The Thomas A. Edison Papers Digital Edition

Transcription

Mr. Eaton’s Mem. Of Business For Patent Litigation Committee 
January 13th, 1892. CONFIDENTIAL
PATENT LITIGATION COMMITTEE
MR. EATON'S MEM. FOR MEETING, JANUARY 13th, 1892
I
FILAMENT CASE. Unexpected delay in bringing this case to final hearing by the new Judge being not yet confirmed, by Mr. Seward's proposed short absence abroad, and by Mr. Lowrey's continued illness which still entirely incapacitates him for work. I shall be prepared to make an oral statement of the situation, and ask for further instructions.
Postpone the hearing until both Mr. Seward + Mr. Lowrey can be present, if within a reasonable time.
II
OUR SUIT ON THE FLAT SEAL FOR LAMPS vs. THOMSON-HOUSTON CO. AT YONKERS. Mr. Fish, the General Counsel of the Thomson-Houston Company, tells me that his Company, in its recent attempts to perfect its incandescent lamp, made a few lamps, and only a few, under this invention of ours, to see how it would work; but that in view of our suing them, they have been temporarily stopped using the flat seal, and will decide promptly, as soon as Professor Thomson recovers from present illness, whether they will permanently stop, or stand suit.
III
TRENTON FEEDER CASE. The defendants in this case recently obtained an order from the Court giving them permission to open the case and take some further testimony. Under this permission they have endeavored to introduce all sorts of evidence to prove that the defendant did not infringe our Feeder patent at Trenton. On December 18th, the testimony of a foreman on outside line construction in 1886 was taken; as well as the deposition of Mr. Young, the son of Professor Young, at Princeton, who was superintendent of the Station at Trenton. Mr. Betts cross-examination broke the force of both depositions, and turned the evidence decidedly in our favor, in the case of both these witnesses. Since then we have introduced our proofs to refute plaintiffs depositions, and our case is now stronger than ever. Re-opening the case has in fact helped us.
IV
OUR SUITS AGAINST MAKERS OF SOCKETS. Mr. Fish, General Counsel of the Thomson-Houston Co., tells me that the small concerns whom we are suing on our socket patents, have appealed to the Thomson-Houston Co. to help them defend the cases and break down our patents. The same appeal has been made to the Westinghouse Company. One small manufacturer, Paiste of Philadelphia, has gone out of the socket business, in consequence of our suing him. The suit we are especially pressing is against the Electric Engineering and Supply Company, Syracuse. They have just filed their answer wherein they set up 232 patents and other printed references, to anticipate our patents.
These small manufacturers make Thomson-Houston sockets and Westinghouse Sockets as well as Edison sockets, and cut prices on all. The Westinghouse and Thomson-Houston Companies, both of whom own socket patents, would like to unite with us in bringing combination suits to shut up these small manufacturers who are at present ruining the business by cutting prices.
It will take us some time to go through the above mentioned 232 anticipation set up by the Syracuse Company. Assuming for the moment that on doing so, we become convinced that our patents are not strong, would you favor any arrangement with the Thomson-Houston Co. and the Westinghouse Co. for combination action against all outside makers, thus leaving the socket field to those two companies and ourselves? Mr. Fish, of the Thomson-Houston Company, tells me that unless we consent to this arrangement, his Company, must, in self defense, help the Syracuse Company to break down our patents. Presumably the Westinghouse Company feel the same way.
QUESTION. Would you, under any circumstances favor an arrangement between the Edison Company, the Westinghouse Co. and the Thomson-Houston Co., to drive out all other makers of sockets, with the understanding that neither of these three companies shall enforce its own patents as against the other two?
Law over with General Counsel has examined the patents set up in defense, and reports how seriously they affect our patent.
ADAMS CO. vs. LINDELL CO. This electric railway suit pending at St. Louis, wherein we take charge of the defense, is being vigorously pushed by plaintiff. It appears that the Adams Co. has raised money enough to pay the expense of this litigation, to find out whether this patent, their sole asset, is of value. They have recently taken testimony for two weeks at St. Louis, Mr. S.R. Betts and our Mr. Vansize having been present in our behalf. The Adams Co. principal expert was Professor Nipher, a leading St. Louis scientist. They also used Mr. J.W. See, of Cincinnati, as an expert. We had intended to use as our expert, only Mr. Vansize, but the high standing of Professor Nipher, who put a broad and dangerous construction on the patent, makes it necessary for us to use some scientific expert well known to the St. Louis courts, besides Mr. Vansize, thus reinforcing Mr. Vansize by an expert of local celebrity. Indeed, we may need two additional experts. 
