Business: Pencil Pact

When Scripto, Inc. and Parker Pen Co. each announced that they had a new kind of pencil that writes with liquid graphite and never has to be sharpened (TIME, Feb. 7), everyone in the industry expected a dingdong patent fight and a sales battle. Scripto's "Fluidlead," already on the market, was a 49¢ pencil; Parker's "Liquid Lead," a model at under $5, was to be brought out in the spring.

Last week on Valentine's Day, instead of scrapping, the two companies kissed and made up. To avoid the expense and confusion of a long patent battle, Scripto and Parker signed an agreement (in ink) that will allow them to use each other's formulas for a royalty. Scripto, as it has previously, will concentrate on the low-priced field; Parker will stick to the higher-priced pencil. Both companies will use Parker's Liquid Lead name, hoping that the agreement will discourage the kind of fly-by-night competition that almost ruined the industry in the early days of the ball-point pen. Said Parker's Executive Vice President Daniel Parker: "We feel that with a high-quality standard, any imitators at a lower-quality level will find it pretty tough sledding."

Prospective competitors would have to move fast indeed. Scripto is already producing 60,000 fluid graphite pencils a day, is sold out well into May. Said Scripto President James V. Carmichael: "By the time we catch up with present orders, we will be 3,000,000 units behind."