Claims Not Anticipated
AMP Report & Burks Article
Fraud on Patent Office
25 Other Patents & Apps.
SR-IBM 8/21/56 Agreement
SR-IBM Settlement of Interferences
SR-BTL 1961 Agreement
SR-IBM 1965 Agreement
Pending Application Royalties
Section 7, Clayton Act
Statute of Limitations
Infringement of ENIAC
Declaratory and Injunctive Relief
Order for Judgment
Table of Authorities
- The application was filed in 1947 and issued in 1964.
- The application for the ENIAC patent was filed in the Patent Office on June 26, 1947.
- The ENIAC patent contains 91 sheets of drawings and 232 columns of specifications and claims. There are 148 claims.
- The ENIAC patent application and patent describe the ENIAC machine which was a pioneering achievement.
- Patent applications on pioneering achievements are said to be involved more frequently in interferences than other inventions, particularly if the patent application is pending over a substantial period, because other people may learn generally about it and move into the field.
- During 1949, counsel for E and M agreed to keep patent cases such as EM-1 pending in the interest of taking into account during their prosecution the interim developments of others following their filing; the same view was expressed in 1959 by Hall.
- The amendment of May 20, 1963, with respect to the term "pulse" was an abuse of the long pendency of the ENIAC patent application.
- The complaint in SR v. BTL was filed in November, 1955, a one day trial was held in March, 1962, and the District Court decision followed in September, 1962.
- The trial was based upon a stipulation submission of documentary evidence and briefs, and no testimony was presented in open court.
- The court was afforded no opportunity to judge witness credibility on the basis of manner and demeanor.
- Plaintiff claims that defendant SR and its counsel intentionally and unreasonably delayed proceedings before the Patent Office and the courts by deliberate action taken through deliberate lack of action.
- This Court found a prima facie showing of deliberate delay upon the testimony of Honeywell's expert witness, Professor James B. Gambrell.
- The first interference was filed more than 3-1/2 years after the filing of the application
- In March 1951, while the application for the ENIAC patent was being prosecuted, the first (No. 85,131) of eleven interferences was declared in the Patent Office.
- Interference No. 85,131 was declared following the copying of claims by Eckert and Mauchly from NCR's Mumma patent No. 2,495,075.
- The interference was dissolved after Eckert and Mauchly filed an abandonment of contest.
- Many of the interferences were unwarranted.
- Interferences are proceedings in the Patent Office to determine who, between two or more parties, is entitled to priority of invention. Before an interference is declared the Patent Office must determine that there is sufficient common subject matter claimed by the parties to warrant declaring an interference.
- Defendants instigated numerous interferences by copying claims of patents on devices developed by competitor.
- The first interference was concluded by June 14, 1951.
- The second interference was declared in May 1951 and was concluded in the fall of 1951.
- From 1951 through 1957, defendants copied 156 claims from competitors' patents in order to initiate interference proceedings. 152 of these claims were copied from patents based on applications filed subsequent to the ENIAC application, and resulted in the setting up of numerous interference proceedings involving NCR, BTL, Stromberg-Carlson, IBM, and Clary Corp.
- When the interferences were ultimately terminated, the Patent Office held that 147 of the 152 claims were improvements to which defendants had no legitimate claims. With respect to many of the 147 claims, the Patent Office held that there was not support for them in the ENIAC patent application.
- The issuance of the ENIAC patent was delayed by these interferences.
- There was no intentional delay during the first two interferences.
- The third interference, No. 85,809, began in May 1952, as a result of Bell Telephone Laboratories' (BTL's) copying of two claims from the ENIAC patent application.
- The third interference involved the question whether or not, as to Claims 39 and 42 of the ENIAC patent application (Claims 8 and 11 of ENIAC patent), Eckert and Mauchly were entitled to priority over Samuel B. Williams, whose patent application No. 22,784 was assigned to BTL.
- The Board of Patent Interferences awarded priority to Williams (BTL) on September 29, 1955, over 9 months after the final hearing.
- There was no intentional or undue delay during Interference No. 85809 in the Patent Office, especially in view of the complexity of the case, and it probably moved more expeditiously than might have been expected.
- The remaining interferences were declared subsequent to Interference No. 85809 and terminated prior to September 6, 1962 when the United States District Court of the Southern District of New York handed down its decision in a litigation growing out of the third interference.
- Defendants failed to obtain the services of counsel with the time or interest in pursuing a matter which defendants considered important.
- The subject matter of SR v. BTL case, the ENIAC application and the Williams patent, was complex and required large amounts of time.
- SR recognized that a team effort was required in order to prepare the SR v. BTL case for trial within a reasonable period of time.
- The aggregate time devoted to the SR v. BTL case by all of the SR attorneys during the first six years of the litigation average substantially less than the reasonable billing time of a single attorney.
- Deliberately extending the expiration of a monopoly is a serious violation of the Constitution and the patent laws.
- Intentional delay by an applicant for patent invalidates the patent.
