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RCA v. RADIO ENGG. LABS.

August 29, 1932

RADIO CORPORATION OF AMERICA et al.
v.
RADIO ENGINEERING LABORATORIES, Inc.



The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This is an action brought to secure relief by injunction and damages for the alleged infringement of patent No. 1,507,016, issued to Lee De Forest, assignor to De Forest Radio Telephone & Telegraph Company, for Radio Signaling System, dated September 2, 1924, on an application filed September 23, 1915; and of patent No. 1,507,017, issued to Lee De Forest, assignor to Radio Telephone & Telegraph Company, for Wireless Telegraph & Telephone System, dated September 2, 1924, on an application filed March 20, 1914.

The plaintiff Radio Corporation of America has rights under the patents in suit, including an exclusive license in the field in which the defendant is alleged to be infringing, and the plaintiffs American Telephone & Telegraph Company and De Forest Radio Company hold other exclusive right and title under the said patents.

 The plaintiffs are corporations and have sufficient right, title, and interest in the patents in suit to enable them to maintain this suit.

 The defendant is a New York corporation, doing business in the borough of Queens, city of New York, and is there engaged in the manufacture and sale of radio transmitting and receiving apparatus, charged in this suit to infringe.

 Mr. Armstrong, whose patent rights in patent No. 1,113,149 were acquired by the Westinghouse Electric & Manufacturing Company, is actually defending this suit and paying the expenses thereof, and while his purpose undoubtedly is to endeavor to again try out the issue of priority of invention between him and Dr. De Forest, we must not lose sight of the fact that this is simply a suit for infringement, to be determined on the law and the facts.

 The patent in suit No. 1,507,016 is for the invention known as the "oscillating audion," and the patent in suit No. 1,507,017 is for the invention known as the "feed back circuit."

 The invention in issue was a tremendous improvement in radio signaling systems. It increased the sensitiveness of the audion radio receiver hundreds of times, and its fundamental value as a regenerator of radio frequency currents in radio transmission systems, and in high frequency carrier current telephony is great.

 The invention of patent No. 1,507,017 in suit, known as the "feed back circuit," is a general type of circuit employed with the three-electrode vacuum tube or audion, wherein current flowing in the plate filament or "output" circuit of the audion is fed back to the grid filament or "input" circuit thereof, so that the audion acts over and over again upon the same current, amplifying it each time it passes through the tube. Such action of the audion with its feed back circuit is also referred to as regenerative action. The employment of such regenerative action beyond a predetermined extent, for example, to the maximum extent, causes the audion with its feed back circuit to become a source of continuous oscillations, the audion becoming a generator of alternating currents, which are sustained in the sense that the generation thereof continues until the circuit is altered, or the audion tube becomes inoperative.

 The invention of patent No. 1,507,016 in suit is the audion with its feed back circuit and instrumentalities adjusted to produce sustained oscillations known as the "oscillating audion" or "audion oscillator."

 This suit is based upon claims 24, 25, 26, 27, and 28 of patent No. 1,507,016, which are broadly defined as methods and means for producing sustained electrical oscillations, or electrical alternating currents; and claims 15, 17, 18, 19, 20, and 21 of patent No. 1,507,017, claims 15, 17, and 18 being defined as "In a radio signaling system," and claims 19, 20, and 21, as "In an electrical system."

 The defendant prior to the filing of the bill herein made and sold a wireless transmitter, Exhibit 3, and a wireless receiver, Exhibit 4. The said transmitter, Exibit 3, employs an oscillating audion producing continuous electrical oscillations in the manner disclosed and claimed in patent No. 1,507,016 in suit, by virtue of a feed back circuit arrangement disclosed in patent No. 1,507,017 in suit.

 In the said transmitter the electrical coupling of the output and input circuits of the oscillating audion is of the electrostatic or condenser type, sometimes referred to as a capacity coupling, and the feed back is accomplished by a variable, tuned plate circuit, so that the plate potential is effective across the capacity coupling within the tube and energy is fed back to the grid circuit.

