Case Name: TECHNITROL, INC. v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1971-04-16
Citations: 194 Ct. Cl. 596
Docket Number: No. 99-64
Parties: TECHNITROL, INC. v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Laramore, Dureee, Davis, Collins, Skelton, and Nichols, Judges.
Reporter: United States Court of Claims Reports
Volume: 194
Pages: 596–656

Head Matter:
440 F. 2d 1362
TECHNITROL, INC. v. THE UNITED STATES
[No. 99-64.
Decided April 16, 1971]
S. G. Yuter, attorney of record, for plaintiff. Lawrence B. Dodds, Paul Fields, and James David Jacobs, of counsel.
James D. Stokes, -with, whom was Assistant Attorney General William D. Buckelshaus, for defendant.
Before Cowen, Chief Judge, Laramore, Dureee, Davis, Collins, Skelton, and Nichols, Judges.

Opinion:
Davis, Judge,
delivered the opinion of the court:
This is a patent suit under 28 U.'S.C. § 1498 in which plaintiff seeks "reasonable and entire compensation" for alleged unauthorized manufacture for and use by the Federal Government of inventions described and claimed in TJ.S. Patent No. 2,611,813, entitled "Magnetic Data Storage System", issued to joint inventors T. K. Sharpless and E. S. Eichert, Jr. in 1952. Plaintiff Technitrol, Inc. is the record owner of this patent — the Sharpless patent. Plaintiff's peti tion charges infringement of claims 1-4, 6-14, and 16-24.
Believing that it is free to use the patented invention, defendant moved to dismiss or, in the alternative for partial summary judgment, on the ground that the United States is licensed under the Sharpless patent. Plaintiff then counter-moved for partial summary judgment that the United States is not so licensed, or for an order specifying the facts not in controversy on that issue. Without resolving the question, the court remanded the case to the trial commissioner with instructions to find the facts relevant to this license issue. The case is now before us on the commissioner's report on that question.
For the reasons which follow we hold that the defendant is fully licensed under claim 16, and is also licensed under all other claims of the Sharpless patent except to the extent that those other claims may be limited to the system's automatic reset feature, explained below. We leave to later proceedings the determination of whether the three representative claims other than 16 (5, 19, 23) embrace the automatic reset feature, and if so whether those claims (and the patent) as so construed are valid. If both questions are answered affirmatively, then the issue of infringement will have to be reached as to those and the remaining claims.
The Sharpless patent
The Sharpless patent, relating to electronic computers, discloses a magnetic data storage system, and has particular application "to systems for storing information, especially where it is desired to transmit, receive, and record information". The specification notes that a particular use of the system is "to store information concerning reservations on public carriers such as airplane lines, railway lines, etc." Generally, the system described in the patent comprises (1) a central storage unit which stores on magnetic disks information such as the number of seats available and reserved on various flights of a commercial airline; (2) remote operating stations, such as airline reservation desks at airports or hotels, where an operator through a suitable keyboard can request information of and send information to the central unit; (3) an arithmetic adding unit, for calculating information to be placed into the central storage unit; and (4) a control unit for sequencing various operations performed by the system. The system is designed to permit an operator at a remote station to find out from the central storage unit whether seats are available on a certain flight, and, if so, to record additional reservations up to the limit of the flight's capacity.
A detailed description of the system is contained in the findings of fact, but the salient technical characteristics may be summarized as follows: The central storage unit consists of a number of magnetic disks (information disks) mounted on a common shaft for rotation by an electric motor. Information, such as the number of seats already reserved and the number of seats available, is stored on the disks in the form of discrete areas of magnetization, called magnetic pulses. The pulses are arranged circumferentially in groups, called registers, around the faces of the disks. Each register contains information about a particular airline flight. Magnetic pickup heads are mounted adjacent to the disks so that, as the disks rotate, the heads, through appropriate circuitry, can "read" pulses on the disks, "write" new pulses on the disks, or "erase" existing pulses.
