Patent War

Great among steel companies is United States Steel. Great among steel companies is also Bethlehem Steel. Last week these two companies went to war. Bethlehem Steel alleged that U. S. Steel is violating certain of its patents, has been violating these patents for six years. It asks that U. S. Steel be enjoined from further patent-violation, that it pay damages to Bethlehem Steel.

The disputed patents, of which Bethlehem claims to be sole licensee, cover the construction of what is known as the Gray beam. In 1904, one Henry Gray took out patents on this beam, which is rolled from one piece of steel instead of being made from several pieces riveted together. In 1926, U. S. Steel began the construction of a plant in Homestead, Pa., for the making of beams similar to the Gray beams. Thereupon Eugene Gifford Grace, Bethlehem president, announced that the Gray patents were still in force and that the making of Gray beams by a Bethlehem competitor constituted a patent infringement. Ensued a Bethlehem-U. S.Steel controversy which the courts are now called upon to settle.

The Gray patents are valued at $250,000,000. If the Bethlehem company wins its suit, U. S. Steel, besides being prevented from making further Gray beams, may have to pay damages equal to three times the value of such beams as it has made in violation of the patents. No estimate of these damages has been forthcoming.

Eugene Gifford Grace, President of Bethlehem, has been somewhat overshadowed in popular estimation by Charles M. Schwab, head of Bethlehem directors.

Employed in a subordinate capacity at Bethlehem Steel when Mr. Schwab assumed the management of that company in 1904, Mr. Grace was chosen by Mr. Schwab as one of the "Company of Fifteen"--a-select group of those Bethlehem employees whom Mr. Schwab considered most able. By 1915 Mr. Grace had acquired something over a million dollars in salary and bonuses. Belonging emphatically to the class of those who have dressed well and succeeded, Mr. Grace has frequently lamented Mr. Schwab's informality in attire. When Mr. Schwab made his inaugural address as president of the American Iron and Steel Institute (October 28, 1927) the following dialogue took place:

Grace: The presidency of the Institute has done you a lot of good.

Schwab: What do you mean?

Grace: For the first time in my life I have seen you in a decent suit of clothes.