TRUST "TYRANNY"

Radio Record, Volume I, Issue 37, 6 April 1928, Page 16

TRUST "TYRANNY"

U.S.A. SENATE INQUIRY SERLOUS AI ,.LEGATIONS. Allegations that a ‘‘radio trust’? was endeavouring to force independen’ compctiturs out of, business or absorb them, were made by witnesses for the Radio Protective Association of Chicago ac a hearing by the United States Senate Patents Committee at Washington on February 9, on the Dill Bill for forfeiture of palit rights m case of conviction under the anti-trust laws. he witnesses, led by Ernest -Reichman, counsel for: the association, arzued chiefly against the patent grouping by the Radio Corporation of America, which they said amounted to a virtual monopoly, particularly regardmg the vacuum tube trade. ‘ Manton Davis, general counsel for the Radio Corporation of Anierica, outlined the position his concern would take when the heatings are resumed on February 20. ;

"The criticised ugreements,’? he said, ‘were created by independeut groups. There was no possibility of a radio industry until cross-licensing patents permitted lawful making of radio apparatus. Far from these devices restraining trade, they took the restraints off that made it possible." Tells of De Forest Plight. Arthur D. Lord, receiver for the De Forest Radio Company, said law-suits, directed mainly against this company, had cost it 342,000. dollars (£68,000) to protect its rights. He said the patents of the Radio Corporation were mostly "on refinements,’ and "are being used as a bludgeon over the independents." No fundamental patents are held by the Radio Corporation, he _ testified, that have to do with the audion tube, which, he said, was invented in 1906 by Lee De Forest. "There is no patent in existence today on the tube itself,’ he said. ‘All have run out, The great array of refinements the Radio Corporation of America displays are simply refinements on construction."

Pressure on the De [forest company, Mr. Lord asserted, forced it to cease operations. He charged the Radio Corporation with putting spies in the De [Torest plant. [lis argument was directed principally against the patent license agrcements whereby manufacturers licensed to nse Radio Corpotation patents must equip their recciyug scts with tubes distributed by that concern, He said that 95 per cent. of the sets sold to-day were so limited. The De Forest Company's bona-fide distributors had dwindled from 166 a year ago to only twelve on February 1 last, and relief had to be sought itt the Courts, Mr. Lord said. On Tebru« aty 6, he said, Judge Hugh M. Morris, in United States District Court at Wilmington, directed a permanent injunction against the enforcement of "Clause 9" of its patent license agteements by the Radio Corporation. This clause related specifically to the equipment of licensed radio sets with particular kinds of tubes. +

Company’s Trade Dwindled. George M. Salkcld, rcpresenting, thie Televocal Company of New York and the Independent Vube Company, said the latter concern had sold its entire output of tubes ap to the time of the Chicago Radio Show. It had a plant operating with 100 employees, he said. When the Radio Corporation of America entered into iis patent license agrec« ments with twenty-five independent manufacturers, who agiced to clause 9, the business was cut down to a fraction of its former size, he said. fdward K. Nockels, secretary of the Chicago Federation of Labour and general manager of station WCIL, Chicago, told the committce that concentration of patents ‘defeated the constilutional purpose of the putent ‘ws.’ — Bred S. Armpirong, president of the Mellotron ‘Lube Corporation of Chicago and treasurer of the Radio Protective Association, said that euforcement of the ‘illegal tube clause" had compelled his company to stop operations. As a formcr employee of the General Ilectric Company, he said that company had built up a "paper patent sicmation"’ to use as a club over independent manu. facturers. Oswald F, Schuette, of Chicago, executive seerctary of the Radio Protective Association, appeared recently before the Llouse Merchanr Marine Comnuttee ou the White Radio Comunission Bill. "Congress thinks that it controls the air and that, through the [ederai Kadio Commission, it can allocate wayelengths and determine who shall use them," he said. ‘But before the licenses of these wavelengths cai operate on the channeis that you give them, they must first go to the radio trust for a license to use them."