The remote stations are connected to the central storage unit through electrical transmission lines, akin to ordinary telephone lines. Each remote station has three keyboards, presumably one for each of three airline reservation clerks. By setting appropriate punch, keys, an operator can designate (a) a particular flight on a particular day about which he desires information and (b) the number of seat reservations needed. In essence, the punched keys, through the necessary circuitry and coding, set off electrical pulse signals which are transmitted to the central station. There, the signal is decoded and split. The portion of the signal representing the number of desired seat reservations is sent to an electronic adder. The portion of the signal representing the particular flight actuates circuitry for locating the proper register on the information disks. When that register is located, the information on it, i.e., the number of seats already reserved, is sent to the adder. The adder then sums the "seats desired" and the "seats already reserved". If the total exceeds the number of seats available, an alarm circuit lights up a lamp at the remote station, so indicating. If the sum does not exceed the number of seats available, then the register is erased, the new sum is recorded, and the remote station is so advised, indicating that the reservation has been accepted. The system is then ready for another sequence of operations on demand from a remote station. The entire process takes about 0.14 seconds.
The system is designed so that, through its scanning and selector equipment, only one keyboard of any remote station can communicate with the central station at a time. This feature avoids the possibility of simultaneous duplicate requests being made to a register from more than one keyboard, and thus prevents a particular flight from oversubscription.
A particular aspect of the Sharpless system, as alleged by plaintiff, is the automatic or memory reset feature by which position volatility is avoided. On the common shaft with the information disks is a master or clock disk which has recorded circumferentially about its face two channels of magnetic pulses, one channel has 160 evenly-spaced pulses, the other has one pulse. The purpose of the clock disk, as its name implies, is to serve as a timing device to coordinate the timed-position of the information disks with other elements and circuits of the computer system. A pickup head is located oyer each channel. One head produces 160 evenly-timed pulses per revolution of the clock disk, the other one pulse per revolution. The 160-pulse head is connected to a scale-of-ten electronic counter which produces one output signal for each 10 input pulses. The counter therefore generates 16 pulses (160/10) 'for each revolution of the clock disk, and it thereby divides the information disks into 16 10-pulse registers, or information segments. Pulses from the scale-often counter are applied through electronic circuitry to a digital counter which in turn produces 16 unique voltage combinations, each thus representative of one register on an information disk. When one of the voltage combinations matches up, or coincides, with a similar combination from a remote station (generated by an operator seeking information about a particular flight or register), circuitry is activated by which the register is "read".
It is essential that the clock disk and the scale-of-ten counter stay in synchronization. Otherwise, the counter will not produce signals representative of each register, or, to put it another and more technical way, the system would be position volatile. During normal operation, with power on and the equipment 'functioning properly, the clock disk and counter will stay synchronized. 'However, at start-up, either initially or after a power failure, the clock disk and counter may lose synchronization. For example, the clock disk may continue to rotate momentarily, through inertia, after electric power to the counter and the motor have ceased. Also, when power is cut off, the counter, a purely electronic device, loses count; and on re-start, its counts may not be synchronized with the start of a register on an information disk, so that such counts would be arbitrary with respect to register positions. Plaintiff asserts that this problem of potential loss of synchronization, or position volatility, is solved by the one pulse per revolution channel of the clock disk, which, it contends, is disclosed in the patent as connected through appropriate circuitry to reset the counters to zero after each revolution of the clock disk, thereby synchronizing the clock disk and counter if they are out of synchronization.
The 24 patent claims are combination claims which define the invention in terms of the elements making up the system. In general, they describe the magnetic memory central storage device, the remote stations, and associated circuitry by which the system is made operable. Claim 16 differs from the other claims in that it does not recite the remote stations and is directed primarily to details of the central station.
The Government's computer contracts with the University of Pennsylvania (ENIAO and EDVAO)
Defendant contends that it is licensed under the Sharpless patent because the invention claimed was developed in the course of government-sponsored research at the Moore School of Electrical Engineering of the University of Pennsylvania.
