Diplomas

One good reason why the Temporary National Economic Committee has been unable to shake off its pseudonym of Monopoly Committee is that it has done a lot of talking about monopoly. Last week the committee was busy looking into the possibilities of patent monopoly. Chairman Joseph O'Mahoney and his conferees chose first to hear from the automobile industry, probably the most beneficent of all patent users. This astute stage-managing will make all the more pointed the conclusions from this week's quizzing of the glass industry, which the committee considers a bird of just the opposite color.

There are three methods of automotive patent use; one exemplified by Ford, another by Packard, the third by practically everybody else. Ford grants royalty-free license of its patents to anyone. Packard charges and pays royalties. Chrysler, General Motors and all other big manufacturers subscribe to the Automobile Manufacturers' Association's cross-licensing agreement, granting free interchange of all patents taken out before 1930.

President Edsel Ford explained his company's traditional aloofness with a 1903 anecdote: "My father inquired of one of the officers of the [A.M.A.] association if it were possible to join this association. ... He was told, I understand, he had best go out and manufacture some motor cars and gain a reputation and prove that he wasn't a fly-by-night. . . ."

President Alvan Macauley of Packard remarked: "We measured what we had against what the other fellows had and thought it [free-licensing] not worth while." Packard has collected some $4,000,000 in patent royalties in 30 years, paid out $550,000.

That patent monopoly has occasionally been used to the detriment of society, few would deny. Nor would many deny the basic worth of the 102-year-old U. S. patent concept--giving an inventor, who may have struggled for years, a 17-year monopoly on his idea. But there is evidence that invention is moving out of the garret and into the laboratories of Big Business. Packard's Macauley and General Motors' famed inventor, Charles F. Kettering, felt, however, that even in laboratories patents have value both as protection during the "shirt-losing" stage and as incentives. Said "Boss Ket": "The young fellows look on them just like diplomas."

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