QUESTION. Shall we retain one or two additional experts in tis case, if need be? VI
THE PERKINS SWITCH SUIT AGAINST US.. After letting this case sleep for a long time, the solicitor for the Perkins Co., Mr. Buckingham, has this week served upon us notice of taking testimony for the complaint. As you had not yet appointed any particular counsel to take charge of this case, and as Mr. Buckingham declined to extend the time to open his testimony, I was obliged to engage Counsel without specific instructions from the Committee. Our whole force of lawyers is now so busy with our cases, that I found it difficult to secure on such short notice, the proper lawyer to take charge of this case, but finally arranged with Mr. Betts for him to act as Counsel.
We infringe this patent, and shall have hard work to break it down. If the patent, and shall have hard work to break it down. If the patent is sustained, we may be liable for profits on switches for many years passed.
QUESTION. Do you approve of my selecting Mr. Betts?
VII
THE THREE THOMSON-HOUSTON SUITS AGAINST NEVERSINK COMPANY. In January 1891, three suits were commenced by the Thomson-Houston Company against the Neversink Mountain Railroad Company of Reading, Pennsylvania, a customer of the General Co. The pleadings in these suits were duly filed, but the complaints asked several extensions of time to take testimony. Finally, on December 21st last notice was given by the complainants to take testimony at Philadelphia. Mr. Seely of Dyer & Seely attended in our behalf on the taking of the above testimony, upon the understanding that he was to retire from the conduct of the same, if desired by the Committee. This suit is brought by the Thomson-Houston Company on several of the Hunter patents, covering a variety of details of the Railway System. Mr. Seely is one of our Counsel in the East Reading suit, which is also brought by the Thomson Houston Company on the Hunter patents. Recently we have associated Mr. F.H. Betts with Mr. Seely in the East Reading Suit, and much has been done towards impeaching the Hunter patents. It is desirable to continue Mr. Seely, and possibly also to use Mr. Betts in the three Neversink Suits.
QUESTION. Shall Mr. Seely continue in the three Neversink Suits, and shall we also engage Mr. Betts as additional Counsel, if necessary?
VIII
THE CARBON TREATMENT CASE AGAINST US. The argument in this case took place before Judge Acheson, Philadelphia, in the second week of December, and lasted three days. Mr. Christy spoke for the patent and Mr. Betts for us in defense. The case was well argued on both sides. While the chances are against us, there are some good reasons why we ought to win. X.
SHALL WE SUE THE BEACON VACUUM PUMP & ELECTRIC COMPANY. About two years ago, a mechanical pump for exhausting incandescent lamps was brought out in Boston with such publicity. This pump was offered for sale or license to the Edison Lamp Company, but upon investigation, was the Beacon Vacuum Pump & Electric Company, to make incandescent lamps. Circulars have been issued, and trade sought for all over the country. From what I can learn, they are gradually gaining strength as competitors in the sale of lamps.
QUESTION. Shall a suit be brought against the Beacon Vacuum Pump & Electric Company on the Filament patent?
Bring  action on the Filament Patent and then report to Committee for father instruction.
XI
PROFESSOR BARKER'S RETAINER. The annual retainer to Professor Barker for 1891 has expired. It was $500 with a per diem charge of $50 for all time spent in expert business and examination of authorities, and of $75 for all time spent in consultation and testimony. As we shall probably need Professor Barker's services in the Field suit, and possibly in other suits. I recommend the renewal of this retainer at present price.
