General Electric Co. v. HYGRADE SYLVANIA CORPORATION

• Decision Date: 07 July 1944
• Citation: 61 F. Supp. 531
• Parties: GENERAL ELECTRIC CO. v. HYGRADE SYLVANIA CORPORATION et al.
• Court: U.S. District Court — Southern District of New York

61 F. Supp. 531

GENERAL ELECTRIC CO. v. HYGRADE SYLVANIA CORPORATION et al.

District Court, S. D. New York.

July 7, 1944.

Alexander C. Neave, of New York City (John H. Anderson, of Cleveland, Ohio, and Rowland V. Patrick, of Boston, Mass., of counsel), for plaintiff.

Gifford, Scull & Burgess, of New York City (Newton A. Burgess, of New York City, of counsel), for defendant Hygrade Sylvania Corporation.

LEIBELL, District Judge.

I decided this patent suit on March 30, 1944, filing Findings of Fact and Conclusions of Law, together with an opinion in which I set forth the reasons for my decision and discussed many of the points raised by the respective counsel. 61 F. Supp. 476. While this case was at trial the Government sought leave to intervene and to file an answer on the ground that plaintiff had used its patents illegally, "in violation of the Federal anti-trust laws and in a manner contrary to public policy." On the argument of the Government's motion the attorney for the defendant Hygrade stated:

"I merely want to state that the defendant, Hygrade Sylvania Corporation, has no desire nor intention to oppose or interfere with the plan of the Government to intervene in the case. If the Court should decide to grant the motion, Hygrade has no objection whatever, but I assume that provision would be made for amending the pleadings accordingly. However this position we take is without prejudice to any right to make use of the defense in the future. That is all I have to say for Hygrade."

In the opinion I filed on the Government's motion (45 F.Supp. 714, 719) I stated that "if the defendant fails to present the issues alleged in the government's proposed answer, the government may renew its motion to intervene." I referred also to the fact that the Government then had an anti-trust suit pending in the District Court of the United States for the District of New Jersey against this plaintiff and others, charging that certain licensing agreements of plaintiff in respect to patents for incandescent lamps were in restraint of trade and illegal, under the Federal Anti-Trust statutes. Some of the licensing agreements referred to these patents for fluorescent lamps, but the Government's then pending suit was concerned principally with patents for incandescent lamps. Further, the special assistant Attorney General stated that it was the purpose of the Government to file an anti-trust suit against the plaintiff and others charging similar illegal conduct in relation to licensing agreements controlling the manufacture and sale of fluorescent lamps under the patents involved in this patent litigation. I denied the Government's motion for leave to intervene herein, without prejudice to a renewal at such time as this Court might indicate.

In my opinion of March 30, 1944, disposing of this patent litigation, I reviewed the situation in respect to the Government's motion for leave to intervene and I noted that since my decision of that motion, the Government had instituted in the District Court in New Jersey a second anti-trust suit against the plaintiff and others charging an illegal combination in restraint of trade, evidenced in part by certain agreements relating to the manufacture and sale of fluorescent lamps by licensees of General Electric Company. I quote the following from my opinion 61 F.Supp. 531:

"The defendants herein definitely stated on the record at the end of the trial that they did not intend to raise the issue of `unclean hands' or `public policy', by amending their answers herein to plead a violation of the anti-trust laws by plaintiff in making licensing and other agreements involving plaintiff's patents in suit."

I therefore concluded that if the issue was to be presented in this patent litigation the Government would have to renew its motion for leave to intervene and file an answer herein. Accordingly I inquired if the Government intended to renew its motion for leave to intervene herein or if it would seek a stay of the entry of a decree in this patent suit pending the decision of the New Jersey anti-trust litigation.

As a result of that inquiry the Government made a motion herein on June 2, 1944, and on June 24, 1944, I entered an order, providing as follows:

"It is hereby ordered that the entry of any interlocutory or other decree in the above entitled cause shall be suspended and stayed until after the final disposition by appeal or otherwise of the action entitled United States v. General Electric Company et al., Civil Action No. 2590, filed December 9, 1942, in the United States District Court for the District of New Jersey;

"And it is hereby further ordered that the entry of this order shall be without prejudice to the right of the United States of America to renew its motion for leave to intervene herein."

