PATENT RIGHTS AND MONOPOLY.

New Zealand Herald, Volume XLVIII, Issue 14629, 15 March 1911, Page 6

PATENT RIGHTS AND MONOPOLY.

Among the "trust" prosecutions recently instituted by the United States Federal Department of Justice is that of the so-called bath-tub trust." The evidence presented by the Government in this case discloses an apparent attempt to use the monopoly granted by the patent laws as a screen for an illegal monopolistic combination. Under American patent laws as interpreted by the iourts it is unquestioned that a patentee may fix the price at which the patented article is sold. It is also a debatable question whether several owners of dfferent patents on different parts of an/article may legally pool their patents for fee purpose of controlling the price at wiich the completed article is to be sold. / But in the "bath-tub" caee the patent,/which is used as a device to justify a conbination for the purpose of fixing prices ind eliminating competition, is a patent/not upon ■the article manufactured by thf 1 combination, but upon an insignificant tool used in its manufacture. The pr/secution is brought against 16 corporatwis engaged in the manufacture of all kink of enamelled ironware used in the numbing of a house, such as bath-tubs, w*h-basins, kitchen sinks, etc. The New York Outlook explains that the principal component of these articles is cast iron/ The cast iron article is taken red hot £om the furnace, and in that condition th/e is sifted upon it a " porcelain powder the ingredients of which are secret. lie combination ofi the powder with the ed-hot iron forms the completed enamella product. Twenty manufacturers engagfl in the business have an annual outpij of over £3,000,000. Two of three of th/companies manufacturing the enamelle/ware own patents on different forms of/ simple tool used in the manufacture offhe ware. Under the old method of manufacture, the "porcelain powder" applied to the tub by an operator who/eld the sieve containing the powder in p® hand and tapped the handle of the ive with the other. The patents are for/liffe>rerit forms of an automatic tapper /> ncealed in the handle of the sieve. #rly last year, after a long series of conirences among tho different manufacture/ of the enamelled ware, the patents on ifa little tool were assigned to a young ma, apparently without capital, named Wamouth. Immediately thereupon this pung man granted a license to each of tp manufacturing companies for the use oftlese patents, under a contract which defetnined the prices at which the manufactin? l ' should sell the completed enamelled^ product, and all the terms and condii ons of sale, which prescribed the fornf°f contract under which the manufac* rer should sell to the jobber, and the, ,r ' at which the jobber should resell, fid which provided that no manufacture' should sell to any jobber who handle independent goods, or who refused' B 'K n a contract. Severe penalties were/ re scribed for, failure to live up to the trms of this license agreement. Comply/ control of wholesale, jobbing, and retfi prices of the enamelled ware was the'result. A civil suit against the 16 m} iufacturers was instituted in July of jg£ year, and a criminal proceeding was i©reupon instituted against j the 16 comInies and 34 officers of those companies, late in December the defendants offered jo consent to an injunction in the civil suit, and to plead guilty in the criminal /suits, provided the Attorney-General would not ask the Court to impose gaol sentences. This request it was impossible for the Attorney-General to .grant, and both civil and criminal suits are being vigorously prosecuted. M