Radio age research, manufacturing, communications, broadcasting, television (1941)

2 percent for color television commercial apparatus ex- cept government apparatus, 1 V\2 percent for other com- mercial apparatus except government apparatus, and 1 percent for all commercial apparatus manufactured for government use. "All RCA license agreements provide for various deductions which make the actual rates even lower. Moreover, RCA royalty rates are based on the manufac- turer's selling price. Applied to retail selling prices to the public, these royalty rates are substantially cut in half. "The fact that RCA's royalty rates compare most favorably with those of other licensors in this or any other industry is beyond dispute. "In return for these reasonable royalty rates, licensees have the privilege of obtaining a license under, or using, any one or more patents under which RCA has the right to grant licenses. This licensing policy has resulted in licensees of RCA having complete freedom to manufac- ture apparatus in competition with RCA under any and all patents available to RCA, to the extent to which RCA has the right to grant such licenses. No royalties are payable on any apparatus under any license agreement granted by RCA unless the apparatus uses patents licensed by RCA." Progress of the Industry To substantiate the fact that RCA has not restrained the industry in any way, the answer to the Government's complaint said: "Sales in the electronics industry, including the radio- television industry, following the termination of wartime restrictions demonstrate its vitality, rapid growth and freedom from the monopoly and resrraint alleged. "From the mere handful of companies and the rela- tively small amount of capital which made up the elec- tronics industry in the early days, the industry has con- tinuously expanded. Today there are literally thousands of companies in which billions of dollars have been in- vested engaged in this industry." It was stated that today a very large number of independent companies are now manufacturing and sell- ing television receivers and all of these companies are in open and active competition with RCA and with one another. The industry's sales of radio and television receivers, RCA pointed out, increased from $54,400,000 in 1932 to $1,470,000,000 in 1953, a percentage increase of more than two and one-half thousand percent. RCA admits that "more people buy RCA television receivers than any other make of television receiver and that more station owners buy RCA television transmis- sion equipment than any other make. RCA further avers that in all of the categories of radio and television equip- ment there is intense and effective competition." Reporting that as of January 1, 1955, there were 128,900,000 radio sets and 33,816,000 television re- ceivers in the United States, RCA said that its policy "has contributed substantially to the ever-increasing num- ber of radio and television receivers in the hands of the American public and to a continual lowering of the price of such receivers." It was pointed out that during 1951 RCA spent on research and developmenr a sum in excess of the amount received by it in royalty payments and that under its patent licenses it made the fruits of such research and development available to the electronics industry. In addition, the RCA answer pointed out that it makes substantial payments to others for the rights to use patents developed through their research and develop- ment in competition with RCA. Cross-Licenses Enabled Industry to Develop RCA traced its history from 1919 when it was formed "at the urgent request of the United States Gov- ernment in order to free American communications from foreign domination and to create a new American radio company." In order to accomplish this objective, it was necessary to set up various patent cross-licenses with General Elec- tric Company, American Telephone and Telegraph Com- pany, Westinghouse Electric & Manufacturing Company and others because no one could manufacture or use {Continued on page 30) Through symposia such as this on RCA's first commercial color TV receiver, RCA has shared the results of its re- search with the electronics industry.