Evening star., 1928-11-27
RADIO TUBE PRICE
DROP IS FORECAST
Supreme Courts Refusal to
Act in "CIause 8" Case
Ends Litigation.
BY MARTIN CODEL.

Refusal of the Supreme Court of the
United States to review the decision of
the lower courts in the famous Clause
9" radio tube litigation throws wide
open the field for the manufacture and
sale of vacuum tubes for radio receiving
sets.
The resulting competition in a mar
ket for some 100000 600 worth of annual
business may force down the price of
tubes, now on1 of the most expensive
items in set upkeep.
The Supreme Court made short Shrift
of the case, just as 1t did in deciding
the feedback circuit case in favcr of
DR.. Lee De Forest only few weeks
ago. 1t simply denied the writ Of GER
tiorari sought by the Radio Corpora
ton of America and affiliated COM
panies. This made final the September
decision of the Circuit Court Of Appeals
at Philadelphia, which upheld Judge
Hugh M Morris ruling of last Febru-
ary in the Federal District Court Of
Delaware.
Judge Morris held that the clause in
the patent license agreements between
the Radio Corporation Of America and
some 25 radio manufacturers providing
that they should initially install only
Radio Corporation Of America tubes in
the sets they produced was invalid be-
cause it violated the Clayton antitrust
act.
Decision Is Upheld.
The appeal taken to the Philadelphia
court upheld him, two to one. Five in
dependent tube makers sued to test the
Radio Corporation of Americas reStric-
tive clause, contending that it pre-
nf Oh
cent of all radio sets from equipping
those sets with tubes made by other
concerns. They complained that the
effect of the clause was to build a
monopoly of the tube business and re-
strain trade.
The Radio Corporation replied that
its license contracts were properly made
with the smaller manufacturers to cover
their use of its patents. 1t claimed
that 1t had established complete owner
ship of the audion tube, and that in
stead of insisting upon a monopoly 1t
had licensed the other manufacturers
to use the tubes.
The contention was also made by the
Radio Corporation of America counsel
that tubes of the Radio Corporation of
America manufacture were component
patented parts" of the sets manufac-
tured with its patents. This was denied
by Judge j. Warren Davis and Judge
Victor B. Woolley in their opinion in
the Philadelphia court. Judge Joseph
Burlington dissented, holding the Ra-
dio Corporation of America within its
rights in imposing the tube clause upon
the users of its patents.
Shortly after this decision a suspen-
sion of Clause 9" was declared, and
Immediately boom in the advertising
oVlro ~ ixa%a f,.IN
was observed. Radio Corporation off,
cials declared, however, that their busi-
ness in radiotronS and Cunningham
tubes did not suffer perceptibly by the
removal of the restriction.
Injunction Likely.
The immediate result of the case
will probably be the issuance of an in
junction permanently invalidating the
tube clause. This will represent COM
plete victory for the complainants, who
were Arthur d. Lord, as receiver for the
De Forest Radio Co.. the Northern
Electric Corporation, the Televocal Cor
poration and the Sonatron Tube Cor
poration.
On the other side were the Radio
Corporation of AmericA, General Elec-
trio Co., Westinghouse Co and Arieri-
can Telephone & Telegraph Co.
1t is expected that the Supreme
Courts action will preclude any neces-
sity for the Federal Trade Commission
to press it's tube complaint" entered
against the Radio Corporation of Amer
lea some months before the Philadel-
phia decision,
This charged violation both of the
Clayton and the Federal Trade Com
mission acts.
(Copyright, 1928. by North American
Newspaper Alliance)