R.C.A. Accused

Radio Record, Volume II, Issue 13, 23 November 1928, Page 29

R.C.A. Accused

Alleged Restraint of Trade.

Big Corporation's Reply.

PPE recent litigation against the Radio Corporation of America instituted by a number of American radio manufacturers, alleging a monopoly which restrains industry -and_ trade, has an important bearing on the radio trade in New Zealand, which is greatly dependent upon American radio set manufacturers for its stocks. Admitting the "cross-licensing" of radio transmission and reception patents, but contending that it was necessary to the progress of wireless communciation, the Radio Corporation of America and seven other corporations have filed with the United States Federal Trade Commission a brief renew: ing their motion for dismissal of the charge of creating a monopoly in restraint of trade, The brief was signed by John YW. Davis, for the American Telephone and Telegraph Company and the Western Electric Company; J. P. Cotton, Thurlow M. Gordon, and 4. B. Lambert, for the Radio Corporation of America; Darius BH. Peck, for the General Electric Company; Frederick H. Wood, for the Westinghouse Electric and Mannfacturing Company, and J. Harry Covington, for the United Fruit Company and Wireless Specialty Apparatus Company. Contending that Edward L. Smith, attorney for the commission, had failed to furnish proof of his charges, the reply stated that the cross-licensinzg charge and the allegation that the companies were working in conjunction with each other were not denied. Declares Action Would End Broadcasting. "HE brief filed by counsel for the commission apparently asks for eancellation of the cross-licenses," the reniy stated. "Tt? that is a serious request this is the gravest case that ever came before the commission. "It would close every broadcasting station in the country. It would make it impossible to build another. "It would stop the sale of every broadcast receiving set and of every tube for such a set now made by these respondents. . "It would stop the sale of every set manufactured by their twenty: five licensees under the patents of the respondents-and these constitute the bulk of all the receiving sets that are made to-day.

"It would paralyse the whole worldwide system of radio communication that centres in this country. "Tt would paralyse the whole ship-to-shore communication system of the Radio Cornoration. "It would wipe out an investment of hundreds of millions of dollars. "It would tear apart and destroy the whole basis of modern radio conmunication." Only proof as conyvineing as the proof submitted by the officers of the respondent companies, the brief stated, "could justify a step which would disrupt one of the major industries of the country." Efficiency is Vital Question. HE "vital question" in the proceedings, the brief declared, is one asked by the commission, which was characterised as going "straight to the heart of the entire case." The question was i"Could the respondent have operated with anything like the degree of efficiency with which they now operate in the ahsence of cross-licensing?" The respondent companies denied that communication "even approaching the present standard of efficiency was possible with any apparatus lawfully available prior to cross-licensing, or would be possible to-day without it." Assailing Mr. Smith’s brief as "not meeting the issue," the respondents said that the commission’s counsel "assumes that because a patent is deseribed in some such general terms as a ‘radio receiving device’ or a ‘radio signalling device’ it covers a complete system of radio transmission or reception, and that.a complete receiving or transmitting set of modern type could be manufactured by means of that patent." No , such omnibus patents exist in the art, the reply stated, adding that every radio receiving set and every radio transm ssion set contains a large number of devices, each having a wholly separate function, and that "even a single one of these numerous (dlevices may contain a dozen or more wholly different patented inventions which supplement eact other." The apparatus made by the eight companies-or those of them manu-facturing--"is the best the world knows how to build,’ the respondents concluded.