Page "lore" Paragraph 1051

In this tangle of conflicting claims, the patent-sharing scheme adopted by the A.L.A.M. at its founding proved to be the best device for avoiding or mitigating the burdens of incessant litigation.

The interchange of shop licenses for a nominal royalty eliminated infringement suits among the members of the A.L.A.M. patent pool ( although it did not protect them against outside actions ) and kept open channels for the cross-fertilization of automotive technology.

One of the conditions of the pool was a prohibition upon the withholding of patent rights among A.L.A.M. members.

Within its limits, this arrangement had the actual or potential characteristics of a cross-licensing agreement.

Its positive features outweighed the fact that the pool was an adjunct of a wouldbe monopoly.

Since the A.L.A.M. holdings embraced only about twenty-five per cent of motor vehicle patents, the denial of rights to independent companies did not retard technical progress in unlicensed sectors of the industry.

The highly important Dyer patents on the sliding gear transmission were held by the A.L.A.M. pool.

But Henry Ford used the planetary transmission in his Model T and earlier cars and, in 1905, as a precautionary measure, took out a license from the man who claimed to be its inventor.