the decision, which, II IS
asserted, will have an important bearing
on several investigations now under way.
as well as antitrust suits already filed
against the moving picture trust and thc
United Shoe Machinery Company.
Decision Nitally Important.
The decision II regarded as vitality i'm
portant because of the governments
claim that the patent license agreement
plan was being adopted by many concerns
as a result Of the judicial ban on the
pure trust" plan. as exempliied in the
case Of the Standard Oil Company OF
ohio: the holding company plan, as de-
clared invalid in the Northern Securities
case, and the combination Of a holding
company and a manufacturing company
a. shown in the Standard Oil and Tobacco
cases.
Justice MCKenna declared in his opinion
that the effect Of the agreements was to
convert independent and competitive COM
panies into combination subjected 10
rules and regulations The trade was
practically controlled from producer to
consumer" said he. and the potency OF
the scheme was established by the CO.
operation of s. per cent of the manu-
fscturers, and their fidelity 10 it was Sc
cured not only by trade advantages, but
by what was practically pecuniary pen
atty. not inaptly termed in the argument
cash bail"
To-day's decision suStains the decree of
the United States District Court for Mary
land dbTogating the license agreement"
and paves the way for the retrial of the
criminal suit against the bathtub trust,
the first trial of which, in Detroit, a few
months ago, resulted in a disagreement Of
the jury Attorney General Wickersham
postponed the retrial Until the issues in
the civil suit were decided by the Supreme
Court
Edwin p. Grosvenor, special assistant to
the Attorney General who prosecuted
Court, said tonight:
The economic effect of the prosecution
by Attorney General Wickersham is in
teresting The combination began opera
lions in June, 1910. At once complaints
poured In to the Department of Justice.
The Attorney General began proceedings
in July, 1910 Since the combination was
broken up the prices Of the product have
fallen from % TO 40 per cent, yet to-day
nearly all Of the manufacturers engaged
in the business are running their factories
ONeTtlults anu lllcg dAt alA AiiohiAlb blOiACS
at the reduced prices prevailing in this
period OF competition"
The agreements" said Justice Nc
Kenna, clearly transcend what was nee
essary to protect the use Of the patent
or the monopoly which the law conferred
upon il. They accomplished restraint
OF trade condemned by the Sherman law"
The Justice said there was nothing in
the mimeograph case of last year which
contravened the views he was expressing.
adding:
The added element Of the patent in the
case at bar cannot confer immunity.
Rights conferred by patents are indeed
very definite and extensive, but they
do not, any more than other rights, give
a universal license against positive pro-
hibitions. The Sherman law is a limita-
ton of rghts-rights Which may be
pushed to evil consequences and therefore
are restrained"
The Supreme Court took recess to-day
until December 2