Radio broadcast .. (1922-30)

5i8 Radio Broadcast to run the risk of heavy penalties, and practically all of them went into the Association of Licensed Manufacturers. Ford continued the fight alone. I n J anuary , 1 9 1 1 , J udge Noyes delivered the opinion of the Circuit Court of Appeals that the patent was valid, but that Ford did not infringe it because Selden described an engine of the Bray ton type while the defendants and almost all modern automobile makers used the Otto type. Mr. Ford said that the advertising his company got from this case was worth more than all it cost. It was in this Association of Licensed Automobile Manufacturers; in the American Motor Car Manufacturers Association, formed to combat it, and in the National Association of Automobile Manufacturers, organized in 1900 — before the other two — including both "licensed" and "independent" companies, that the leading figures in the automobile industry learned many lessons in cooperation. They also learned something regarding the costs of patent suits and the uncertain value of patents. But the full fruits of this knowledge would probably never have been realized if there had. not been drawn into the industry at an early date a man who had seen at first hand the disastrous results of patent litigation in another field, and who had the perseverance to follow an ideal for many years, until he finally got practically all the automobile manufacturers of the country to accept it. This man is Mr. Charles C. Hanch, who started in the automobile business with the Nordyke & Marmon Company of Indianapolis. That company was, and still is, a large manufacturer of flour milling machinery. When the Nordyke & Marmon Company entered the automobile field, Mr. Hanch saw that there was likely to be the same rapid development as in the flour milling machinery business, and he foresaw that unless something was done to prevent it there would be even a worse tangle of patent litigation. He went to see Mr. Chester Bradford, of Indianapolis, who had been an attorney in much of the flour milling machinery litigation. Mr. Bradford suggested that a Maine corporation be formed to take over the patents of the various automobile companies, to issue stock to the different companies in proportion to the value of their patents, and to fix reasonable royalties to be charged for the use of the patents, Mr. Hanch talked to some of the automobile manufacturers about this. They all said, "Go to Detroit and see Harry Joy. If you can get him interested in the scheme, there is a chance of getting it adopted by the industry." So Hanch went to Detroit, but Mr. Joy could see no possibility of getting the automobile manufacturers to agree to such a plan. Mr. Hanch's hopes were checked, but he did not abandon his idea. That was in 1909. In 1915, practically all the companies in the National Automobile Chamber of Commerce, the successor of all the earlier organizations of manufacturers, which includes all the leading automobile producers except the Ford Motor Company, agreed to a plan of cross-licensing their patents which permits of their use by every other member free of charge. It is not surprising to find that C. C. Hanch was chairman of the patents committee that put this plan through. The chief credit belongs to Hanch. In the six years between the birth of the idea in his mind and 1915 he had not been idle. Upon every suitable occasion he had advocated a scheme that would eliminate patent litigation. He had the background of experience in the flour milling machinery industry to draw upon for horrible examples. But even he never dreamed at first that a plan could be effected that would permit of the free interchange of patents. It was when the committee started work on a definite plan and the difficulties of appraising the value of patents and fixing royalties for their use became apparent that it was suggested that no charge at all be made. As no manufacturer had patents worth as much as the aggregate value of the patents of all the others, there was a sound basis of fairness in this proposal. It was this argument that finally convinced the automobile manufacturers in the N. A. C. C. and induced them to adopt the plan. Each one had much more to gain from it than he was asked to contribute. THE EXCHANGE OF PATENTS THIS cross-licensing agreement does not cover radical patents, for it was felt that any company making inventions of a striking character, involving a radical departure from what is known, should be entitled to special compensation if such inventions proved valuaable, At present there are no patents owned