Evening star., 1938-12-14
BY JOHN C.. HENRY.

oCAVAA4 HltO Vic CONtl0CtuAl re.
lationship between the dominant
Ovens Illinois and Hartford Empire
Cos. IN the glass container industry,
the Monopoly Committee learned
today that there has been q vir-
tuaI pooling by the two companies
OF patents, royalties, license fees,
prosecution responsibilities and
other factors involved In the i'm
portant patent picture Of the in
dustry.
In effect Owens turned over most
Of its patent developments 10 Hart
ford for exploitation. BY series of
contracts between 1924 and 1885
Owens retained veto power" over
future issuance of licenses by Hart
ford, received royalty free use of
40 units Of Hartford's Owen pat
ented machinery and 4 share of
Hartford's income from other IL
censes and royalties.
Although the lapsing Of these con-
tracts has brought a changed rela-
tionshfp between the two companies
since 1895, the motivation of Owens
IN participating in such a policy was
indicated by memorandum. pro-
duced by the Justice Department
today, signed by w. E. L., the ini-
uals OF William E. Lewis. president
of Owens.
Says Liens Have Changed.
One paragraph Of the memo fol-
lows:
Our negotiations with Hartford
Empire Co. and others, 50 far as our
patent situation and royalty income
is concerned, should be to attempt
to secure position whereby we pay
no royalty on any item we produce
and We attempt to force all others to
pay royalty on every item they pro-
duce, We participating with any one
else in the royalties they receive"
Mr.. Lewis. on the stand today,
identified the memorandum but en-
phaSized that his views have
changed since it was written q num-
Der of years ago.
The veto power held by Owens
was surrendered before the second
OF the contracts was signed in 1892
out OF consideration for a condition
of general revolt" against Hart
ford by others of its licensees who
sought extensions of their licenses.
Lengthy procedure attendant on
obtaining patent action, followed by
years OF litigation to establish sole
ownership, has left Hartford Empire
In position where it apparently
may continue its domination of the
glass container manufacturing in
dustry until 1854 at least, informa-
ton laid before the committee
discloSes.
In 1914 the Hartford Empire Co.
filed application for a patent on the
heated-hood process, a basic part
OF the "gob-feed" method of pro-
ducing glass containers. For some
II years the application was tied up
in the Patent Once by "interfer-
ences" with other claims. Court
action was initiated In 1925, with a
decision favorable to Hartford EN-
pire finally being received in 1896
The patent was issued in 1887 and
will run until 1854.
Two Firms Dominant.
1t Is principally on the basis of
this patent, it has been shown, that
Hartford-Empire controls machinery
by which 81 per cent of the indus
try's output is produced. Cross
licensing agreements, involving this
patent, with Owens Illinois, bring
another 20 per cent of the industrys
production under this two-company
control.
That this circumstance has
aroused a question in the minds of
the committee as to wisdom of the
exclusive rights aspect of our patent
system was indicated after yester-
days committee session by Senator
OMahoney. Democrat, OF Wyoming,
the committee chairman.
The striking thing to me-" he
said, "is the demonstration that
Congress, to which under the Con-
stitution was delegated the power
to regulate commerce among the
States, has by the patent law dele
gated to any group that chooses to
use the patent law in the way that
1t can be used, the power to regulate
commerce in any industry"