Patents for All

When Trustbuster Stanley Barnes took over in 1953, he promised to enforce the antitrust laws "absolutely." In 2 1/2 years he wound up 148 old cases, filed 118 new.

Last week, in one 24-hour period, Barnes announced his biggest bag to date: two industrial giants-American Telephone & Telegraph ($17 billion assets) and International Business Machines ($600 million assets)-signed consent decrees to end the suits against them.

The A.T.& T. case, said Barnes, was a major compromise." Seven years ago the Truman Administration charged AT&T (operating 98% of all long-distance phone service, 85% of all local service) with a conspiracy to monopolize" the U S phone business. Charged the Government:

A.T.& T. connived with Western Electric, its $1.6 billion-a-year manufacturing subsidiary, to buy some competitors, freeze put others, and systematically "suppress improvements and developments," e.g. the hand phone was developed in 1907 but was not introduced as standard equipment until 1927. Furthermore, A.T.& T. bought equipment solely from Western at inflated prices (on which it pocketed the profits) then went before public utilities commissions to plead for higher rates on the ground that equipment costs had risen.

The Government asked that A.T.& T. be forced to 1) divorce itself from Western Electric (which should be dissolved) 2) buy equipment by competitive bidding' 3)license its patents to all applicants.

Reasonable Rates." In the settlement Western Electric remained intact and undivorced from A.T.& T. Western agreed however, to sell Westrex, its $15 million-a-year subsidiary which manufactures movie sound equipment.

Western Electric may continue to make A.T.& T.'s equipment but at competitive prices and with "valid" cost-accounting methods that can be checked by public atilities authorites. Biggest concession-A.1.& T. agreed to license without fee all its existing 8,600 patents-from tiny transistors to the promising solar battery It would also make available all future patents at "reasonable rates."

"Major Victory." The next day Barnes crowed that he had won "a major victory," and this time he had. Four years ago the Government charged IBM-which produces 90% of all U.S. tabulating machinery-with trying to monopolize the business by 1) renting instead of selling its devices' 2) forcing lessees to use IBM repair men only, 3) denying users the right to experiment with the machines.

The company agreed to abandon its rental-only rule. Most important of all-IBM would make available at "a reasonable royalty" all its current patents and those it acquires in the field of electronics m the next five years.

With the freeing of all IBM and A.1 .& T. patents, the brave new world of electronics-in which both specialize-looked last week like the Oklatioma Territory on the eve of the grand land rush.

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