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17. 1961 Agreement and SR and BTL

  1. The 1961 Agreement apparently resolved the issue of priority between Williams and Mauchly and Eckert.
    1. One of the principal interferences (No. 85,809) in which the ENIAC patent application was involved was with BTL's Williams patent.
    2. That interference began in 1952 over the issue of priority of invention and ended with BTL and SR litigation on the actually academic [to the parties] question of public use of the ENIAC before the late Judge Archie Dawson of the Southern District of New York.
    3. On July 1, 1961, prior to the trial of that litigation, Western Electric Company (acting for the Bell System, including BTL) and SR executed a complete set of cross-license of all their patents and patent applications which included all EDP patents and applications, of which ENIAC was one.
    4. This Agreement had the effect of disarming BTL's attack on the validity of SR's ENIAC patent application.
    5. Pursuant to the terms of 1961 SR-Western Electric Agreement, Western Electric received, among many other things, a license under any patent to issue on the ENIAC patent application.
    6. Because SR owned the Eckert and/or Mauchly patent and application rights (including ENIAC), it was able to and did gain access to the Bell System's very substantial patent and application portfolio; and this was done after BTL had first been held to have priority in the Patent Office over what SR later claimed to be the basic computer patent.
  2. The issue of the public use of the ENIAC was submitted to the District Court and incorrectly decided.
    1. See 18.1.1 through 18.1.5.
    2. BTL never pursued the public use issue vigorously in the Southern District of New York case and certainly not after the execution of the July, 1961, cross-license Agreement with SR.
    3. At the time when the question of the public use was submitted to Judge Dawson in the Fall of 1961, BTL had no true interest in establishing public use as a defense to the validity or the issuance of the ENIAC patent.
    4. On December 18, 1961 in the course of the BTL case, SR was advised that the Los Alamos Laboratory of the A.E.C. was prepared to furnish an official affidavit that the 1945-46 ENIAC work before the critical date was useful, important, solved real problems and was relied upon; SR declined the affidavit was not helpful, did not reveal the A.E.C. offer to BTL or to the court and contended to the contrary effect on record to the court.
    5. BTL's internal memoranda in connection with the lawsuit prove that it desired to complete a public use litigation in the Southern District of New York at the least expense and with the least possible amount of effort; SR was of a like mind as it never mounted a truly effective effort.
    6. BTL and SR submitted their evidence in perfunctory and conclusory affidavits and deposition transcripts.
    7. Most of the volume of the evidence before Judge Dawson did not bear on the public use issue at all but on the priority issue which had previously been eliminated from the case.
    8. On September 6, 1962, Judge Dawson found that the ENIAC machine had not been in public use more than one year prior to filing the ENIAC application and directed the Commissioner of Patents to issue a patent on the ENIAC application.
    9. After this decision, BTL took a "for-the-record" appeal to the Court of Appeals for the Second Circuit which dismissed the appeal because the case had been moot all along by the 1961 execution of the cross-license between Western Electric and SR.
    10. Thus, had the case been correctly decided by the District Court, the ENIAC patent would not have issued and the EDP industry would not have been threatened with its burden or sanction.
  3. I find no violation of the antitrust laws and find lack of proof as to injury.
    1. Honeywell has not shown that it was injured in its business or property by reason of the 1961 SR-Western Electric Agreement.
    2. Honeywell has not proven that the 1961 SR-Western Electric Agreement was an unreasonable restraint on trade.
    3. Honeywell has not proven that the 1961 SR-Western Electric Agreement, of itself, violated the Sherman Act or injured Honeywell in its business or property.
    4. Nonexclusive patent cross-licensing in itself may be proper.

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