The opinion of the court was delivered by: BYERS
The plaintiffs sue in equity for alleged infringement of United States Letters Patent No. 1,141,402, issued June 1, 1915 (application filed June 19, 1913), and No. 1,784,674, issued December 9, 1930 (application filed July 14, 1923). For convenience, these will be referred to hereinafter as the first and second patents.
Both were issued to the plaintiff Mershon, who, in turn, licensed the corporate plaintiff's predecessor to make, use and sell the inventions covered by the said patents.
The device involved is known as an electrolytic condenser, and, in the form presently involved, is used in the so-called power pack of a radio receiving set in domestic use.
The office of the device is to remove the so-called hum incident to the employment of alternating current, which hum is loud enough to be incompatible with the kinds of noise which it is the purpose of the radio to reproduce.
The purpose is accomplished by passing the current into the condenser in the condition in which it emerges from the rectifier. The alternating current as it is received into the power pack is characterized by the two phases peculiar to such a current, which are due to its origin; in the rectifier, the polarity of the current is rendered unidirectional, but it is still a pulsating current, and these pulsations cause the hum.
The electrolytic condenser receives the rectified current, and so delivers it that the pulsations are flattened out, and the current may be visualized as almost a straight line of unidirectional constituency.
The device has been successful in the practical and commercial sense; otherwise this litigation would not have arisen.
The Electro Formation, Inc., is the successor to Amrad Corporation to which the Mershon licenses were granted; the latter company was financially embarrassed, and during the year 1926 it was manufacturing an electrolytic condenser on a very small scale, and its property and assets were taken over by the interests which now control the Electro Formation, Inc., during the winter of 1926-27. The precise steps by which this result has been accomplished are of no importance, but the fact is that, beginning in 1927, such a condenser was manufactured and sold by the Amrad Corporation in substantial volume; that is to say: 77,000 in the year 1927; 422,000 in the year 1928; 741,000 in 1929; 651,000 in 1930, and over 1,700,000 in 1931.
During the second half of 1929, the defendant corporation, through its representative and present President, Mr. Robert C. Sprague, interviewed the then active head of the Amrad Corporation, Mr. Hahn, on two or three occasions, with respect to a possible license to the defendant company, to enable it to manufacture the plaintiffs' condenser.
During the latter part of the same period of time, a member of the laboratory staff of the then Amrad Corporation, Mr. Appleton, and Mr. Sprague had a conversation, following which Mr. Appleton entered the employ of the defendant.
Mr. Petrie, one of the Amrad salesmen, was hired by the defendant company during 1930.
Mr. Clark, described as a "sales engineer," left the Amrad Corporation around the 1st of October, 1929, and was employed by the defendant company.
Mr. Gasset, who is said to have related that he had been temporarily laid off by the Amrad Corporation, was hired by the defendant; the precise time is not stated, but he is said to have had charge of the mechanical assembly of the different parts of the defendant's device since entering its employ.
Mr. Conrad was in the employ of the Amrad Corporation, as foreman in electrolytic condenser production, and left because of failing health in the fall of 1928; about one year later, he entered the employ of the defendant company, and remained for eighteen months or so. His duty consisted in setting up equipment and general work on making samples of electrolytic condensers.
As to the first four of the above named, the evidence is in conflict as to whether the hiring was the cause of the breaking off of the negotiations for a license or not. Mr. Hahn, testifying for the plaintiff, said that it was; Mr. Sprague, testifying for the defendant, said that negotiations came to nothing because of delay on the part of Mr. Hahn in reaching a definite conclusion. It is clear, at least, that prior connection with the plaintiff was not regarded as a disqualification for later employment of these several persons by the defendant.
Samples of the defendant's product were circulated among the trade in January, 1930, and production began at their plant in North Adams, Mass., on or about April 1, 1930, and since that time the competition between the two companies has been active and sustained.
The similarity of the devices is so marked that little or no argument was made on the subject of infringement.
The defendant relies on two major propositions: (a) that neither the plaintiffs' nor the defendant's device is an embodiment of either patent, and (b) that the patents in suit are invalid for lack of invention.
The outward appearance of the two devices is strikingly similar. Plaintiffs' exhibits 6, 7, 8 and 9 are the defendant's product, and are copper cylinders, about 4 3/8 inches in height, having a diameter of about 1 3/8 inches, the bottom being enclosed in a brass cap having apertures at its base, and the top presenting the appearance of a black disk with a projecting member about 5/16 of an inch in height, for connection to an electrical circuit.
Plaintiffs' Exhibit 12 and defendant's Exhibit A are the plaintiffs' device, namely, a copper cylinder about 5 1/16 inches in height, having a diameter of 1 3/8 inches; the bottom consists of a copper cap having apertures at its base. The construction at the top presents a slightly different appearance from that of the defendant's product, in that the connecting member projects about 7/8 of an inch. The plaintiffs' device is labeled, and the defendant's in evidence is not.