Mr. T. K. Sharpless graduated from the Moore School with a bachelor's degree in electrical engineering, and was thereafter hired by the Research Division of the Moore School in February 1943 as a full-time, non-academic, professional engineer to work on outside contracts negotiated with the School, which consisted preponderantly of those with the United States. In the early 1940's, the Army was interested in developing an electronic computer with a broad capability of solving mathematical problems relating to ballistic studies. Analog computers used for this purpose had proven unsatisfactory. So, after consultation with the Moore School, the Army in 1943 decided to underwrite the creation of the world's first general purpose electronic digital data processor or computer. At that time, digital computer technology was a virgin and unexplored universe charted only by untested theories unaccompanied by much practical experience. The research and development contract which the United States made with the University of Pennsylvania therefore called broadly for the Moore School "to engage in research and experimental work in connection with the development of an electronic numerical integrator and computer", later to become known (from its initial letters) as the ENIAC. The Government specified the capabilities it desired in the completed machine — what the ENIAC was supposed to be able to do — but it did not otherwise limit the scope or direct tbe path of the research to be conducted. In particular, the United States did not suggest a mode of operation, the speed of calculation, or the type of circuitry to be used; indeed, the Government was not in a position to furnish guidance in any of these areas. The ENIAC contract, in short, represented a first broad-scale foray into the digital computer field, and no one knew for certain, what would be encountered. 'Sharpless was a key research engineer on the ENIAC project and played an important role in the overall planning of the contract performance. The ENIAC program ultimately produced a patented machine to which the Government received a non-exclusive license under the contract.
After starting work on the ENIAC, the Kesearch Division of the Moore School came to believe that a new machine, using techniques of operation and circuitry different from those contemplated for the ENIAC, could be built which would better perform the tasks desired by the Army. In October 1944, the scope of the ENIAC contract was broadened to include "research and experimental work in connection with the development of an Electronic Discrete Variable Calculator", or ED VAC (following the initial letters of the name). Work on the EDVAC was performed concurrently with that on the ENIAC until the completion of the ENIAC contract. In April 1946 the Army entered into a second contract with the University of Pennsylvania; this one called for full-scale research and development of an EDVAC.
Sharpless, who had previously worked on the EDVAC under the ENIAC contract, became technical director of the EDVAC project. He remained on the Moore School's payroll through October 15, 1947. Eickert, the co-inventor of the Sharpless patent, worked at the Moore School from September 1945 to April 1947, but did not participate in either the ENIAC or EDVAC projects.
Technitrol, Inc.
In April 1947, Sharpless Eichert, and two other persons, incorporated plaintiff Technitrol, Inc. to exploit the technology of high speed computers in the military and industrial fields. Although still employed by the Moore School in the summer and fall of 1947, Sharpless worked for Tech-nitrol on occasional evenings and during the two-week summer recess at the School.
Beginning in the summer of 1947, Technitrol negotiated an agreement with, and developed a computerized airlines reservations system (called "Reservisor") for, American Air lines. Sbarpless did some work on the Eeservisor system during August 1947, and devoted his efforts to it after joining Technitrol full-time in October 1947. Eichert, who had left the Moore School to join Technitrol in April 1947, aided Sharpless occasionally on the project during that summer, and worked with him full-time from December 1947. On May 26, 1948 a patent application, which matured into the patent in suit, was filed, naming Sharpless and Eichert as joint inventors.
The basis of the Ueense defense
Defendant's license defense is bottomed on the "Patent Eights" article of the EDVAC contract in which the University agreed to grant to the Government:
an irrevocable, nonexclusive, nontransferable and royalty-free license to practice, and cause to be practiced for the Government, throughout the world, each Subject Invention in the manufacture, use and disposition according to law of any article or material, and the use of any method .
"Subject invention" was defined as
each invention, improvement and discovery (whether or not patentable) conceived or first actually reduced to practice (i) in the performance of this contract , or (ii) in the performance of any research and development work relating to the subject matter hereof which was done upon the understanding that this contract or any subcontract hereunder would be awarded .
Both Sharpless and Eichert knew or should have known of this patent license clause, as well as the comparable article in the ENIAC contract, and agreed, actually or in effect, to conform to their requirements. Plaintiff is, of course, likewise bound.
'Since the defendant does not urge that the invention, improvement or discovery embodied in the Sharpless patent was actually reduced to practice in the course of performance of the EDVAC contract, our problem is to decide, first, what was the date of initial conception, and, second, whether that conception occurred "in the performance of" the EDVAC agreement or "in the performance of any research and development work relating to the subject matter hereof [i.e. the EDVAC contract] which was done upon the understanding that [the EDVAC] contract would be awarded."
