Sperry Rand Corp. v. Bell Telephone Laboratories, Inc.

• Decision Date: 06 September 1962
• Citation: 208 F. Supp. 598
• Parties: SPERRY RAND CORPORATION, John Presper Eckert, Jr., and John W. Mauchly, Plaintiffs, v. BELL TELEPHONE LABORATORIES, INCORPORATED, Defendant.
• Court: U.S. District Court — Southern District of New York

208 F. Supp. 598

SPERRY RAND CORPORATION, John Presper Eckert, Jr., and John W. Mauchly, Plaintiffs, v. BELL TELEPHONE LABORATORIES, INCORPORATED, Defendant.

United States District Court S. D. New York.

September 6, 1962.

Byerly, Townsend, Watson & Churchill, New York City, for plaintiffs, C. Blake Townsend, Carroll G. Harper, Robert E. Kosinski, New York City, of counsel.

Henry R. Ashton, New York City, for defendant, Harry R. Pugh, Jr., New York City, William F. Simpson, New York City, of counsel.

DAWSON, District Judge.

This is an action brought by Sperry Rand Corporation and its assignors, Eckert and Mauchly, the dissatisfied parties to a decision of the Board of Patent Interferences of the United States Patent Office, for an order under 35 U.S.C. § 146 directing the Commissioner of Patents to issue them a patent.¹

The interference proceeding involved an application for a patent for an electronic computer by the plaintiffs Eckert and Mauchly, Serial No. 757,158, filed on June 26, 1947, and Williams' application, Serial No. 22784, filed April 28, 1948, a division of an earlier application of Williams, Serial No. 734,661, filed March 14, 1947. The decision of the Board of Patent Interferences in Patent Interference No. 85,809, which was handed down on September 29, 1955, held that the evidence submitted by Eckert and Mauchly was not sufficient to prove a reduction to practice by them prior to the filing of the Williams application on March 14, 1947. The Board of Patent Interferences therefore granted priority to Williams. Subsequently, on December 24, 1957, Patent No. 2,817,477, which includes the counts involved here, was issued to Williams. The Williams applications have been assigned to the defendant Bell Telephone Laboratories, Incorporated.

By stipulation of the parties, as confirmed by an order of this Court dated March 1, 1961, it was agreed that any testimony desired to be presented in this action could be submitted in the form of affidavits, depositions or oral testimony, or in any combination of these forms, that such affidavits should be mutually exchanged prior to trial and that each party should have the right to cross-examine the affiants by deposition under oath. Pursuant to the foregoing stipulation the case on both sides was presented by means of several hundred exhibits and affidavits, without any oral testimony. In this manner what was originally predicted to be a trial of several months' duration was reduced to a single day. At the conclusion of the trial the Court made a physical examination at a New York warehouse of the electronic calculator on which the plaintiffs' application is based. Subsequent to the trial both parties filed elaborate briefs of law and summaries and descriptions of the affidavits and exhibits submitted at the trial.

On the basis of the evidence submitted the Court finds the following facts:

The plaintiffs' patent application and their proofs are all predicated upon an electronic computer known as the "Electronic Numerical Integrator and Computer" (ENIAC). Work on the ENIAC was initially begun under Government contract during World War II in order to develop a computer which would be able to calculate the necessary firing tables for artillery and anti-aircraft pieces. The decision to develop an electronic computer was made by the Ordnance Department after calculations by professional mathematicians and nonelectronic devices proved inadequate. About 1942 the plaintiffs Eckert and Mauchly, who were then teaching at the Moore School of Electrical Engineering of the University of Pennsylvania, developed a plan for an electronic calculator of the general purpose type. When this fact came to the attention of the Army Ordnance authorities they let out a contract to the Moore School for the development of an electronic calculator and actual work on the machine was commenced early in 1943. Physical construction of the final ENIAC machine was completed at the Moore School late in 1945. The significance of the events which transpired in the next eight or nine months in regard to what was done with the ENIAC are crucial to this case and will be discussed in some detail later in this opinion. Both parties agree, however, that on July 25, 1946, title to the ENIAC machine was transferred to the Ordnance Department and by August, 1946, the ENIAC was being put to practical use by the Government in calculating firing tables.

