RCA Under Fire

With its vast collection of some 10,000 radio-TV manufacturing patent rights, Radio Corporation of America is in an enviable position: every one of its competitors pays RCA handsome royalties on just about every set they turn out. Though most of them are unhappy with the arrangement, they have been unable to do much about it. Last week the Justice Department decided to have a try, filed an antitrust suit in Manhattan's District Court.

The Government's suit did not accuse RCA of monopolizing actual manufacture of radio-TV sets. It was aimed at what Justice called RCA's "package licensing" system, under which manufacturers must buy the use of all the patents instead of selected ones. Said Assistant Attorney General Stanley Barnes: "We seek to create conditions under which RCA's competitors . . . compete with it ... from research laboratories to the end product."

Justice charged that the RCA patents were built up by agreements with "co-conspirators," A.T. & T., Bell Telephone Laboratories, Western Electric, General Electric and Westinghouse. It also charged that they all "harassed" other manufacturers with more than 250 patent suits in order to keep them in line.

RCA was quick to reply. It noted that the Government attacked its cross-licensing agreements in a 1930 monopoly suit that was withdrawn after RCA agreed to offer the patents to all its rivals on a royalty basis. In 1942 the Government went to court to get the earlier agreement revoked so it could sue all over again, but failed. Earlier this year the Justice Department joined General Electric in an attack on RCA's licensing arrangements, but the suit was dismissed.

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