Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-28
POOLING OF RADIO
PATENTS IS URGED
Auto and Aviation Industries
Cited as Instances of
Monopoly Solution.
BY MARTIN CODEL.


Lower production costs, with the
benefit accruing to the public In the
form. of cheaper sets, tubes and parts,
would be realized If the radio industry
would profit by the example of the
automotive and aeronautical industry
and combine its patents in single
large pool to make them available to all
manufacturers or prospective manufac-
turers of radio equipment.
This solution of the alleged patent
monopoly in the radio trade was offered
by Oswald Schuette, secretary OF the
Radio Protective Association, testifying
before the Senate committee investigat-
ing the radio industry, as the first phase
Of its deliberations on the CouZenS bill
TO establish a Federal communications
commission.
The patent monopoly under flre was
that said to be represented by pooling
Of the inventions held by the General
Electric, Westinghouse, American Tele-
phone e. Telegraph and other COM
panies with those of the Radio Corpora
ton of America. The latter concern
licenses other makers OF radio products
to use these patents upon payment OF
royalties. 1t was asserted that the
royalties thus collected are inevitably
passed on to the consumer.
Such a combination of patents. Mr..
Schuette said, was as much a restraint
of trade as combination OF capital to
violate the antitrust laws. Pooling the
patents has made for monopoly, he
said, and one giant organization has
been able to dominate and dictate to
the whole radio industry. Since pat
ent by its very nature Is monopoly,
Mr.. Schuette's charges opened up ex-
tensive discussion among the Senators
concerning the Governments duty to
curb giant monopolies that might be
formed by their combination.
1t was pointed out that the automo-
bile manufacturers, after long and UNI
happy experience with patent troubles,
joined in pooling Of patents under
auspices Of the National Automobile
Chamber Of Commerce. Reciprocity is
the rule on ordinary patents. Royalties
must be paid to the pool. which in turn
pays the inventor, on patents Of q revo-
lutionary character. According to Mr..
Schuette, Chrysler was able to enter the
automotive field as virtual newcomer
and avail himself Of all the patents In
the pool.
Several months ago similar patent
interchange program was drawn up by
leading aircraft manufacturers, largely
under the auspices Of the Government.
It was said such combinations are sane
toned by the Department of Justice.
Mr.. Schuette Is authority for the state
ment that the exchange of patents be-
tween automotive manufacturers have
put that industry 10 years ahead of
where 1t might have been had litigation
continued unrestrained.
Mr.. Schuette's story Of patent woes
was not a new one to Senator James
AIz - ~G~~t
former partner of Henry Ford in the
automobile industry. For many years
the Ford Co., in which Senator Cou-
Gems became a millionaire before his
entrance into public life, was en-
broiled in bitter patent suits. Mr..
Schuette'S association represents some
90 small manufacturers Of radio equip
ment. producing mainly receiving sets,
tubes and accessories.
Most of the large set and tube pro-
ducers are operating under patent
licenses from the Radio Corporation of
America Such licensees as Atwater
Kent, Crosley. Grigsby- Grrnow. Zenith
and holster produce and market their
products in direct competition with the
1icenser or Radio Corporation. Danger
was seen by certain Senators, in fact,
that these companies must resort some
times to the National Broadcasting Co.,
SO per cent owned by the Radio Cor
poration. for national broadcasting ad.
vertising.
The views of these licensees. never
before aired before congressional COM
mittee, will shortly be sought by the
Senate committee. At least two of
them, Atwater Kent and the Grigsby-
Grunow Co., do nearly as large
business in radio sets as the Radio
Corporation itself. Although the figures
are not public, it is freely asserted in
the trade that one of them paid royal
ties in excess of $1,000, 900 last year.
Copyright, 1929, by North American News
paper Allance.)