In the 1870s Alexander Graham Bell had obtained two patents for a telephone. He did not have the capital to start his own company and approached the Western Union telegraph company to sell his patents. The company had doubts about the commercial value of his inventions and believed that an also patented rival technology was superior, so it declined the offer.
Bell then found financially viable partners and set up a company, while Western Union established a subsidiary, the American Speaking Telephone Company, to exploit the rival technology. When Bell started legal proceedings Western Union decided to discontinue its telephone company in return for 20 percent of the revenue of Bell's company for the duration of his patent (20 years).
In the following years Bell secured his monopoly on the telephone by bying out all patents that could lead to competition and ruthlessly suing any company that tried to get into the telephone business. By 1904 the Bell Telephone Company had issued some 600 infringement suits and bought out some 900 telephone-related patents.
Bowker, G. (1995) Manufacturing Thruth: The Development of Industrial Research. In: M. Serres (editor): A History of Scientific Thought, Elements of a History of Science. Blackwell, Oxford, 583 - 610. (Translation of Éléments d'Histoire des Sciences, Bordas, Paris, 1989)