Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-10-20
STANDARD DEFENDS
TITS OIL CONTRACTS
Many Complained Of in Fed
eraI Suits Have Expired,
Says Company's Reply.
BY the Associated Press

BY the Associated Pren.
CHICAGO, October 20.-Many con-
tracts complained of by the Govern
lnent in Its suit started last June
under the Sherman act against some
30 ell companies, expired long be-
fore the suit was hled, the Standard
Oil Company of Indiana set up in
it's answer today. The Texas Com"
Iany recently filed a general denial
OF the charges.
The licensing of one company TO
use the patents of another was the
losult of patents overlapping so that
scme companies were threatening
each other with infringement suits,
said the answer. To obviate that sit
nation. the answer set forth, it was
agreed to adjust the controversies for
use of gasoline cracking" patents
by licensing the companies, so-called
pooling agreements.
Asserts Law Was Obeyed.
They were not combinations in
restraint Of trade or commerce, as
charged by the Government, the
answer asserted but. on the cortrarv,
the Standard Oil Company Of In
diana has endcavored to and has
observed in letter and spirit the laws
Of the United States of America
The defendant company, according
10 the answer, owns % different,
valid. United States patents for the
cracking process. Early in its expert
ence in licensing other companies to
use its patents. the answer said, there
were restrictive clauses in the con-
tracts rs advised by its counsel for
the protection of its business. but all
contracts containing the restrictive
provision about which the Govern
ment complained expired more than
six years before fling the suit Its
licenses now, the company contended,
are wholly free of limitation as to
quantity of production, place of sale
or price
The Governments charge that the
cracked" gasoline was not patent
able was denied by the answer which
set UP that the cracked" gasoline
was something new and useful al
though in most characteristics SINH
lar TO the straight run" gasoline.
Refers to Canadian Deal.
The company believed that some of
tts licensees i'll using It's processes
have sold crack ed" gasoline in its
territory in violation of their agree
nlent in the contracts, but that 1t has
never enforced the contract provision.
After patenting its Burton crack
ing process" in the United States. the
company obtained a similar patent In
Canada, the answer said. AT that time
the Canadian Patent Act of 1906, ac-
cording to the answer, contained the
paragraph
IF after the expiration of IL months
from the granting of "A patent. or on
authorized extension of such period,
the patentee patentees i'm
port or cause to be imported into
Canada the invention for which the
patent is granted such patent shall
be void as to the interest of the per-
son or persons so importing or caus-
ing to be imported
Indiana Company Defendant.
Because of that legal restriction, a
corresponding restriction to protect
it's Canadian patents was inserted in
it's contracts, the answer set forth,
and that the said statute so in eff
feet at the time of the execution of
the said contract continued in full
force and effect in the Dominion Of
Canada until the LIST day of Septem-
Der, 1928; that no occasion has arisen
since September l, 1928, to modify
or TO change such contract and il,
accordingly, remains nominally in eff
feet as originally executed"
The answer denied that the Indiana
company is, OF has been. a party to
any pool or combination in restraint
of trade, or has made any contracts
restraining trade beyond it's lawful
rights under its patent. On the con-
trary. it averred the company has
voluntarily adopted the policy of eX-
tending it's patent rights as broadly
to others, thereby greatly increasing
the quantity of motor fuel produced
and maintaining prices much lower
than they would have been had it re-
served it's patented processes eX-
clusively to itself, as it might law
fully have done.