 The said receiver, Exhibit 4, embodies the feed back or regenerative circuit of the two patents in suit, the feed back being of the tickler type, in which the coupling between the input and output circuits is effected inductively.

 The receiver may be so adjusted when in use that the feed back effected is just below the amount necessary to reach the point of generation of continuous oscillations, and the apparatus may be employed to receive radio signals of the damped wave type, or it may be so adjusted that the maximum feed back is effected and the audion system becomes a source of continuous oscillations, and the apparatus may be employed to receive radio signals of the continuous wave type, which last-mentioned method of reception is known as the "beat" or "heterodyne" method.

 It was admitted that defendant's apparatus contains the regenerative or feed back circuits, and that oscillations are produced thereby.

 The claims of the patents in suit upon which this suit is based are infringed by defendant's transmitter and receiver, Exhibits 3 and 4, except that claim 24 of patent No. 1,507,016 in suit, calling for an inductive coupling between the circuits, is not infringed by the transmitter, Exhibit 3, but is infringed by the receiver, Exhibit 4.

 Before proceeding to consider the defenses interposed by the defendant in this suit, we must consider the following prior adjudications involving the invention of the patents in suit, to determine whether and to what extent such adjudications are binding authority upon this court and the defendant in this suit:

 (1) An interference proceeding in the Patent Office involving patent applications which had been filed by (a) Armstrong (whose patent rights were acquired by the Westinghouse Electric & Manufacturing Company); (b) De Forest (whose rights were owned by the De Forest Radio Company and American Telephone & Telegraph Company); (c) Langmuir (whose rights were owned by the General Electric Company); and (d) Meissner (a German inventor whose rights were taken over by the Alien Property Custodian, whose interests were represented by the government.

 This interference proceeding reached the Court of appeals for the District of Columbia, which found that De Forest was the prior inventor. De Forest v. Meissner, 54 App. D.C. 391, 298 F. 1006. As a result the two patents in suit issued to De Forest.

 (2) During the pendency of the said interference controversy before the Patent Office tribunals, and before it was decided by the Court of Appeals for the District of Columbia, the Armstrong patent, No. 1,113,149 (which was not expressly involved in the interference proceedings, a supplemental application of Armstrong for the oscillating audion being directly involved in that proceeding), was the basis of an infringement suit brought by Armstrong and the Westinghouse Company against the De Forest Company, in the Southern District of New York. There was interposed in that case, among others, the defense that De Forest was the prior inventor of the subject-matter of the Armstrong patent. Judge Mayer overruled this defense and found certain claims of the Armstrong patent to be valid and to have been infringed by certain audion heterdoyne receiving apparatus manufactured by the De Forest Company (Armstrong v. De Forest Radio Telephone & Telegraph Co., 279 F. 445), and was affirmed by the Circuit Court of Appeals for the Second Circuit (280 F. 584).

 (3) Thereafter a number of suits were brought on the Armstrong patent, in the Southern District of New York, including Westinghouse Electric & Mfg. Co. v. Independent Wireless Tel. Co. (D.C.) 300 F. 748, and Westinghouse Electric & Mfg. Co. v. Taub, 4 F.2d 605, in which the apparent discrepancy between the opinions of the Court of Appeals of the District of Columbia and Circuit Court of Appeals of the Second Circuit, as to priority of invention, was considered. In each of those cases the court held that, until the Supreme Court decided the controversy, the decision of the Circuit Court of Appeals for the Second Circuit was controlling on them.

 The question of priority of invention was not in issue in Westinghouse Electric & Mfg. Co. v. Royal-Eastern Electrical Supply Co., 9 F.2d 397, decided by this court.

