Business & Finance: Patent Ocean

What does a company do with a patented process in some basic field of its industry? Sometimes it keeps the patent to itself. Often, however, such selfishness results in endless litigation with conflicting patents secured by other companies on similar processes. Corporations sometimes agree with certain other corporations to pool patents and collect royalties instead of paying lawyers. This procedure, however, is open to protest from companies not included in the pool.

Last week a corporation devised a different method of patent-distribution by inviting its entire industry to benefit in its patent process. The corporation i, Standard of New Jersey, Rockefeller jewel; the process is the manufacture of gasoline by hydrogenation (the combination of hydrogen with carbon to form the gasoline hydro carbon). The process is jointly owned by Standard of New Jersey and the I. G”. Farbenindustrie, commonly known as the German Dye Trust. Standard and I. G. Farbenindustrie have planned to organize a subsidiary company which will pay them a royalty for the U. S. rights to the process and will in turn distribute the patent rights to all U. S. oil companies which Standard considers able to “make a commercial use” of the process. Companies wishing to use the patent must pay the Standard-I. G. F. subsidiary a royalty and must also subscribe to the stock of the new company.

The significance of the Standard move lies in the complete separation of the patent process from Standard of New Jersey and the willingness of the new company to make the process available to any corporation desiring it. The greater the number of companies subscribing for stock in the Patent Company, the greater the Standard royalties and the greater the conservation of petroleum. Furthermore Standard, contemplating not a patent pool but a patent ocean in which all (with the qualification noted above) may freely navigate, has averted the likelihood of protest from independents or from the Government.