Through the commendable efforts of both parties the issues in this action have been greatly simplified. At an earlier stage of the case the defendant maintained (1) that plaintiffs had not proved the reduction to practice of the invention in issue prior to March 14, 1947, the filing date of the Williams application No. 734,661, (2) that if the ENIAC machine was reduced to practice, the machine was in public use more than one year prior to the filing of the Eckert and Mauchly application on June 26, 1947, so as to bar them from securing a patent, and (3) that even if Eckert and Mauchly had reduced the ENIAC to practice prior to 1947, and even if they were not barred by prior public use, Williams would still be entitled to priority on the basis of his original patent application filed in 1942 and later abandoned in favor of the continuation-in-part 1947 application. The decision of the Board of Patent Interferences with which plaintiffs are dissatisfied rested on the first of the defendant's contentions, namely that plaintiffs had not proved the reduction to practice of the invention in issue prior to March 14, 1947, the filing date of the Williams application. At this trial the plaintiffs introduced a considerable amount of additional evidence which was not presented to the Board of Patent Interferences. The proofs introduced by the plaintiffs on this point have been so convincing that the defendant has abandoned its earlier contention that the plaintiffs did not reduce the ENIAC to practice prior to the date of the Williams application.² The defendant thus recognized that the basis for the decision of the Board of Patent Interferences was erroneous. Although the question of plaintiffs' reduction to practice is no longer disputed by the defendant, it is apparently the duty of the Court, under 35 U.S.C. § 146, to pass on the issue. Accordingly, the Court has made an independent examination of the evidence and concludes, in accordance with what both parties recognize, that the ENIAC must be regarded as having been reduced to practice at least by August 7, 1946 when it was first used in the solution of an actual problem the results of which were put to practical use. The decision of the Board of Patent Interferences awarding priority to Williams on the basis of plaintiffs' failure to prove a reduction to practice of their invention, must therefore be set aside. This disposes of the first of the defendant's original contentions.

In addition, after considering the available evidence and the difficulties of proof, the defendant does not now rely on the 1942 application filed by Williams.³ This disposes of the third of the defendant's original contentions.

There remains for consideration the sole issue on which the defendant now bases its case, namely, that the ENIAC was in public use for more than one year prior to the filing of the Eckert and Mauchly application on June 26, 1947 and therefore that the invention is ineligible for a patent under 35 U.S.C. § 102.⁴

There is a dispute as to whether the question of prior public use is a proper issue in this case at all. The plaintiffs contend that the question of public use relates to the patentability of the invention, rather than to the question of priority which is the subject of this proceeding on appeal from the Patent Office. However, since the relief sought in this case is to direct the Commissioner of Patents to issue a patent to the plaintiffs, such relief could not be given unless the Court were satisfied that the plaintiffs were in all respects entitled to a patent.⁵ It appears that in a Section 146 proceeding where the issue of priority is resolved in favor of the plaintiff the court is required to consider whether the plaintiff is in all respects entitled to a patent. Hill v. Wooster, 132 U.S. 693, 10 S.Ct. 228, 33 L.Ed. 502 (1890); Sinko Tool & Mfg. Co. v. Automatic Devices Corp., 136 F.2d 186, 189 (2d Cir. 1943); Wiegand v. Dover Mfg. Co., 292 F. 255 (N.D.Ohio 1923).

In Sanford v. Kepner, 344 U.S. 13, 73 S.Ct. 75, 97 L.Ed. 12 (1952) it was held that in a Section 146 proceeding where the plaintiff had not established priority, the court was not required to pass on the patentability of the defendant's invention. In accordance with that decision this Court, at an earlier stage of this action, denied the motion of the plaintiffs to amend their complaint so as to raise the issue of the patentability of the defendant's invention. Sperry Rand Corp. v. Bell Telephone Laboratories, Inc., D.C., 171 F.Supp. 343 (1959), motion for re-argument denied, D.C., 173 F.Supp. 714 (1959), leave to appeal denied, 272 F.2d 29 (2d Cir. 1959). The situation is entirely different, however, where the plaintiff is able to establish priority, since it then becomes necessary for the Court to adjudicate the question of patentability of the plaintiffs' invention in order to be able to direct the Commissioner to issue a patent to the plaintiffs. Hill v. Wooster, supra.

The Court will therefore consider the question of public use.

The defendant relies on a number of events which took place prior to June 26, 1946, which allegedly constitute a public use of the invention for one year prior to the application for the patent. The plaintiffs, on the other hand, contend that all uses of the ENIAC machine prior to the date on which it was turned over to the Ordnance Department were experimental and not public uses. The principal incidents on which the defendant relies to show public use are the following:

(1) Commencing in the...