Vail also succeeded in negotiating an out of court settlement in connection with the company's patent infringement case against Western Union in 1879. Western Union recognized Alexander Graham Bell as the inventor of the telephone and agreed that it will stay out of the telephone business. In addition, Western Union also transferred all of its patent rights on Elisha Gray and Thomas Edison's telephone inventions. All entities who have interests in the telephone business will be licensed under the Bell patents. Furthermore, Western Union also agreed to pay 20% of the total costs of every new developed telephone patents. In return Bell Telephone Company agreed that it will not engage in the telegraph business and Western Union will be given a license to use the telephone to transmit telegraphic message and it will be given a 20% of the Bell telephone rentals and royalties. <ref>[http://faculty.insead.edu/adner/research/Wester%20Union%20case%20sample.pdf The Bell Western Union Patent Agreement of 1879]</ref> | Vail also succeeded in negotiating an out of court settlement in connection with the company's patent infringement case against Western Union in 1879. Western Union recognized Alexander Graham Bell as the inventor of the telephone and agreed that it will stay out of the telephone business. In addition, Western Union also transferred all of its patent rights on Elisha Gray and Thomas Edison's telephone inventions. All entities who have interests in the telephone business will be licensed under the Bell patents. Furthermore, Western Union also agreed to pay 20% of the total costs of every new developed telephone patents. In return Bell Telephone Company agreed that it will not engage in the telegraph business and Western Union will be given a license to use the telephone to transmit telegraphic message and it will be given a 20% of the Bell telephone rentals and royalties. <ref>[http://faculty.insead.edu/adner/research/Wester%20Union%20case%20sample.pdf The Bell Western Union Patent Agreement of 1879]</ref> |