General Electric Company v. Sciaky Bros., Inc.

• Decision Date: 27 September 1960
• Docket Number: No. 16676,18338.,16676
• Citation: 187 F. Supp. 667
• Parties: GENERAL ELECTRIC COMPANY, Plaintiff, v. SCIAKY BROS., INC., Defendant.
• Court: U.S. District Court — Western District of Michigan

187 F. Supp. 667

GENERAL ELECTRIC COMPANY, Plaintiff, v. SCIAKY BROS., INC., Defendant.

Nos. 16676, 18338.

United States District Court E. D. Michigan, S. D.

September 27, 1960.

COPYRIGHT MATERIAL OMITTED

Dickinson, Wright, Davis, McKean & Cudlip, Detroit, Mich., Fish, Richardson & Neave, New York City, for plaintiff.

Lawrence C. Kingsland and Edmund C. Rogers of Kingsland, Rogers & Ezell, St. Louis, Mo., for defendant Sciaky Bros., Inc., and Welding Research, Inc.

PICARD, District Judge.

We have consolidated two patent suits brought against Sciaky Brothers, welding machine manufacturers, by General Electric Company, manufacturer (among many other products) of welder control devices which are incorporated within electric resistance welding machines by its customers—and also Sciaky's counterclaim against General Electric.

The original suit, 16,676, was filed May 10, 1957, seeking declaratory judgment to determine whether General Electric was free from infringement of four Sciaky Bros. Inc. patents, (later dropped to two) leaving Sciaky patents 2,415,708 and 2,431,083 in dispute. Sciaky filed a counterclaim in this action.

More than a year later, August 21, 1958, General Electric commenced the second action, 18,338, alleging that welding machines which Sciaky manufactures and sells, including control features, infringed eight General Electric patents (later reduced to six).

Each party in both cases accuses the other of laches and estoppel and also advances the usual contentions—invalidity of the other's patents, non-infringement by their own machines, validity of their own patents, and infringement thereof by the other.

These two cases combined for trial occupied from July 7 to August 26, 1959 for the taking of testimony alone, at Bay City, Michigan, totaling about 6,000 pages of record with 154 patents (an unbelievable number) cited and introduced. Counsel then asked and received about seven months for briefs but this was extended to about ten months at the request of attorneys on both sides and during that period voluminous printed briefs were furnished us. Since August, 1959, we have had an oral hearing for a complete day, March 26, 1960, at Bay City, adding 259 pages of further record and since then additional briefs have been filed. Later this court received many letters from the parties altering, adding to, and detracting from briefs that had been filed. To make room for these additions and changes complete paragraphs had to be lifted from the previous briefs of the parties. So that not until about July 16, 1960, were we able to start reading all briefs and letters to prepare for our opinion.

We must here add that counsel for both sides have been very hardworking, efficient, courteous and cooperative. They are gentlemen well versed in patent law and engineering—at least as it extends to welding machines.

Nevertheless we have concluded that if this court were to extensively cover every facet of these cases the opinion itself might consume the greater part of the usual size bound legal volume. It would then be very technical and of no great help in future decisions.

Furthermore we do not deem it necessary to go into a long discussion on the history of welding as its performance and purposes are well known not only to the trade but to others on the outside who may be interested. Suffice to say that the welding art has, over the last fifty years, developed very much and for a time even taxed the electric load of communities until the development of the three phase approach to the welding problem.

We found that better welding has come chiefly through experimentation and it has been determined that if the metal parts to be welded are subject to a low heat, then a high heat, then back to low heat again—with intervals between, of course; or, sometimes low heat—interval —again low heat, that many steps—the duration of intervals, magnitude of the heat applied, extent of the pressure, the time of its application, are all important, and it is not easy to determine whether the welder is adjusted to give the optimum welding condition; but what is more important is that if the operator has successfully adjusted the welder to give the operation desired then this operation must be assured during all the welding so that during that welding the same adjustment will repeat automatically.

We will decide the second suit, 18,338, first with Findings of Fact and Conclusions of Law; then we will proceed to the first suit, 16,676. But it must be understood that the suits complement each other.