About the same time that the Government made its motion on which the above order was entered, the defendant's attorney advised me that he too was bringing on some motions. The defendant's motions were contained in one notice and came on for a hearing June 23rd. Motion #1 is —

"For leave to amend its answer herein by inserting on page 4 thereof the following: `12. That plaintiff is barred from relief under both the Hull patent and the Meyer et al. patent in suit because it has misused the Hull patent in an effort to control competition in unpatented devices."

The burden of defendant's argument is that claim 3 of the Hull patent is for —

"3. The combination of

"(1) `an electric current source having a voltage materially greater than fifty volts,

"(2) `an electric discharge device connected thereto comprising a thermionic cathode, an anode, a container therefor, and a gas therein having a pressure within the range of several microns to several millimeters of mercury' and

"(3) `means for maintaining the ion bombardment voltage with respect to said cathode less than a critical value characteristic of the nature of the gas in said container at which destructive disintegration of said cathode would occur.'"; that defendant Hygrade does not supply all three elements, only the second, the electrical discharge device and therefore at best is only a contributory infringer; that plaintiff issues licenses under the Hull and other patents and that "the amount of sales is measured in lamps"; that the lamp is not patented but only the combination of the lamp and other elements; that under the doctrine of The Mercoid Corporation v. Mid-Continent Investment Co., et al., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376, plaintiff may not control the sale of an unpatented device as part of a patented whole. Defendant Hygrade also asserts that by these means plaintiff is seeking "to control competition in Hygrade fluorescent lamps."

The main defect in defendant's argument, as thus constructed, is that it is based on the false assumption that plaintiff's electrical discharge device is not patented. The subject of the Hull patent is an "electrical discharge device and method of operation." The specification, in the second paragraph, states that "The present invention relates to electrical discharge devices of the thermionic type." Claims 6, 7, 8, 9, 10, 11, 12, 13, 14 all relate to the electrical discharge device itself. It is a rectifier. The validity of plaintiff's patent in this rectifier was conceded by defendant Hygrade in a prior litigation in this Court and a consent decree entered in December 1934. Plaintiff's electrical device is patented. That clearly distinguishes this case from the Mercoid case where the court said "that the competition which is sought to be controlled is not competition in the sale of the patented assembly but merely competition in the sale of unpatented thermostatic controls." No such situation is here presented.

There would be no invention in combining an old electrical discharge device with an electrical circuit having a voltage exceeding 50 volts, and with an impedance in the circuit. But as plaintiff's counsel argues, in Hull's invention we have a new electrical discharge device built for operation in such a circuit.

I have discussed in my opinion, (61 F. Supp. 486), filed in deciding the patent suit, many features of Hull's electrical device, described and explained in the specification of the patent. There is no need for repeating them. I concluded that "Hull's invention in patent No. 1,790,153 is employed in the fluorescent lamp in order to prolong the life of the cathode." 61 F. Supp. 491.

On the argument of this present motion defendant Hygrade directed the Court's attention to defendant's Exhibits CCCC and DDDD. The first is a book of license agreements between General Electric Company and Westinghouse Electric and Manufacturing Co. covering a period from 1927 to 1938. I find no reference to the Hull patent in Exhibit CCCC. But even if it were therein referred to, that would not be of any importance in the decision of this motion. In Exhibit DDDD (the so-called B license relating to Electric Discharge Lamps) the Hull patent is listed at the end of the agreement as follows:

                Number     Name         Date         Title
                1,790,153  Hull     Jan. 27, 1931    Broad
                                                    Cathode
                

The term electric discharge lamps is defined in Exhibit DDDD as follows:

"(A) The term `electric discharge lamp' as used herein means every device, and only every device, the primary purpose and/or primary use of which is to convert electric energy into light within the visible spectrum, or into light approximating the sun's spectrum, by excitation of gas and/or vapor within said device, with or without means for converting invisible light produced within the device to visible light. The term `electric discharge lamp' does not include or embrace starting, regulating, operating, reflecting, housing, jacketing or other devices used or useful with such lamp but which are not an integral part of the lamp itself." Note the last sentence of the above quotation.

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