 (4) Meissner, one of the unsuccessful parties in the interference proceeding, filed a suit in the District Court of Delaware, under section 4915, R.S. (35 USCA § 63), to procure a decree that the Commissioner of Patents, notwithstanding the adverse decisions of the Court of Appeals for the District of Columbia, grant to him a patent for the invention. De Forest, Armstrong, and Langmuir (with their assignees) were named as defendants in the case. Armstrong and Langmuir filed answers including counterclaims, and each prayed for a decree directing the Commissioner of Patents to issue a patent to him for the invention. De Forest and his assignee, as well as the American Telephone & Telegraph Company, filed answers to the original bill and replies to the counterclaims, affirmatively asserting that De Forest was the first inventor of the subject-matter.

 (5) After the issuance of the De Forest patents, the De Forest Company, as assignee thereof, filed a suit under section 4918, R.S. (35 USCA § 66), in the District Court for the Eastern District of Pennsylvania, against the Westinghouse Company, the assignee of Armstrong. This bill charged that the De Forest patents and the Armstrong patent, No. 1,113,149, were interfering patents within the meaning of section 4918, R.S., and prayed for a decree invalidating and canceling the Armstrong patent, because De Forest was the prior inventor of the subject-matter thereof. The Westinghouse Company filed an answer denying invention by De Forest, setting up the decree in the New York case as res adjudicata, and that De Forest patent, No. 1,507,017 was void as to all subject-matter thereof which was common to the Armstrong patent, because it was not filed within two years after the grant of the Armstrong patent. The case was tried before Judge Thompson, who held (De Forest Radio Telephone & Telegraph Co. v. Westinghouse Electric & Mfg. Co., 13 F.2d 1014) that the De Forest patents, as to the claims in issue in this suit, and the Armstrong patent, as to claims 1, 2, 3, 5, 8, 9, 12, 14, 15, 16, 17, and 18 thereof, were interfering patents under section 4918, R.S.; that De Forest was the first and original inventor of the claims in issue of the patents in suit; and that those claims had not been anticipated by Armstrong.

 That the additional evidence of the Westinghouse Company in its defense of the case had not overcome the evidential effect of the decision of the Court of Appeals of the District of Columbia, under the rule of Morgan v. Daniels, 153 U.S. 120, 14 S. Ct. 772, 38 L. Ed. 657, and that the interfering claims of the Armstrong patent were void and should be canceled.

 (6) Thereafter the case in the District of Delaware came on for trial on the stipulated record in the Philadelphia suit and additional evidence offered on behalf of Meissner and Armstrong, before Judge Morris, who held (U.S. v. De Forest Radio Telephone & Telegraph Co., 18 F.2d 338) that the plaintiffs and counterclaimants in the action had not adduced new evidence of the character and amount necessary to overcome the evidential effect of the decision of the Court of Appeals of the District of Columbia, under the rule of Morgan v. Daniels; and that on all the evidence De Forest was the first inventor of the subject-matter of his patents, and that the award to him of priority of invention by the Court of Appeals of the District of Columbia was correct, and this irrespective of the rule of Morgan v. Daniels.

 (7) Appeals were taken by Armstrong and Westinghouse in both the Delaware and Philadelphia cases, and by the United States in the Delaware case, to the Circuit Court of Appeals for the Third Circuit, which court affirmed the decrees of both District Courts (Westinghouse Electric & Mfg. Co. v. De Forest Radio Telephone & Telegraph Co., 21 F.2d 918), and held that new evidence had not been adduced of the character required to overcome the effect of the decision of the Court of Appeals of the District of Columbia, under the rule of Morgan v. Daniels; that independently of the decision of the Court of Appeals of the District of Columbia, the evidence established that De Forest was the first inventor of the subject-matter of his patents, and conceived the invention thereof, and reduced it to practice on August 6, 1912, and that the De Forest patents and Armstrong patent were, as to the claims above mentioned, interfering patents within the meaning of section 4918, R.S., and that the claims mentioned of the Armstrong patent should be canceled as invalid and void.

