Twelve-Year Quarrel

Five years ago, when the Federal Trade Commission ended its first investigation/- of the Radio Corporation of America, it compiled 21 closely printed pages of U. S. radio patents. The commission named no single patent as most important. But many a radio engineer, if questioned, now would pick one patent as outstanding. Without the "feedback circuit," used in transmitting and receiving alike, necessary to transAtlantic telephony, to superheterodyne receiving sets, no commercial radio company could operate.

Over the authorship of this paramount "feedback" invention, two men have quarreled for 12 years. Edwin H. Armstrong was a boy enthusiast. He was still at college when he developed his idea and went to his father for backing. It was not forthcoming. Years of effort passed before Inventor Armstrong spoke before a gathering of radio experts, explained his theory. From that speech, Inventor Armstrong claimed, another man stole his great idea.

The Other Man was Lee De Forest. Inventor De Forest worked in the laboratories of the Federal Telegraph Co. of California. Curiously, when he had completed his "feedback" plans, he failed to tell the Federal Co., but went instead to A. T. & T. To A. T. & T. he sold full rights to the invention, reserving only a personal right to the circuit for amateur purposes. Inventor Armstrong sold his rights to the Westinghouse Co. in a deal which involved $500,000. And from the conflict of these two men sprang a controversy in the courts which has enmeshed every important U. S. radio company.

Armstrong won in New York; De Forest in Philadelphia. Last month, the U. S. Supreme Court handed down a decision which will probably be final. Armstrong was stripped of his glory; De Forest won full credit for the invention of the challenged circuit.

Immediate results of the decision will not be spectacular. So intricate and inclusive is the system of cross-patents that no great company will be crippled by Armstrong's defeat. R. C. A. has agreements with both A. T. & T. and Westinghouse, can continue to use the circuit in its transAtlantic service. Inventor De Forest last week claimed the victory was worth $1,000,000 to his own De Forest Radio Co.. which can now manufacture receiving and transmitting sets without infringement. But De Forest, having sold rights to A. T. & T., cannot use the "feedback circuit" to compete with R. C. A.'s commercial lines.

More remote consequences, however, are not without danger to R. C. A. From the litigation, one point has been clearly gained. Together with General Electric, Westinghouse, and other allied companies, R. C. A. had made an agreement with the Federal Telegraph Co. not to contest use (of the "feedback" circuit in the event De Forest won his case. Successor to the Federal Telegraph Co. is the Kolster Radio Corp. And the Kolster Radio Corp. is the good friend of the Postal Telegraph Co., subsidiary of youthful, enterprising International Telephone & Telegraph Corp.

Without the "feedback" rights, I. T. & T. could not possibl" establish a transoceanic telegraph system to supple ment its cable lines. With the right:, radio experts thought it barely possible, last week, that I. T. & T. might both attempt and succeed. As everyone knows, I. T. & T. would like to merge with Radio, is restrained by the White Act. Next best, in I. T. & T. eyes, might be a battle with R. C. A. in its own field.

Last week, De Forest and the Kolster Corp. looked toward a merger of their own interests, independent of R. C. A. They talked of consolidation, patent poolings. Total assets of De Forest are but $2,940,415; of Kolster, $11,507,703. Each values its patents at between $2,000,000 and $3,000,000.

Last week, also, Kolster made a dicker with the North American Co., major U. S. public utility system. Kolster gained title to some 600 patents. North American Co. kept for the subsidiary, Wired Radio Inc., exclusive licenses in the field of transmitting radio programs into houses over electric light wires. But Wired Radio Inc. will purchase a third of its apparatus from Kolster.

Government investigation of R. C. A. is still in progress.