Masthead

Clause 9

RCA Radiotron Tubes ad, 1927This isn't really part of anything else I'm discussing, but it's the sort of thing I find interesting.

Radio Corporation of America (RCA) began life is a patent pool between (primarily) AT&T, General Electric, Westinghouse; those companies ended up portioning out their interests among themselves: AT&T took anything involving "wire" communication. General Electric and Westinghouse took wireless industrial applications, and RCA ended up as a major manufacturer of radios, tubes, and broadcast equipment.

The patent pool was such that if you wanted to sell decent radios, you needed a license from RCA. They had (among others), Howard Armstrong's regeneration, superregeneration and superheterodyne patents, and Ernst Alexanderson's tuned-radio-frequency patents. It was difficult to make a good radio that didn't infringe on RCA's properties.

RCA did the obvious thing and exploited the hell out it. They only licensed companies large enough to ensure a hefty minimum royalty payment. Smaller companies had to merge to be large enough to make the minimum sales requirements, or buy a bankrupt company to acquire their license as part of their assets. Licensees tended to like this last item because the high-cost of entry cut down on competition; and RCA's lawyers were quick to find and hit bootlegging start-ups with cease-and-desist orders.

Many of the licensees themselves particularly hated the infamous Clause 9, which required manfucturers to outfit their new sets with RCA tubes, or tubes from an RCA licensee (such as G.E. and Westinghouse), because they couldn't negotiate lower prices from other companies.

More animosity came from the other tube companies—the ones who weren't licensing RCA's many tube patents. In the late 1920s, DeForest, Arcturus, HyGain-Sylvania and a number of others banded together and sued RCA for restraint of trade and monopolistic practices. RCA lost in court (and its final appeal was turned down by the Supreme Court), and ended up settling.

But Clause 9 had some unintended positive effects. Radio Industries (November 1929, p.362) had this to say:

With or Without Tubes?

Many sets are still supplied with tubes by the manufacturers, as a hang-over from the days of the Clause 9 enforcement. Is this good practice? Or is it bad practice?

We have asked dealers what they think of this practice, for there has been much howling about the autocratic methods of set manufacturers forcing certain makes of tubes on the jobber and dealer. Much to our surprise, most dealers and jobbers prefer to have sets with tubes. In the first place, they state, it assures tubes for every set bought, which is an important consideration when we recall the seasons when tubes were lacking and sets remained unsold. Then there is the guarantee of good tubes, for the set manufacturer must stand back of the tubes. Still again, there is assurance of having tubes match the set, for the set manufacturer has no alibi when his set will not work with the tubes he has himself selected and supplied. Lastly, the dealer and jobber pay for the tubes supplied, and it's six in one hand and half dozen in the other as to where they buy tubes, everything else being equal.

And so the practice seems to be growing in favor. The Clause 9 agitation, once subjected to so much harsh criticisms and threats and legal actions, is now being hailed in many quarters as a mighty fine practice. What a strange business!

For more information, check out AmericanRadioHistory.com's magazine section:

Radio: October 1931
Radio Industries: November 1929
Radio Retailing: October 1931
Radio World: May 9 and May 23, 1931 (and others)

www.antiqueradios.org

©opyright by James Ollinger. All Rights Reserved.