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COMMISSION ON COMMUNICATIONS

FRIDAY, MAY 24, 1929

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C.

The committee met, pursuant to adjournment on yesterday, at 10.30 a. m., in room 412, Senate Office Building, Senator James Couzens, presiding.

Present: Senators Couzens (chairman), Sackett, Brookhart, Kean, Dill, Wheeler, and Wagner.

The CHAIRMAN. The committee will be in order. We have Colonel McMullen, of the War Department, with us this morning. Colonel McMullen, kindly state your full name and position so that we may have it for the record.

STATEMENT OF COL. J. I. MCMULLEN, IN CHARGE OF PATENT WORK, JUDGE ADVOCATE GENERAL'S OFFICE, WAR DEPARTMENT, WASHINGTON, D. C.

The CHAIRMAN. I think Senator Dill has some questions he wishes. to propound to you, Colonel McMullen.

Senator DILL. I want to ask you, first, if you know anything about the litigation affecting the Von Bronck patent as compared to the Alexanderson patent.

Colonel MCMULLEN. Yes, sir.

Senator DILL. Will you please tell us what you know about that? Colonel MCMULLEN. Well, that patent was litigated in a sort of left-handed way in New York, and the Alexanderson patent was given priority over the Schlomilk & Von Bronck patent. The Von Bronck patent was litigated up to the Supreme Court in Canada, where it was decied that it had priority.

Senator DILL. In Canada it went to the highest court?
Colonel MCMULLEN. Yes, sir.

Senator DILL. But the litigation in this country was never carried beyond the United States district court?

Colonel MCMULLEN. No, sir. It was a more or less informal proceeding. It was not really a litigation on the question of the Schlomilk & Von Bronck patent.

Senator DILL. What is the Schlomilk & Von Bronck patent?

Colonel MCMULLEN. Well, it is called amplification of tuned radio frequency. It is a circuit

Senator DILL (interposing). Is it similar to the Alexanderson patent?

Colonel MCMULLEN. Well, it is similar, I should say. While it is different, yet patentably it is more or less the same—I mean from a patent standpoint.

Senator DILL. How did this Government get it?

Colonel MCMULLEN. We seized the patent immediately succeeding the armistice, I should say about January, 1919, or it may have been in December, 1918.

Senator DILL. What was the nature of the proceeding in New York? You say it was not a regular case, explain it.

Colonel MCMULLEN. It is my recollection, or rather it was my impression at the time, that the suit was a rather put-up job.

The CHAIRMAN. In order to have the patent validated?

Colonel McMULLEN. Yes; in order to have the Alexanderson patent validated over the other one was the way it looked to me. Senator DILL. Who were the parties to that suit.

Colonel McMULLEN. Well, I think the General Electric Co., or the Radio Corporation of America, on one side, but I have forgotten exactly; and it was some dealer, on the other side. It was a suit brought against some dealer in radio sets.

Senator DILL. Did the Government intervene in that case?
Colonel MCMULLEN. I think not.

Senator DILL. Was there anybody present representing the Von Bronck patent?

Colonel McMULLEN. I do not think so. I will say that there is a case pending out in Los Angeles now, in which the same question is involved, and in which the Government has not intervened.

Senator DILL. Yes; I know about that. And I wrote a letter to the Secretary of the Navy last winter calling attention to that situation, and urging that the Government intervene, but no action. has been taken, as I understand the situation.

Colonel MCMULLEN. I think the present Attorney General has a different idea about that. But there has been a pretty well-established idea in the Department of Justice, for a number of years, at least, that the Government as such has no right to maintain a monopoly of a patent. But I think they have changed their mind, because they raised the question about a year ago, and passed it around to all of the departments; and the departments were unanimous that the Government did have the right to maintain monopoly rights in a patent; and I think they almost unanimously recommended that such action be taken where the Government owns patents-and, as of course you know, the Government owns a lot of very important patents.

Senator DILL. In connection with what?

Colonel MCMULLEN. Particularly in radio, and other patents, too. Senator DILL. You have been handling cases that grew out of the war?