It will be convenient to examine the first contention, because manifestly, if the plaintiffs' device does not embody the patents in suit, there can be no basis for relief.
The first patent, No. 1,141,402, has to do with certain improvements in electrolytic apparatus employing filmed electrodes. Claim 5, upon which the plaintiffs rely, reads as follows: "5. An electrolytic condenser comprising a containing vessel; aluminum electrodes therein, coated with heat-resistant electrolytic films; and an original electrolyte in the vessel, containing borax and a free acid."
The patent was issued June 1, 1915, and a disclaimer was filed November 19, 1929, by the patentee, the licensee, the Amrad Corporation, acquiescing, thus: the patentee "therefore disclaims from the scope of said Letters Patent any acidulated electrolyte which is not acidulated with an inorganic acid such as boric or phosphoric acid."
The evidence demonstrates that, at the time of the issuance of this patent, an electrolytic condenser for use in the power pack of the receiving set of a radio was not in demand; nor was such demand anticipated.
The requirement which the condenser was designed to meet had to do solely with other employment of alternating current.
The application of the condenser principle to the radio receiving set was the direct result of the attachment thereof to the ordinary household source of alternating current. That the Mershon condenser might have a future in connection with radio was appreciated as early as 1922, when Professor Pupin first employed the Mershon electrolytic condenser which is plaintiffs' Exhibit 29, having a capacity of about 40 microfarads.
That condenser appears to be an aluminum can, 4 inches high and 3 inches in diameter, and having a black rubber cap constituting the top, upon which appears the following: "Mershon Electrolytic Condenser Manufactured under patents of Ralph D. Mershon -- Dec. 26, 1911, June 24, 1913, June 1, 1915, June 18, 1918, Dec. 23, 1919. Other patents pending."
Thus it was asserted by the predecessor of the corporate plaintiff as early as 1922 that the electrolytic condenser which it then made and sold embodied the invention disclosed in the first patent now involved.
The latter opens with the statement that the action of electrolytic condensers, rectifiers, and similar devices depends upon the film which may be formed upon the surface of the aluminum, tantalum, magnesium and other metals when immersed in certain electrolytes and subjected to the electric current. Continuing, it is related that, in order that the film produced in the ordinary manner shall evidence to an efficient degree its necessary qualities of high specific resistance and high dielectric strength the temperature at which the film-coated electrode is used must not be much, if any, above a certain value -- about 40 degrees C. As the temperature approaches that point, the film begins to lose the necessary qualities.
Reference to prior patents is made, in which the inventor recites that he has described several effective methods of forming films which possess temperature-resistant properties, and he says: "and in the application mentioned I have described and claimed broadly the article having such a film. Reference may be made to said patent and application for a full and detailed description of the preferred modes of procedure in producing the film." In such production, it is essential that, during or after its formation, the film is subjected to a higher temperature than in actual use.
The recital continues to the effect that the electrode must be chemically clean, and then immersed in a solution, "preferably saturated, of borax or other suitable film-producing agent, and is connected to one terminal of a source of current, either alternating or direct, at a suitable voltage as will be explained hereinafter. The other terminal of the source is connected to the electrolyte as by means of a suitable cathode immersed therein or by connecting the terminal to the vessel containing the electrolyte if such vessel is of conducting material."
The process of forming the film is then described, and this involves the application of the electric current; at the conclusion of which the recital continues: "On examining the article it will be found coated with a closely adherent film, harder than the metal on which it is formed and less subject to scratching and abrasion, resistant to acids, and in color varying from bronze to greenish bronze or brownish bronze."
The inventor prefers to start the formation of the film with the film-producing agent at boiling temperature, but this is not essential; it may be cold at the start, and have its temperature raised as the formation of the film goes on; it is desirable, however, that the solution be boiling when the forming current is turned off, to prevent the adhesion of bubbles to the surface of the article. The necessity for having the bath boiling briskly for some time before the current is turned off is explained.
The part which voltage plays in the production of the film is described, and the recital continues: "If instead of using a simple solution of a film-forming salt as above described, the bath be acidulated with one or another of the acids whose salts may be used as film-producing agents, as for example borax, or phosphoric acid, etc., the process of forming the heat-treated film is considerably expedited. The amount of acid used may be varied according to circumstances but I have obtained good results with a bath made up in the proportion of two gallons of the saturated borax solution, three pounds of boric acid, and an additional half pound of borax."
"The film produced as above described is believed to be composed in part of the metal on which it is formed in chemical combination with one or more of the elements composing the bath. Thus in the case of aluminum treated in a borax solution the film is composed in part of aluminum. I am not certain what the other constituent or constituents are, but careful analysis indicates that the film is a form of, or is composed largely of, aluminum hydrate."