18,338

Findings of Fact

Herein General Electric alleges that the welding machines which Sciaky manufactured and sold included features that infringed the following six General Electric patents—

                Patent number        Patentee              Filed      Issued        Title
                ------------------------------------------------------------------------------------
                2,361,846         George W. Garman        1/25/39    10/31/44    Electric Valve
                                                                                 Circuits
                2,315,916         Austyn L. Whiteley and  3/20/39    4/6/43      Electric Welding
                                  Bertram G. Higgins                             System
                2,331,124         Orrin W. Livingston     9/13/41    10/5/43     Electric Valve
                                                                                 Translating System
                2,348,553           "     "     "         4/23/42    5/9/44      Electric Control
                                                                                 Circuit
                2,384,937           "     "     "         4/23/42    9/18/45     Electric Valve
                                                                                 Translating
                                                                                 Apparatus
                2,390,982         Maurice E. Bivens       9/30/42    12/18/45    Electric Control
                                                                                 Circuit
                

Briefly, we conclude that the legal defenses of laches and estoppel advanced by Sciaky are well taken, arriving at this decision because of the following facts, which are either admitted or proven.

We find:

1. That General Electric has dealt with Sciaky since 1940 and was well acquainted through trade associations, magazine articles, direct negotiations, conventions, social gatherings, exhibits, prints of the Sciaky three-phase equipment, and in fact through innumerable sources, with every patent, including those in suit, that might affect the welding business, and having such knowledge, endeavored to arrange some kind of a cross-licensing between Sciaky's and its own patents, but failed to do so. Then in August, 1958, long beyond the statute of limitations, for the first time General Electric claimed infringement by Sciaky of its Whiteley '916, Livingston '124, Livingston '937 and Bivens '982 patents although the Sciaky machines allegedly using the accused features had been discussed between them since at least 1948. (No. 3 went into production in 1945). A three-phase to single phase machine employing anode transformer had even been exhibited in an open house attended by General Electric personnel in October, the same year;

2. Specifically the parties were negotiating for settlement from October 1948 to at least May 1951 regarding the Livingston '553 and Garman '846 patents; and negotiations consisting almost exclusively of offers by General Electric of a number of various patents in exchange for rights to Sciaky's '708 and '083 were made all of which Sciaky refused. To this court these offers might be considered to be a fishing expedition rather than sincere efforts or charge that any of their patents were deemed to be infringed;

3. That there was both laches and estoppel on the part of General Electric in the following instances where General Electric got information concerning Sciaky's patents and machines long before it decided that it ought to file this suit:

(a) The aforementioned October 1943 exposition at the open house in the Sciaky plant, at which several General Electric personnel were present inspecting the Sciaky machines there, which machines embodied adjustment for preheat, weld, post-heat, co-ordinated heat and pressure program—features of infringement now accused by General Electric under their Garman, Whiteley and Bivens patents;

(b) several technical papers covering the same subject matter available to the industry and some of them admittedly seen and read by General Electric;

(c) an article in Steel, October, 1944, Exhibit EV;

(d) Solomon's article in Welding Journal (May 1947, Exhibit EI) regarding heat-pressure program as accused under Whiteley;

(e) installment of the Sciaky machine at Bennett-Ireland Company at Norwich, New York (December 1946, Exhibit S);

(f) Sciaky's machine tested at American Locomotive Company, November, 1947;

(g) drawings made available to General Electric's employees, Exhibit DW;

(h) purchase of five Sciaky welders by Hotpoint Company, a subsidiary of General Electric;

(i) tests at Marion, Indiana power plant, (report contained in Exhibit AF);

(j) conferences between Tetaz and General Electric patent department;

(k) charge by Sciaky back in 1948 that General Electric and its customers were infringing on Sciaky's patents;

(l) meeting in 1949 between David Sciaky and General Electric's patent staff at Schenectady;

(m) General Electric's Byer's letter to General Electric's Bailey, Exhibit DO;

(n) direct negotiations between Mott of General Electric and Sciaky in June 1950, Exhibit DS;

(o) rejection by Sciaky in June 1950 of any settlement between Sciaky and General Electric on basis of free exchange of licenses, Exhibit 60; and

(p) knowledge by General Electric that Sciaky on August 21, 1950 was suing Westinghouse for infringement —answers to interrogatories 11(b) and 11(d).

There were still other instances between the forties and early fifties where the secrets of the Sciaky patents and machines became known to General...