Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-25
PATENT ROYALTIES
FORCE PAID TAXES
Issue Is One of Most Formi.
dabIe in United States
Court Trial.
BY MARTIN CODEL.

One Of the most aggravating features
Of the radio patent situation is the fac;
that many independent manufacturers
must pay patent royalties not only to
the Radio Corporation Of America
whose hold on something more than
1000 patents Is now being tested under
the antitrust laws, but to various other
patent holding groups.
While the r. c. A., largely by virtue
Of its patent cross-licensing arrange
ments with General Electric, Westing-
house and A. T. g. T., is the largest
patent holder and exacts he largest
royalty-71a per cent on the production
of its icensees-there are at least six
other licensorS of major importance
Each collects a royalty, usually a per-
centage on production. from those 1t
licenses to use its patents.
Many in r. C. A. Group.
OF 90 manufacturers Of radio and
of the r. c. A. group, according to
Radio Retailing. Twenty-Five are Ii
censed to use the patents of the Hazel
tine group and 20 hold licenses for the
Lektophone patents. Jones Technodyne
has licensees, Radio Frequency Labor
atories S, Dublier 4, and Magnavox 8.
A company like Grigsby- Grunow, for
example, pays royalties to r. G. A.,
Lektophone, Radio Frequency Labora-
tories and Dublier, and must now pay
also to Magnavox, which recently won
Grigsby was constrained to declare be-
fore the Senate committee on inter-
state commerce that the radio patent
| situation was becoming intolerable, rep
! reSenting an item Of initial overhead
that made it extremely difficult for any
| independent maker Of radio sets to
operate at a profit.
A general pooling Of patents along
the lines of the patent pools of the au-
formative and aeronautic industries has
! frequently been recommended. Indeed
this has been one of the major efforts
Of the Radio Manufacturers Associa-
ton. While some of the smaller patent
holders have indicated their willing
ness, the r. G. A. and It's aff1liated COM
panies have never agreed. because OF
their conviction that they would sacri-
fee their hold on the dominant patents
In the industry and gain relatively little
In return.
Would End Pools.
On the other hand. 1t Is argued In
| 1dfOT VI u pdtcIiI pun tIiht u 1dlI IL
cense for the blanket use of all patents
could thus be charged, each contributor
to the pool drawing fair share for his
patents. This would avoid the mass oil
litigation over contested patent claims
that has marked the radio industry for
decade. Naturally the companies with
little or no laboratory and research
facilities favor the patent pool scheme
Many other supporters point out that
1t would mean Q saving In manufactur-
ing costs that could be passed on to the
| consumer.
It is q highly complicated situation
and one that calls for the highest form
Of craftsmanship and diplomacy, yet nc
leader has arisen in the radio industry
to drag 1t out Of its patent morass
Victory for the Government in its fight
to break up the patent pool of the r
c. A. may force q cooperative pooling
Of patents in the radio industry. But
until such an eventuality it Is fore
gone certainty that r. G. A., Hazeltine
Lektophone, Dublier and the other pat
ent groups alike will resist any effort
to make them throw their inventive
products into pool from which any
| and AL may derive their technique.