NCR Corp. has filed an antitrust suit against American Telephone & Telegraph Co., accusing the communications giant of trying to monopolize the semiconductor and computer industry to keep NCR and other competitors out of the market.
In a suit filed Monday in U.S. District Court in Dayton, the business and computer-machine company charges AT&T with taking unfair and illegal advantage of the patent-licensing process to stifle competition in the United States and abroad.
Also named as defendants in the suit are three AT&T subsidiaries: its manufacturing arm, Western Electric; its research and development division, Bell Telephone Laboratories Inc.; and Ohio Bell Telephone Co.
Although International Business Machines Corp. also is mentioned in the suit, the company is not listed as a defendant.
Among other things, the suit accuses Western Electric of infringing on four patents owned by NCR. Additionally, NCR charges Western Electric with using its control over the variety of patents Western Electric developed in the beginning of the computer era "to coerce and attempt to coerce" other companies to give their patents to Bell, without any royalty obligations.
What's more, the Bell System entered into an agreement with IBM that allowed the two giant firms to use each other's patents without royalty charges, the suit charges. The two companies also agreed to pool their resources and research efforts, NCR contends.
The result has been "to exclude persons outside the Western Electric-AT&T-Bell Labs-IBM pool from patented and unpatented technology, to substantially lessen competition, to restrain trade and commerce and to create a monopoly in one or more of the domestic and export markets for semiconductors and electronic information processing equipment," the suit says.
"NCR has lost potential sales and profits and has suffered damages," the company says, but it could not yet calculate the amount of damages it believes AT&T should be forced to pay the Dayton-based company.
"Unless the conduct of Western Electric, AT&T and Bell Labs is enjoined, NCR will be irreparably damaged in that it will be crippled or eliminated as a viable competitor . . . ," the suit adds.
AT&T officials denounced the suit yesterday. Spokesman Pic Wagner called the charges "a bunch of rubbish and nonsense that have no merit whatsoever."
IBM officials had not yet seen the suit so declined to comment.
NCR's suit was filed in part as a response to an earlier AT&T suit, filed last August, accusing NCR of failing to pay AT&T all the royalties it owed for using Bell System patents that cover the semiconductor industry.
Last year NCR had revenues of $3.3 billion, assets of $3.6 billion and net income of $254.7 million. AT&T, by comparison, earned $6 billion on revenues of $51 billion and assets of $125 billion.