 (8) Armstrong and the Westinghouse Company then petitioned the Supreme Court, in both cases, for a writ of certiorari directed to the Circuit Court of Appeals for the Third Circuit, asserting among other grounds therefor the diversity of opinion between the Circuit Court of Appeals for the Third Circuit and the Circuit Court of Appeals for the Second Circuit, on the issue of priority of invention between De Forest and Armstrong. Certiorari was granted by the Supreme Court (Westinghouse Electric & Mfg. Co. v. De Forest Radio Telephone & Telegraph Co., 276 U.S. 610, 48 S. Ct. 302, 72 L. Ed. 730), and the cases were argued before that court, which affirmed the Circuit Court of Appeals of the Third Circuit, upon the authority of Morgan v. Daniels, 153 U.S. 120, 14 S. Ct. 772, 38 L. Ed. 657, and Victor Talking Machine Co. v. Brunswick-Balke-Collender Co., 273 U.S. 670, 47 S. Ct. 474, 71 L. Ed. 832. Westinghouse Electric & Mfg. Co. v. De Forest Radio Telephone & Telegraph Co., 278 U.S. 562, 49 S. Ct. 34, 73 L. Ed. 507. A petition for rehearing was denied.

 (9) The present plaintiffs, in January, 1930, instituted suit in the District Court of Delaware against the Universal Wireless Communication Company, for infringement of the same claims of the two De Forest patents as are in issue here. Judge Morris, after a hearing on affidavits filed by both parties, granted a preliminary injunction, and thereafter, on a trial on the merits before him, granted an interlocutory decree holding the patents in suit valid and infringed. No appeal was taken.

 A consideration of these cases leads me to the conclusion that as to Mr. Armstrong, the decisions of the Supreme Court, the Circuit Court of Appeals, and the District Courts of the Third Circuit, are res adjudicata; but it seems to me that they are not res adjudicata as to the defendant.

 I cannot, however, as defendant suggests, limit the effect of those decisions, especially that of the Supreme Court, to strengthening the presumption of validity of the patents in suit to the extent to which the decision carries conviction.

 The Supreme Court, in Victor Talking Machine Co. v Brunswick-Balke-Collender Co., 273 U.S. 670, 47 S. Ct. 474, 71 L. Ed. 832, which was a suit under section 4918, did not base its decision solely on Morgan v. Daniels, 153 U.S. 120, 14 S. Ct. 772, 38 L. Ed. 657, which was a suit under section 4915, but also on United States v. State Investment Co., 264 U.S. 206, 211, 44 S. Ct. 289, 68 L. Ed. 639; Brewer Co. v. United States, 260 U.S. 77, 86, 43 S. Ct. 60, 67 L. Ed. 140; Bodkin v. Edwards, 255 U.S. 221, 223, 41 S. Ct. 268, 65 L. Ed. 595; National Bank of Athens v. Shackelford, 239 U.S. 81, 82, 36 S. Ct. 17, 60 L. Ed. 158; Wright-Blodgett Co. v. United States, 236 U.S. 397, 402, 35 S. Ct. 339, 59 L. Ed. 637; Washington Securities Company v. United States, 234 U.S. 76, 78, 34 S. Ct. 725, 58 L. Ed. 1220; Texas & Pacific Company v. Louisiana Railroad Commission, 232 U.S. 338, 339, 34 S. Ct. 438, 58 L. Ed. 631; Chicago Junction Railway Company v. King, 222 U.S. 222, 224, 32 S. Ct. 79, 56 L. Ed. 173; Page v. Rogers, 211 U.S. 575, 577, 29 S. Ct. 159, 53 L. Ed. 332; Dun v. Lumbermen's Credit Ass'n, 209 U.S. 20, 24, 28 S. Ct. 335, 52 L. Ed. 663, 14 Ann. Cas. 501; and Charleston, South Carolina, Mining & Mfg. Co. v. United States, 273 U.S. 220, 47 S. Ct. 348, 71 L. Ed. 618.

 The only case cited by the Supreme Court in Victor v. Brunswick, supra, which was brought under section 4915 or section 4918, was Morgan v. Daniels, supra; the others were cases at law or in equity, in all of which the Supreme Court had followed its rule that concurrent findings of fact of the lower courts will be accepted and not disturbed unless clear or plain error appears on a review of the record.