Colonel MCMULLEN. Yes, sir.

Senator DILL. What are those cases?

Colonel MCMULLEN. Well, of course, I have been working, right now I mean, on a settlement of the German patents that were seized and that licenses were taken under, or that were used; and they include the Telefunken group of patents on radio.

Senator DILL. How many of them were there?

Colonel MCMULLEN. There were 187, but when you come to wipe out the various technical things it boils down to about 110 or 112 patents altogether.

Senator DILL. What is the nature of those patents?

Colonel MCMULLEN. They cover the entire field of radio communication, both receiving and transmission.

Senator DILL. And you spoke of settlements, with whom?

Colonel McMULLEN. With the German nationals-or, with the Telefunken company, and the matter is now under the war claims act, and it is before the war claims arbiter.

Senator DILL. Have those cases been before the court?

Colonel MCMULLEN. No; the arbiter is the final court in the settlement of those cases so far as the United States is concerned, and so far as those cases in fact are concerned. It is for compensation for those patents.

Senator DILL. Have settlements been made in any of the cases? Colonel MCMULLEN. No, sir; none has been made yet. I might also say that all of the patents do not belong to the Telefunken company; there are a good many individuals in the group of patents. Senator DILL. Have you made a study of the question of priority between the Schlomilk & Von Bronck patent and the Alexanderson patent?

Colonel MCMULLEN. Yes, sir; two or three years ago I did.
Senator DILL. What was your conclusion about it?

Colonel MCMULLEN. Well, my conclusion was that the Schlomilk & Von Bronck patent anticipate the Alexanderson patent. However, that would depend on the attitude of the court in accepting certain things as evidence. If they would accept certain evidence I think there would be no doubt about it. But, of course, you never know what a court is going to do about accepting evidence.

Senator BROOKHART. What is the character of the evidence that you refer to?

Colonel MCMULLEN. Sketches, drawings, and so forth, that we have and that were made by Schlomilk & Von Bronck.

Senator BROOKHART. Those are always competent evidence in determining the history of a patent, are they not?

Colonel MCMULLEN. If they are properly proved, yes.

Senator BROOKHART. Certainly, if they are properly identified. Colonel McMULLEN. Yes, sir. But there is some question about the identity of these sketches and drawings, just as there was in the de Forrest case in the feed back service; where he hae sketches, and so forth, which were not dated or witnessed, but which on his unsupported testimony he said were made at such and such a date.

Senator DILL. If these Von Bronck patents were declared prior to the Alexanderson patent, what would be the effect as to the Government's control over the manufacture of radio apparatus?

Colonel McMULLEN. Well, in that event of course the Government would have the upper hand. They have the upper hand now in a great many patents, but they do not use them.

Senator DILL. Do you say they have patents that they could license to manufacturers?

Colonel McMULLEN. Oh, yes.

Senator DILL. But they do not use them?

Colonel MCMULLEN. Oh, they license them, yes, but they do not get anything out of them because they have not the authority of law to grant anything but nonexclusive revocable licenses, which are not really worth anything.

Senator DILL. There was a bill that came over to the Senate last year to provide for the exclusive grants of patents.

Colonel MCMULLEN. Yes; it provided also for nonexclusive grants. It provided for exclusive licenses on patents in particular cases. That passed the House of Representatives.

Senator DILL. But died in the Senate?

Colonel McMULLEN. Yes, sir.

Senator DILL. With that kind of a patent in radio, would it be wise to grant an exclusive license on it?

Colonel MCMULLEN. Oh, no; there is no occasion for it. The idea of granting a license on a patent, as there considered, as I understand, was to provide for an exclusive license in a particular case, like, for instance, a chemical patent.

Senator DILL. Yes; but of course that bill was unlimited. There was no limit, except, of course, that the President was to decide when an exclusive license might be given.

Colonel MCMULLEN. Well, the authority would have to be given to somebody to decide, of course.

Senator DILL. I was opposed to that bill, unless there should be a provision put in not to include radio patents. I did not want any exclusive licenses granted on radio patents.