- The only legitimate purpose of an interference proceeding is determining the question of priority of inventorship.
- In the SR v. BTL suit plaintiff's counsel for much of six years failed to adequately prepare for trial.
- On November 25, 1955, within the allotted 60 day period, SR filed a civil action under 35 U.S.C. Section 146 in the United States District Court of the Southern District of New York to overturn the decision of the Board of the Patent Interferences.
- From January, 1957 until October, 1961, Sperry Rand's chief trial counsel for the SR v. BTL case conducted interparty discovery only when:
.1 he was faced with the necessity "...because the case might be on the dismissal calendar";
.2 he faced a court-imposed deadline; or
.3 in the case of depositions, the health of a witness of advance age (80) was of concern (Williams), and a distant witness happened to be passing through town (Huskey).
- Between the commencement of the action and the trial in March 1962, inside counsel and other personnel at SR as well as outside counsel from New York, Philadelphia, and Washington were less than diligent in obtaining formal and informal discovery, preparing and answering interrogatories, taking depositions, securing affidavits, working with fact and expert witnesses, researching the law, learning about the extremely complex electronic subject matter, conduction negotiations for simplification of procedure in the case, and generally preparing the case for trial.
- The outside attorneys who worked on this case for SR included: C. Blake Townsend, William D. Hall, Carroll G. Harper, Nelson Moore, Robert Kosinski, Elliot Pollock, Zachary T. Wobensmith II, Reynolds Brown, Max Libman, and Mr. Hussey.
- The inside attorneys and personnel who worked on the case for SR included: John P. Dority, C. A. Norton, Joseph Forman, L. Etlinger, Louis Altman, Francis McNamara, C.E. McTiernan, Marshall Truex, C.C. English, Jerry Light, and Dr. Throckmorton.
- SR also had at least two outside experts, Dr. Stibitz and Mrs. Loveday, working part-time on the electronic aspects of the case with Stibitz hired to work approximately 50% of his time. Stibitz wrote a number of reports for and consulted on many occasions with counsel for SR in order to aid them with various technical issues in the case, including the question of the operativeness of the Williams (BTL) patent.
- SR's New York counsel had billed SR approximately $120, 000 for its work from the fall of 1955 through the fall of 1961, the latter date being some six months prior to the trial before Judge Dawson.
- Carroll Harper, a young lawyer working under C. Blake Townsend, SR's lead counsel, spent approximately 3, 000 hours on the case.
- William D. Hall, SR's Washington counsel, testified that he began spending 50% of his time on ENIAC matters including SR in August 1955, and by mid 1960, when all the interferences and IBM public use proceedings had concluded, Hall said that he was spending 50% of his time on SR.
- Judge Cashin, Judge Palmieri, Chief Judge Clancey, and Judge Dawson of the United States District Court for the Southern District of New York encouraged the parties' efforts toward settlement and/or a simplified procedure in this complex case.
- On December 10, 1958, SR made an application to Chief Judge Clancey for the appointment of a single judge and in that application SR stated in its concluding paragraph:
"In view of the nature and complexity of the subject-matter, the necessity for detail and prolonged preparation and pretrial proceedings, and the probable length of time which will be required for the trial, it is believed that the designation of a single Judge to hear all further proceedings in this case will expedite considerably the resolution of the controversy and will materially reduce the burden upon this Court."
- On December 17, 1950, Chief Judge Clancey assigned the case to the Honorable Archie O. Dawson "for all purposes including trial."
- The issuance of the ENIAC patent was delayed by Sperry Rand's failure diligently to prepare the SR v. BTL case for trial.
- Plaintiff's (SR) management was in part at fault because of unnecessary and unreasonable delays in carrying on settlement negotiations.
- SR allowed negotiations for an overall cross-licensing arrangement with BTL and Western Electric to extend over a period of more than seven years.
- The priority dispute of the SR v. BTL case had begun in 1952, at the instigation of BTL, by the declaration of Patent Office interference proceeding No. 85,809.
- By April 30, 1954, SR recognized that it would eventually endeavor to perfect a cross-licensing arrangement with BTL.
- The cross-licensing arrangement was completed on July 1, 1961.
- SR's unnecessary and unreasonable delay of the SR v. BTL case was suited to the convenience of its overall cross-licensing negotiations.
- As late as 1957, BTL urged that not action or consideration be taken in the case until the parties first consummated an overall cross-license including other patent rights.
- SR's counsel, Townsend, contacted BTL's counsel, Pugh, to make sure that he "was not coasting along in a 'fool's paradise' by taking no further action in this case pending the outcome of the present negotiations."
- BTL assured SR that inactivity by SR pending such negotiations would not be urged by BTL to constitute unjustified delay or laches.