 In some of the cases so cited in the decision in Victor v. Brunswick, supra, the Supreme Court in its opinion had recited the evidence, and in others it had stated that it was not necessary so to do.

 Whether the Supreme Court intended to base its decision on the rule that concurrent findings of fact of the lower courts will be accepted and not disturbed, or not, does not change the fact that this court, on substantially the same evidence, would be obliged to follow the Supreme Court.

 Under the circumstances it seems to me that the Supreme Court must have reviewed the evidence before both the Circuit Court of Appeals for the Second Circuit, and the Circuit Court of Appeals for the Third Circuit, because the diversity of their opinions was the principal ground of the application for certiorari, and having determined that the decision of the Third Circuit Court of Appeals was right, accepted the concurrent finding of facts of the courts of the Third Circuit. This of necessity included the finding that De Forest made the invention of the claims in issue of the patents in suit, that those claims were patentable, and that they were not anticipated by the Armstrong patent. In any event, on all of the evidence, it accorded priority to De Forest of the invention of the patents in suit.

 Of course, this court is bound to follow the Circuit Court of Appeals of this circuit on questions of validity or construction and infringement of a patent, where there is no materially new evidence, unless the Supreme Court has rendered a different decision, in which case this court is bound to follow the Supreme Court. Lektophone Corp. v. Miller Brothers Co. (D.C.) 37 F.2d 580.

 We must not lose sight of the fact that certiorari was granted by the Supreme Court on a petition which cited, among other grounds, the diversity of opinion between the Circuit Court of Appeals for the Third Circuit and the Circuit Court of Appeals for the Second Circuit, on the issue of priority of invention between De Forest and Armstrong.

 On the evidence before the Supreme Court, priority of invention was accorded to De Forest over Armstrong, and unless new evidence is presented in the instant suit which this court believes would have changed the opinion of the Supreme Court in the former suit, this court is bound to follow the opinion of the Supreme Court. American Bell Tel. Co. v. Wallace Electric Tel. Co. (C.C.) 37 F. 672; Birmingham Cement Mfg. Co. v. Gates Iron Works (C.C.A.) 78 F. 350, Westinghouse Air Brake Co. v. Christensen Engineering Co. (C.C.) 113 F. 594, 595; American Bell Tel. Co. v. Southern Tel. Co. (C.C.) 34 F. 795, 796; American Bell Tel. Co. v. McKeesport Tel. Co. (C.C.) 57 F. 661; American Middlings Purifier Co. v. Christian, 1 Fed. Cas. page 683, No. 307.

 There is no reason to believe that on the same evidence the Supreme Court would change its opinion, and this court cannot assume that it would do so.

 The defendant is entitled to its day in court and to a consideration of all the evidence to determine whether on all of the evidence presented there is materially new evidence which would warrant this court in believing that if such evidence had been before the Supreme Court, it would have changed the opinion of that court.

 It does not seem to me that the authorities cited by the defendant entitle it to a more favorable rule.

 All the rights given by section 4914, R.S. (35 USCA § 62), are preserved, and the defendant may offer any evidence that it may have, and it is not concluded by prior decisions (Reckendorfer v. Faber, 92 U.S. 347, 352, 23 L. Ed. 719; Butterworth v. Hoe, 112 U.S. 50, 60, 5 S. Ct. 25, 28 L. Ed. 656; Frasch v. Moore, 211 U.S. 1, 9, 10, 29 S. Ct. 6, 53 L. Ed. 65), but may offer proof of knowledge or invention by another prior to the applicant's filing date, and thus overcome the presumption that the patentee was the first inventor; and the patentee must then show to the satisfaction of the court that he is in fact the first inventor (Clark, etc., v. Willimantic, etc., Co., 140 U.S. 481, 492, 11 S. Ct. 846, 35 L. Ed. 521; New England, etc., Co. v. B.F. Sturtevant Co. [C.C.A.] 150 F. 131); but if no new evidence is offered, and the evidence offered does not materially differ from that in the case decided by the Supreme Court, then the opinion of that court must be followed; and this seems to be in accord with the opinion in Thacher v. Town of Falmouth (C.C.A.) 241 F. 869, 871, 872.