The parties and the trial commissioner have attacked these questions by first seeking to define the full scope of the patent claims, particularly with respect to the position volatility feature. We have decided, however, not to take that route and, instead, to advance toward the solution of the license problem without, at this time, determining the exact reach of the patent claims. We choose to avoid, for the present, this troublesome issue because our tentative appraisal suggests that, in this instance, the question of patent scope cannot well be resolved without inquiring simultaneously into patent validity — and the issue of validity has not yet been tried out in this litigation. The controversy over patent scope turns mainly on whether the claims (except for claim 16) disclose the automatic or memory reset feature counteracting position volatility. This aspect is not expressly recited in any of the claims, but the trial commissioner found, and plaintiff agrees, that under 35 U.S.C. § 112 the "means" clauses of the claims incorporate this feature. Defendant disagrees very strongly and contends, also, that the specifications and drawings do not support the claims as construed in this way. The parties battle strenuously over these issues, and the artillery from both sides is heavy. As we see it now, this conflict should not be resolved apart from, or prior to, a consideration of the validity of the claims if so read. Since it is the patent claims which determine the legally protected subject matter of a patent (Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 419 (1908); White v. Dunbar, 119 U.S. 47, 51-52 (1886)), in construing the claims (with respect to the automatic reset feature) in order to define the invention for license purposes we would be in large part predetermining the patent's validity. Any construction of the claims which we adopted now would govern in subsequent proceedings on validity and infringement (see Dominion Magnesium Ltd. v. United States, 162 Ct. Cl. 240, 320 F. 2d 388 (1963)), and that reading would be measured against the requirements for patentability: novelty, utility, and non-obviousness. See 35 U.S.C. § 101-103 (1964). In determining validity, as the Dominion case and many others illustrate, courts must frequently choose between a narrow construction of the claims that upholds the patent and a broad construction that strikes it down. We do not wish to make that choice at this stage, believing that it would be both unwise for the court and unfair to the parties to affix a meaning to the claims in the absence of further proceedings, including the making of a record, on validity.
Moreover, it is unnecessary to delimit fully the scope of the patent claims in order to move toward resolution of the license issue. The contractual provision does not tie the Government's license to the patent laws; any invention, improvement or discovery conceived in the course of performance of the EDYAC contract, whether or not patentable, is licensed to the Government. We may therefore begin to determine the scope of the license by comparing the substantive elements of the 'Sharpless system with the work done under the ENIAC and EDYAC contracts. As our discussion will show, we can block out much of the answer to the license problem even though we do not, and cannot, decide it entirely at this time.
Conception durmg the period of the ENIAC contract
In deciding whether the Government has a license, one basic question is when was the Sharpless invention (or inven tions) conceived. Conception is a pivotal if somewhat nebulous notion in patent law, which is defined (1 Walker, Patents §45 (Deller's 2d ed.) at 191-92) as " the formation in the mind of the inventor of a definite idea of a complete and operative invention as it is thereafter to be reduced to practice . The date of conception is the date when the inventive idea is crystallized in all of its essential attributes and becomes so clearly defined in the mind of the inventor as to be capable of being converted to reality and reduced to practice by the inventor or by one skilled in the art." In this instance there is no real difficulty with the timing of "conception". The record makes it plain, in our view, when the various components of the Sharpless invention or inventions (however broadly or narrowly defined) first became crystallized.
It is clear to us that the elements of the Sharpless system, except for the automatic reset feature (dealing with position volatility), were all conceived prior to Sharpless' cessation of employment with the Moore School (October 15, 1947) and during the performance of the EDVAC contract. First, the defendant introduced a set of documentary exhibits made up of sketches and written material prepared by Sharpless in the first half of August 1947. Defendant's expert witness testified, without substantial contradiction by plaintiff, that the drawings collectively disclosed an information storage system with sufficient clarity to have enabled its reduction to practice by a person skilled in the art existing in August 1947, without the need for exercise of any new or unobvious faculties, techniques and means. The witness also said that every element and combination contained in the Sharpless patent was revealed in the drawings. This evidence shows that, except for the automatic reset facet, the Sharpless system was crystallized by the end of August 1947.
