THE PATENT TANGLE

Radio Record, Volume I, Issue 21, 9 December 1927, Page 3

THE PATENT TANGLE

WHAT WILL THE END BE? POOLING SUGGHSTED. An article with a special appeal fo New Zealand listeners, in view of the. prospective position arising here in|] relation to patents, appeared in a xecent issue of ‘Radio Retailing’? :- So far," it said, ‘in the neighbourhood of 5600 patents have been taken out in America on radio apparatus. Obviously so great ‘a number of patents inescapably involves the radio industry in a maze of embarrassing e1tanglements. For the mass of claims overlap, conflict, and infringe cach other like a heap'of jack straws, until no mat can see the way out, save through an interminable _ litigation that, if not avoided, will inflict partial patalysis upon the progress of the radio industry for years to come. "Therefore, the subject of crosslicensing of patents is drawing steadily to the front. ‘She Nema Radio Division is studying it. The R.M.A. has a committee at work. It is the topic of discussion everywhere, And the discussion is impelled by a gathering storm of patent litigation that is already beginning to whip the trade relations of a rapidly increasing number of radio manufacturers and jobbers aud dealers into a _ state of pandemouium. "Cross-licensing of patents at first thought appears a ponderous problem. As a matter of fact it is utterly simple, as witness the experience.o° the automotive industry, in which there is a wealth of guidance, if the radio man will but consult it. Patent litigation followed the same devastating caurse there, also, uutil the manufacturers of automobiles had wound each other up into a sweating, struggling mass bound round with the red-tape -_judicial decrees and. inhibitions. ‘ Reason and leadership finally conquered, and these strangling patent restrictions were all thrown into a pot, free for use by anyone who joined the pool and paid the royalties to the owner of the patent that he used. "As a result it is conceded that there are to-day probably twice as many cats at work on double the mileage of lard roads as could have been possible with everybody’s patent obstructing everybody else’s. And the automotive industry is ten years ahead. | "Cross-licensing is simply a busitiess arrangement between a group of manufacturers to do away with litigation over patents, and permit its mentbers to manufacture goods for the market, rather than try law suits against each other. It will entail a frank decision as to whether the executives of the radio industry are to devote their best hours and energies and intellects to the development and marketing of radio equipment, or to conduct the incessant oftensive and defensive warfare among themselves. For in the present overburdened condition of our Courts the original trial in a patent suit is not called inside of two years, and from four to seveti years of planning and prosecution elapse Lefore the possibilities of legal action are exhausted. "What price law suits? ‘Naturally, in the early stages of the discussion of cross-licensing in any industry, there is always an apparent split between the interests of large and small manufacturers. But experience has shown that the cost of patent sharing is less than the cost of patent litigation. And the large company that contributes a large proportion of patents is more than compensated by its larger participation in eee

the increased progress and prosperity of the industry, and by its larger relief from the sapping burden of litigation expense. And so it will be in the radio in. dustry, when the large and the small sit down together to accept joint responsibility for protecting the public against this growing artificial and uneconomic tax. For the high cost of patent suits will be supet-imposed on the price of radio equipment tniless something is soon done about it."