Evening star., 1932-03-08
r. c. A. CONTESTS ACTION.
Issues Statement Denying Restraint of
Trade


The following statement was issued
in New York today by the Radio Cor
poration of America;
I'VE are informed that the Govern
ment has filed an amended and supple
mental petition in its suit which has
been pending for some time in Della
ware against the Radio Corporation of
America and others because of alleged
restraints on competition in the radio
industry.
In its original petition the Govern
ment attacked the fundamental cross
licensing agreements by which the
Radio Corporation of America obtained
its rights to patents and to license other
manufacturing companies to use these
patents. 1t is the position of this cor
poration that those agreements are
legal, because without licensing of
patents none Of the companies, includ-
ing Radio Corporation of America,
could lawfully have manufactured or
sold efficient radio apparatus. Many
patents were required to make radio
devices and these patents were in scat
tered hands.
Trade Creation Claimed.
The patent cross-licensing contracts
made legally possible the nanufa cture
OF radio apparatus. They did not re-
strain trade-they created it. The con-
tracts were filed with the Department
OF Justice when they were executed and
they have been considered by succeed
ing Attorneys General They were in
vestigated for four years by the Federal
Trade Commission and the complaint
was dismissed.
The Radio Corporation of America
was organized in 1919 to develop the
radio art and to create a new business.
The rapid development of radio shows
that this was accomplished Not only
a great radio manufacturing industry
resulted, but broadcasting and interna-
tlonal radio communications as we'll.
Through broadcasting over $4,000. 900
radio listeners now receive programs
free and through international COM
munications the business community
OF America has direct international
telegraph service with more than 40
countries at rates which radio has
substantially lowered
Attack IL Years Late.
The attack of the Government came
II years after the arrangements it at
tscks were made. 1t takes little, II any,
account Of the difficulties surrounding
the men who made these arrangements
when they were made and the prob
lens which confronted them and which
then had to be solved. 1t would not
have been SO difficult to have modified
the fundamental arrangements if the
Government, when first appriSed of
them, had then stated its objections to
them. different situation obviously
arises IL years thereafter. 1t would be
impossible without destroying invest
ments made in good faith by more than
100000 shareholders to undo that
which has been done throughout IL
years of rapidly changing art and
industry.
Despite all this the position Of the
Radio Corporation of America when
this suit was filed was that if doubt re-
mained as to the legality of these con-
tracts the officers OF the corporation,
above all others. desired to know their
true status and they were quite willing
to have them submitted to the court to
the end that they might be tested. The
corporation has made available to the
Department Of Justice all its data, rec
ords and correspondence and has freely
permitted its files to be inspected by
representatives of the department.
Patent Pooling Case Cited.
The present suit was instituted after
the department had won a decision in
the lower court against certain gasoline
companies which had executed so-called
patent pooling agreements. After this
decision was reversed in 1881 by the
Supreme Court of the United States,
active negotiations we're had between
representatives of the defendants and OF
the Department Of Justice looking to-
ward a settlement of the radio litlga-
ton. In the course of these negotla-
ttonS the representatives of the Depart
ment of Justice pointed out in detail
| features of the existing situation to
which they took exception.
| While not agreeing with the depart
ment as to the validity Of its criticisms,
this corporation expressed its desire TO
cooperate by altering in so far as was
practicable the arrangements which the
department criticized. irrespective OF
how such arrangements might eventu-
ally be regarded by the courts should
the litigation be carried to final judg-
ment
In carrying out this program the
Radio Corporation is in course of with
drawing from participation in the Gen
eral Motors Radio Corporation, has
] changed its contractual relations with
the United Fruit Co., has amended Ger
tain of its information traffic agree