 There must be some finality, even in patent litigation, where in a number of cases the evidence is substantially the same, and that applies with great force to this suit, because if materially new evidence has not been presented on this trial, which was not before the Supreme Court, then the opinion of that court is and should be final, upon the question of invention and priority of invention in this suit.

 However desirable it may be to establish the date of invention once for all, I can find no authorities which sustain the contention of the plaintiffs that by virtue of the Supreme Court decision, the prima facie date of invention of the patents in suit is August 6, 1912; on the contrary, it appears to me that the date of invention is a question of fact to be proven on the trial of the instant suit, and if the evidence is the same as in the former suit before the Supreme Court, and no materially new evidence is offered, then the opinion of the Supreme Court as to the date of invention is binding on this court.

 We will now consider, in the order named, the defenses on which defendant relies.

 1. Defendant attacks the validity of both patents on the ground that the invention therein disclosed and claimed, and which defendant is charged with appropriating, was invented by Armstrong before it was invented by De Forest.

 2. The validity of patent No. 1,507,017 is further attacked on the ground that the subject-matter thereof is not the sole invention of De Forest, but is the joint invention of De Forest and Logwood, and has been patented to De Forest and Logwood in their earlier patent No. 1,170,881, of February 8, 1916.

 Considering the first defense, prior invention, it appears that the application for De Forest patent, No. 1,507,017, was filed March 20, 1914, and the application for De Forest patent, No. 1,507,016, was filed September 23, 1915.

 The application for the Armstrong patent, No. 1,113,149, was filed October 29, 1913, and while it is disputed that the completion of the invention disclosed and claimed in Armstrong's patent was as early as January 31, 1913, no new evidence was offered on that phase of the case, and that was the date accorded to Armstrong by the courts of this circuit, which the Supreme Court did not disturb.

 Therefore the question at issue under this defense is whether De Forest made the invention prior to January 31, 1913.

 Some contentions can be disposed of before entering into a consideration of the evidence as it relates to the first defense.

 The suggestion that the attitude of mind of counsel and the judgment of the courts may have been affected thereby as the interests of the litigating parties in the Third Circuit were substantially merged, does not impress me as being worthy of further consideration, in view of the length and expense of the litigation in the Third Circuit, which finally reached the Supreme Court, the high character of counsel engaged, the fact that Mr. Armstrong individually was represented, and the learning and experience of the judges.

 I believe that De Forest throughout the whole litigation on the patents in suit has honestly endeavored to sustain his claim to be the first inventor of the inventions of the patents in suit, and has been assisted by witnesses, likewise moved by an honest desire to see justice done, and not acting pursuant to a well-conceived plan to deprive Mr. Armstrong of anything which rightfully belonged to him.

 The inventions of both patents in suit relate to audio and radio frequency. If this was not so and the invention therein disputed had been some radio application of the oscillating audion, why was the issue framed in the Patent Office in the interference proceeding broadly, an electrical invention for the generation of alternating currents, irrespective of the frequency of the currents generated, and why did Armstrong, if he did not believe that was his invention, or believed that it was unpatentable, continue the contest?

 At the outset of the consideraton of defendant's contention, it seems to me that there is nothing new in the testimony of the defendant's expert Farrand, which would change the opinion of the Supreme Court, as the same type of testimony, advancing the same opinion, was given by John V. L. Hogan in the Philadelphia case, and by Edward H. Loftin, in the Delaware case, and was before the Supreme Court, and it is the substance of the testimony and not the individuality of the witness with which, in this instance, we are concerned.

 The contention of the defendant that the Van Etten and De Forest laboratory notebook entries of August, 1912, disclose only audible frequency "singing," and do not disclose or suggest the invention here in controversy, seems to me to be the same contention advanced in the Third Circuit, and which was before the ...


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