Colonel MCMULLEN. There probably would not be occasion for that anyhow.

Senator DILL. That depends somewhat on the advisors to the President, I fear.

Colonel MCMULLEN. Well, of course, that is always true.

Senator DILL. We have enough of this exclusive control of patents already. But coming back to the other subject: If the Von Bronck patent were declared prior to the Alexanderson patent, the Government would then be in a position to license radio manufacturers under it, would it not?

Colonel MCMULLEN. Yes; and I think they are in that position

now.

Senator DILL. But the Radio Corporation of America does it

now.

Colonel MCMULLEN. Yes.

Senator DILL. And it is not only collecting a royalty of 7% per cent on the radio sets, but it is even going to the extent of collecting a royalty on the cabinet, in which the set is placed, and even going further than that and collecting a royalty on the packing boxes in which the cabinets are shipped. It is the most unreasonable, the most outrageous thing I ever heard of.

Senator BROOKHART. In event we were to ascertain our rights to the Von Bronck patents, we would then be in a position to enforce stringent regulations against any such practice as Senator Dill has mentioned.

Colonel MCMULLEN. Oh, yes. And I think we are in a position to do it to-day except for the fact that we have no authority to grant any other, as I have said, than a revocable license. And, of course, you gentlemen know, no one has much time to fool with that kind of a license; I mean, no manufacturer could afford to put the capital required into a proposition where he has such a thing involved as an unstable license, that an officer or a bureau head could revoke at any time he might feel like doing it.

Senator BROOKHART. Have you examined the bill to see whether it gives authority for such regulation?

Colonel McMULLEN. No, sir.

Senator DILL. That was the bill that went through the Patent Committee, Senator Brookhart. This bill does not touch that matter.

Senator BROOKHART. I see.

Senator DILL. Do you think that if the revocable part of the law were changed, so that patents might be licensed for, we will say, a stated period, that that would assist in the situation?

Colonel MCMULLEN. Oh, yes; very materially. That would make all the difference in the world. And it ought also to provide for exclusive licenses in particular cases. For instance, I think I mentioned in my testimony before that we have a patent for the production of cellulose from wood fiber, and a very cheap process, but it is one which would involve a capital investment of a million or two million dollars at the outset. So that you, of course, could not get anybody to put an investment in a patent of that character unless they had at least an exclusive right over a period of years, so as to be able to get a real start.

Senator DILL What is your view of the patent monopoly in its relation to radio broadcasting, as to whether it is dangerous or desirable?

Colonel MCMULLEN. Well, I think this, that the danger of a patent monopoly is what is commonly termed "apple sauce". The danger is not in the monopoly of the patent, but is in the power of the corporation; a great big corporation getting what is called in industry "a patent situation," with a vast sum of money back of it, so that no small man or company or corporation can afford to fight them. It is not a monopoly of the patent per se. If you go down the line of the radio inventions, you will find, with a few exceptions, that the radio inventions of to-day are all mere refinements, or little differences, you might say, from Tesla, Fessenden, and Marconi, the old fellows long since out of date so far as their patents are concerned. There are very few outstanding radio patents.

Senator DILL. This amplification of tuned radio frequency patent is an outstanding patent in the radio game to-day, is it not? Colonel McMULLEN. Yes, sir.

Senator DILL. That is what is controlling the patent situation? Colonel McMULLEN. That is one of them, and next is the Lowell & Dunmore radio power socket unit, which is being fought out between the Radio Corporation of America and Lowell & Dunmore and the Duvalier company.

Senator DILL. How far along has it gotten?

Colonel MCMULLEN. The case was submitted on March 16 in Judge Morris's court in Wilmington, Del., and he has not as yet handed down his decision. It is on its way to the Supreme Court of the United States, undoubtedly.

The CHAIRMAN. When do the important patents that you refer to, expire?

Colonel MCMULLEN. The socket power unit patent will expire about 1940, I think, and the Schlomilk & Von Bronck patent has quite a number of years to run-my recollection is about five more years.

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