The inventor says that he has discovered that, while electrodes having the heat-resistant films described can be advantageously used in any electrolyte, in an electrolytic condenser, rectifier or other apparatus, "they do not evidence to the fullest extent their remarkable property of withstanding high temperatures unless they are used (1) in the identical solution, originally acidulated or unacidulated, in which the films were formed or subjected to the heat-treatment; or, (2) in some other, but acidulated, electrolyte. That is, if the films are not used in the identical electrolyte of their formation or heat-treatment, then whatever electrolyte they are used in must be acidulated. It is this discovery that forms the subject of the present application for Letters Patent. In the appended claims I have used the term 'an original electrolyte' to mean the first electrolyte or its equivalent, an acidulated electrolyte."
The best results have been obtained by the inventor -- that is, the best results obtainable with a fresh electrolyte -- with an electrolyte of the following proportions: Distilled water, one gallon; boric acid, one and a half pounds; borax, one quarter pound.
The drawing is described as showing a cross section of a simple electrolytic condenser, namely, a vessel containing the electrolyte and six electrodes; three connected to one terminal, and three connected to the other terminal. The heat-resistant films, greatly exaggerated in thickness, are shown, as is the electrolyte, namely, the identical electrolyte in which the films were formed or subjected to the necessary heat-treatment; or some other electrolyte, which is acidulated.
The office of the film is to furnish the dielectric; i.e., the non-conductor, between the two conducting elements of the condenser; namely, the aluminum electrode and the electrolyte.
A condenser as originally conceived is described by the plaintiffs' expert, Mr. Waterman, as consisting of two conducting bodies separated by an insulating material, referred to as a dielectric. He states that a typical condenser may be thought of as a sheet of glass, paper, mica, or other suitable insulator, having on each side of it a metal plate such as a tinfoil sheet; these were called the armatures, and are connected to the opposite poles of a source of current; when this is done, a stress is set up in the non-conductor, and, if the charging potentials be then removed, it will be found on connecting the two armatures that a discharge will take place, showing that electricity has, so to speak, been stored. The energy which was imparted to the non-conductor has been returned to the electric circuit by connecting the two plates together.
The electrolytic condenser consists, therefore, of the aluminum electrode as one armature, and the electrolyte as the other, while the film constitutes the dielectric or non-conducting element.
The plaintiffs' device in suit contains a filmed aluminum anode immersed in an electrolyte; the whole contained in a copper can, which is said to constitute the cathode, i.e., that into which the current passes from the electrolyte.
The aluminum element is 2 inches in height having a diameter of about 1 inch, composed of a strip rolled around and attached to an aluminum rod, and presents a cylindrical appearance; the total area of the aluminum anode is about 80 square inches.
The defendant's anode is a very thin aluminum sheet which has been so disposed that it has also assumed a cylindrical form, made up of a number of coils, and, while the cylinder itself is only about 2 1/4 inches in height by about 1 1/8 inches in diameter, the succession of circular coils, if they may be so described, result in presenting an area of over 64 square inches, compressed into a compass of the dimensions stated. Such an anode is plaintiffs' Exhibit 14.
The electrolyte contained in each device is acidulated, and is composed of borax, boric acid and water, although the formulas differ.
Chemical analysis shows the following comparison between the contents of the plaintiffs' electrolyte and that of the defendant:
A liter of the former contains 16.09 grams of borax and 80.45 grams of boric acid, and the balance water; a liter of the defendant's electrolyte contains 6.3 grams of borax, 69.7 grams of boric acid, and the balance water.
Returning now to the first patent, the testimony stands uncontradicted that it teaches an aluminum electrode which is coated with a heat-resistant film which is formed so as to withstand a temperature higher than that at which it will be used.
The device is not perfect; that is to say, a portion of the current penetrates the film, and this is called the leakage current. The high heat-resistant property is requisite because this leakage current produces additional heat in the condenser; it is necessary therefore to the success of the condenser, that the amount of leakage current be held to an absolute minimum; to the extent that the film is punctured by the leakage current, a self-healing process in the film is set up and operates. These properties have been secured, according to the testimony, by reason of the fact that the film is formed at a high temperature. It is stated that no one is able to give the reason for this fact, the result having been arrived at through the well known trial and error process. The evidence demonstrates that the plaintiffs' condenser contains a film so formed.
As has been said, the plaintiffs' condenser has been shown to consist of a copper container having in it an electrolyte comprised of borax, boric acid and water, which had been acidulated, and suspended in the electrolyte is an electrode, being a rolled sheet of filmed aluminum coiled around an aluminum post designed to be connected with the positive source of potential.
One question presented seems to be, whether the aluminum electrode so constituted is the same thing as the plurality of electrodes shown in the patent, namely, six condenser electrodes, three connected to one terminal, and three to the other.
The drawing shown in the patent was intended to illustrate the operation of the apparatus on a circuit containing only alternating current, and, when the device was so employed, three of the anodes accepted current of one polarity, and, in the next phase of the cycle, the second three accepted current of the same polarity as did the first three during the initial phase. ...