- For example, on November 12, 1959, Townsend asked McNamara, Vice President and General Counsel of defendants, how negotiations were progressing, because he and Pugh agreed that Judge Dawson "...may take some drastic action" in setting the case for trial. On November 19, 1959, McNamara requested Townsend to "hold this in abeyance pending our present negotiations with Western Electric on an overall license in designated fields including the data processing field." In a follow-up letter dated November 20, 1959, Townsend expressed his understanding of McNamara's instructions as follows:
"I note that you wish to hold this matter in abeyance pending your present negotiations with Western Electric.
"This will put me in a position to deal with Mr. Pugh if he calls again."
- By March 1960, SR's counsel, Townsend, advised the court that:
.1 pre-trial preparations have not yet been completed;
.2 BTL has not yet commenced its discovery;
.3 discussion of a possible settlement still continues between the parties;
.4 it is impossible to say when the case will actually be ready for trial; and
.5 pre-trial hearings would be premature at this time in view thereof.
- Despite six years of preparation, a District Court must force a trial.
- Judge Dawson wrote to counsel about the status of the case on March 14, 1960 and held pretrial conferences on July 1, 1960, December 2, 1960, June 12, 1961 and June 30, 1961.
- On July 1, 1960, Judge Dawson held a pretrial conference:
"THE COURT:... I called this conference because this case was filed in this court almost five years ago. It is one of the oldest cases untried in this court, and I want to know where we are going, how soon we are going to be ready for trial and what we have to do to get ready for trial in this case.
"...I want to find out where we go from here because this is the sort of this that creates the criticism in Washington of this court. When a case is dragging around for five years and does not go to trial, they say the court is not doing its work.
...I think by November 1, if you put the pressure on, you can have everything done. By then this case will have been in this court about five years. So I think in five years' time any depositions can have been taken. As a matter of fact, if this was anything other than one of these involved patent cases, I would dismiss it right now for lack of prosecution, because no case should be instituted and then require a five-year wait before it is ready for trial."
- Judge Dawson was "a very competent judge" who was "prone to getting his cased tried."
- The kind of trial resorted to in desperation by counsel and the court produced a clearly incorrect result.
- About September 27, 1961, the parties entered into a cross-license agreement dated as of July 1, 1961. Thereafter, on November 1, 1961, the parties filed with the court a stipulation and order narrowing issues for submission of evidence through documents.
- On November 1, 1961, Judge Dawson approved a stipulation and order for a simplified procedure "(i)n the interest of simplifying and expediting the trial of the above civil action, to lessen the amount of work and the expense required in the presentation of proof and to materially shorten the court time required..."
- The November 1, 1961 stipulation and order provided for testimony to be submitted in the form of affidavits, depositions, or oral testimony as the parties might elect. Each party was given the right to cross-examine by deposition any affidavits of the other party.
- On March 6, 1962, a one-day trial was held. The trial constituted an oral submission by counsel of stipulated documentary evidence.
- Judge Dawson handed down his decision in favor of SR on September 6, 1962. Sperry Rand Corp. v. Bell Telephone Labs., Inc., 208 F. Supp. 598 (S.D.N.Y. 1962).
- The Court of Appeals dismissed BTL's appeal as moot in May 1963. Sperry Rand Corp. v. Bell Telephone Labs., 317 F.2d 491 (2d Cir. 1963).
- A one or two month trial in the spring of 1962 would have possibly eliminated a nine month trial in 1971 and 1972.
- Judge Dawson stated that through this stipulation and order of November 1, 1962, "what was originally predicted to be a trial of several months' duration was reduced to a single day... Through the commendable efforts of both parties the issues in this action have been greatly simplified."
- In contrast is the speed with which a substantial number of lawyers acted in 1963 in filing the amendments and the apparent repeated pressure on the Patent Office in 1963 to issue the patent.
- During a six-moth period in 1962 and 1963, fifteen of Sperry Rand's in-house attorneys spent of 2,000 hours preparing the May 20, 1963 amendment to the ENIAC application.
- After the Court of Appeals' dismissal in May 1963, SR promptly proceeded with amendments and examiner interviews in the Patent Office in connection with the ENIAC patent applications.
- SR received the Patent Office's Notice of Allowance of the ENAIC patent on December 20, 1963.
- SR's counsel paid the necessary final fee on that same day although six months was automatically allowed for such payment in 1963-64.
- The ENIAC patent issued on February 4, 1964.
- The effort applied to that single amendment is about as much as Sperry Rand's chief trial counsel for the SR v. BTL case, Townsend, had devoted to the case over the six years of its pendency.
- On the record as a whole (but with reluctance) I find that there was no undue delay in the proceedings before that Patent Office or the District Court.
- SR did not exceed any time limits provided either by court order, rule, or statute.
- There was no intentional delay in the prosecution of the case of Sperry Rand Corp v. Bell Telephone Labs.
- There was no intentional delay in the issuance of the ENIAC patent.
- A party seeking a right under the patent statutes may avail himself of all their provisions and courts may not deny him the benefit of a single one.
- Honeywell has not met its burden of establishing that there was undue delay in the issuance of the ENIAC patent or that there was any improper conduct on the part of SR or its counsel which caused undue delay.