QUESTION. Shall Professor Barker's retainer be renewed for 1892? XII
PATENT OFFICE INTERFERENCE ON PAPER CARBON. An Interference between Edison and Maxim and Swan has been pending in the Patent Office for several years on the application of Mr. Edison for a patent for a Paper Carbon, filed May 27th, 1881. In November, 1890, the Examiner of Interferences adjudged priority to Mr. Swan. An appeal was taken to the Board of Examiners in Chief, and was argued last month. Mr. Dyer and Mr. Driscoll represented Mr. Edison. We have just received notice from the Patent Office that the decision of the Examiner of Interferences has been reversed, and priority awarded to Edison. Although the Paper Carbon is not now commercially used, this interference has been fought through in order to strengthen our patent situation. Probably an appeal will now be taken to the Commissioner.
XIII
FILAMENT PATENT SUIT IN CANADA. Our Canadian friends are complaining of our delay in not pressing our old suit on the Filament patent on Canada. We at first waited until we got a decision here and are now waiting for the appeal to be decided. In view of the English decisions, our position will be strong in a Canadian Court.
QUESTION. Shall we now take preliminary steps to revive the Canadian suit, or let it rest until our appeal here is decided?
The preliminary septs to the extent of consulting with Mr. Oster and to getting into shape to press the suit in Canada after the Filament case indecided here
XIV.
IMPORTANT EDISON PATENT GRANTED AND SUIT BEGUN. On December 8th 1891, the Patent Office granted Mr. Edison a patent, No. 464,822, on his application filed June 28, 1882,for tension reducors in multiple arc. Broadly considered, this covers all convertor systems now in use. Mr. Edison was the first inventor, and the only doubtful question is whether in view of the changes in details which the practical development of convertors has brought about the broad features of his patent are controlling. We believe they are.
At your last meeting you authorized me to bring further suits against the Mount Morris Company, ad we have taken steps to sue them on this patent. It is a case which we cannot well attend to until the pending appeal on the Filament Case, and the Feeder Case and perhaps the Three Wire Case, are all out of the way but it takes so long to get a patent suit well started, I thought best to begin this suit at once. 
QUESTION. Is my action approved in commencing this suit, and shall it be delayed until we can conveniently attend to it?
OUR ACCOUNTING IN THE FILAMENT SUIT. This proceeding is progressing satisfactorily before Commissioner Shields Mr. Griffin having it particularly in charge for us. Genera Duncan and Mr. Curtis represent the United States Co. The defendant has prepared a statement, covering several hundred sheets, of all lamps made and sold from the time they started in business ten years until now. These sheets, which is how the names of the customers, the dates and details of each sale, and the price received, have not yet been fully footed up, so I cannot yet say what the total sales amount to. The defendant is now engaged in giving us details of cost of these lamps. Mr. Upton helps us in this examination. Considering the enormous amount of work imposed on the defendant good progress is made.
XVI.
OUR SUIT ON EDISON THREE WIREPATENT vs. THOMSON-HOUSTON NEW HAVEN CO. In order to prevent the defendants lawyer, Mr. Buckingham, from wasting time, we procured an order from Judge Shipman from September 1st. The defendant in fairly good faith, diligently consumed these three months, and was then given another month, until January 1st. That not being enough, the defendant applied to Judge Shipman on December 29th, for a further extension of six months. We opposed the application. After hearing both sides, the Court extended defendants time for two months instead of six, until March 1st, said time to be divided as follows. Ten days to defendant to close Professor Morton's direct examination, with seven days for us to cross-examine; ten days for us to cross-examine; and seven days for both the direct and cross-examination of defendants witnesses to facts. This gives the defendant twenty-seven and the complaint fourteen days of the extended time.
Judge Shipman lectured Mr. Buckingham for his prolonged cross-examination of our witnesses, which we insisted was done merely to consume time. We argued that as a defendant is now using our invention, it could better afford to pay a lawyer to spin out the taking of testimony even for years, than to have the case decided and the patent sustained.
Judge Shipman further said that we could place the case for the April Calendar, whether the proofs were then closed or not, and without the right on defendants part to move it off, and that the Court would be open to hear the case at any time up to and including the month of September, except the month of August.
Mr. Buckingham has proven that as early as 1880 the Western Union used two dynamos in series and grounded the connecting link between the adjacent poles, also grounded the further end of the outgoing circuits, using the earth for a compensating conductor. Our Three-Wire patent shows and describes as one method, a similar grounding and a possibly analogous use of the earth as a compensating conductor. Our New York City Company now grounds the neutral, and defendant is trying to show that both on account of economy and operating efficiency, our Three-Wire System, on a large scale, absolutely requires the use of the earth as a reinforcement to the third wire. Consequently, they say, our Three-Wire patent, thus used, shows no invention over what was done by the Western Union in 1880; also in plants where we do not use the earth, the substitution of a metallic conductor for the earth, constitutes no new invention. 
