Agreement on Patents Not to Be Renewed

Fifteen Year Exchange of Licenses Between General Electric and Westinghouse Companies Expires.

The fifteen years’ agreement for pooling and joint use of patents owned by the General Electric Company and the Westinghouse Electric and Manufacturing Company, which expired on April 30, will not be renewed.

While the officials of the company do not say that renewal is held in abeyance on account of litigation in which the companies are involved or because of the recent decisions by the Supreme Court in the Standard Oil and American Tobacco cases, persons familiar with the operations of the companies and the terms of the agreement yesterday stated that that is the case.

Although the agreement by which there was to be an exchange of overlapping patents has now expired, each company still retains licenses of the other, which will expire with the patents thus covered.

At the time the agreement was made it was found that both companies held patents the claims of which overlapped, and that each was therefore in danger of patent litigation. To avoid this it would be necessary for the companies’ engineers to sacrifice many details which approached the line of demarcation between the patents in question, so that neither company enjoyed its full patent rights and the industry as a whole was handicapped.

Many of the important patents covered by the agreement have since expired, although many others, such as those covering the incandescent lamp, are still in force. The Board of Patent Control, comprising representatives of both companies, went out of existence with the expiration of the agreement, but either company may grant licenses to the other if similar conditions obtain again.

The General Electric Company owns the rights for the United States under patents covering Curtis steam turbine engines. It co-operates with the American Locomotive Company in building electric locomotives. The Westinghouse Electric and Manufacturing Company owns exclusive rights to Tesla patents on alternating current.

There have been reports from time to time that the General Electric and Westinghouse companies were to merge, but these reports have been consistently denied by officers of both companies. The Attorney General, George W. Wickersham, on March 3 filed suit against the General Electric Company, National Electric Lamp Company and about thirty other companies, including the Westinghouse Electric and Manufacturing Company, in the United States Circuit Court at Cleveland, Ohio, declaring there was violation of the Sherman Anti-Trust law.

The specific charge is that the National Electric Lamp Company, which, it is stated, controls 97 per cent of the business, was promoted by the defendants for the purpose of monopolizing the manufacture, sale and prices in carbon filament electric incandescent lamps. The action, it was stated, was more or less in the nature of a test case to determine how far the patent laws of the United States may be construed to protect monopolies.