In our Feeder Suit, the defendants have shown that gas feeders are old, and they claim that the use of electric feeders does not constitute a new invention. In that suit we are meeting this defense by explaining the broad and vital distinction between the several distribution system of water and gas on the one hand and of electricity on the other. We shall handle is the New HAven Three-Wire Case in a similar way, and as yet have no reason to doubt that we shall succeed.
XVII
PRESENT STATUS OF ELECTRIC RAILWAY SUITS AGAINST US. Three important patent suits are now being vigorously pressed against us, to sit, on the Field patent, the Adams patent, and Hunter's patents. Another suit is likely to be brought on the Green patent, against us or some other infringer. I submit the following review of the situation, and recommend that we try to control the Green patent.
The Field patent is for the combination of a dynamo machine [which Mr. Pope, the Field expert, says means the modern dynamo machine and not the old Magneto machine], a railway track with conductors parallel to the track, a car taking the current from the conductors, a motor mounted on the car, and a circuit controller on the car. The Patent Office granted the patent because it contained what appeared to be the new element of a circuit controller on the car. All of these elements appear in Clark's old English patent of 1864, but in that patent the source of energy was a Magneto machine.
The Siemens road of Berlin anticipates the date of Field's application, but Field will try to prove back to the date of his caveat filed in May 1879. The Siemens road had all the elements which the Field experts now claim for the Field's caveat was filed prior to the publication of the Siemens road.
Green of Kalamazoo goes back to 1875. What he then did embraced all the elements now claimed by Field, except that he, Green, used a primary battery instead of a dynamo as the source of energy. If there is no novelty in substituting a dynamo for a primary battery, and we counted there is none, Green is a good anticipation as regards Field. Green applied for a patent in August 1879. Field applied in March 1880. But Field's caveat was filed prior to Green's application, though four years after Green's road was built and run. Green's road was described in a Kalamazoo paper in October 1875, and he continued his experiments until he filed his application.
Edison, whose first work goes back to the date of Field's caveat, was the first in this country to use a dynamo in an electric railway plant. That was in the Spring of 1880. Edison was also the first to build a full sized road, adapted for commercial use, thereby in that regard, surpassing what others did, except possibly the Siemens road at the Berlin Exposition in 1879.
The Adams patent is construed so broadly by his experts as to cover any motor driven car on which an electric motor is flexibly supported on a frame independent of the car body, whether gears are used or not. 
Hunter claims the trolley, and it will be difficult, if not impossible, for us to operate a road with aerial conductors, if the Thomson-Houston Co. owning Hunters patents, wins the East Reading Suit which we are defending, unless we have their consent.
The suits on the Field, Adams and Hunter patents, respectively are being energetically pressed against us . Presumably no terms can be made with any of these plaintiffs, even if we wished to make terms, until after judgement. We believe that we can break down all of these three patents, but it requires hard work and expense, for all that money and skill can do is being done to sustain them. Still we expect to prevail in all three of these suits.
The Green patent which has just been issued, after rending ten years, and which runs 17 yeas from now, is the only broad patent on which we have not been sued. We have just taken Green's testimony at Kalamazoo, as one or our witnesses in the Field case, and have found out all about his dates of invention and the possible strength of his position as an early inventor. I believe it would be well to get control of this patent, if on reasonable terms. Control would save us the expense of litigation, for then somebody else would be sued, and would also give us something to deal with Field on if the Field patent is sustained. Moreover, it would help  our prestige to be plaintiff instead of defendant, in a suit on a fundamental railway patent like Green's. With Mr. Insull's approval, I have just sent Mr. John S. Wise, who knows the resent owner of the Green patent to find out whether some arrangement can be made for us to litigate the patent at our expense, with an agreement for a license in case is sustained.
QUESTION. Would you favor a reasonable arrangement to control the Green patent?
Yes
Respectfully submitted,
S.B. Eaton,
General Counsel.