These drawings are themselves sufficient to establish conception by Sharpless before August 15, 1947, but there is more. The disclosures in these drawings are confirmed by a set of drawings made by Sharpless in the first two days of October 1947 while still on the Moore School payroll (see footnote 7, supra). These later drawings reveal further specific details of the keyboard and scanning devices shown in the earlier drawings, and are fully consistent with them and with the defendant's expert's testimony as to what the August drawings taught one skilled in the art.
In addition to this convincing documentary material, there are significant admissions by plaintiff which date conception of the invention before 'Sharpless left the university. These prior statements cannot be discounted on the ground that their substance has not been otherwise proved; all that is necessary to constitute an admission is a previous statement by an adversary party which is inconsistent with the position he is taking in litigation. Employers Mutual Casualty Co. of Des Moines v. Mosqueda, 317 F. 2d 609, 612 (C.A. 5, 1963); Cox v. Esso Shipping Co., 247 F. 2d 629, 632 (C.A. 5, 1957). The trier of fact can rightly take account of such admissions, although they are not, of course, conclusive if there is opposing evidence. La Flare v. Chase, 8 App. D.C. 83 (1896).
The first set of admissions occurred in a patent office interference proceeding between the Sharpless patent application and one filed by another. An interference is a procedure initiated by the Commissioner of Patents which seeks to determine the priority of invention between two applicants who are claiming the same invention, or between an applicant and a patentee. 35 U.S.C. § 135 (1964). The Sharpless application was the later filed, so Sharpless was designated the "junior party" and was required to file a "Preliminary Statement," a sworn document substantiating its claim to priority. See Patent Office Pules of Practice 201, 215, 216, 37 C.F.R. §1.201, 1.215, 1.216 (1970). Sharpless and Eichert swore in this statement: (1) that the first drawing of the invention defined by the count in interference was made during August 1947; (2) the invention was first disclosed to others during July 1947; and (3) the active exercise of reasonable diligence towards reducing the invention to practice began during July 1947.
The interference was later amended by adding several new counts, including one which eventually issued as Claim 16 of the Sharpless patent. Sharpless' attorneys filed a so-called Eule 233(e) statement (as amended, 37 C.F.R. § 1.231(f) (1970)) which said that the dates originally sworn to in the preliminary statement would govern the new claims. The Eule 233 (e) statement therefore reaffirmed the dates earlier sworn to and is equivalent to a new sworn statement.
These interference proceeding admissions, made fourteen years before the filing of the petition in the present action, are strong evidence of the time of conception. Their weight is buttressed by the failure of both Sharpless and Eichert to repudiate them in their testimony in this case. And they are not the only admissions in the record. In the course of an infringement proceeding in a federal district court between Technitrol Engineering Co., Inc. and the Sperry-Eand Corporation, those parties agreed to exchange formal statements as to the dates of conception on which they would rely. Eichert, in his capacity as President of Technitrol, said:
As presently advised, the earliest dates of conception of the inventions which are the subject of the Sharpless, et al. patent No. 2,611,813 upon which the plaintiff will rely at the trial of this action is during the period from June 25, 1947 to July 6,19If. (Emphasis added.)
Sharpless was, of course, still working on the EDVAC contract for the Moore School during that period.
Taken together, these drawings and admissions are ample to establish that every element of Sharpless' "Magnetic Data Storage System", except the automatic reset feature, was conceived before Sharpless left his employment at the Moore School. There are also other, lesser, indications in the record supporting this conclusion, and there is very little to the contrary. Plaintiff's argument for a later conception date rests mainly on its claim that the automatic reset feature is central and necessary to the invention (a position which, as we have noted, the defendant strongly disputes). And it is quite true tliat the record just as clearly discloses that the automatic reset feature (the solution to position volatility) was not conceived until 1948 after both Sharpless and Eichert and left Moore and the University of Pennsylvania. This is established by a drawing by Sharpless showing the Eeservisor system (developed by Technitrol for the air carrier) as envisioned on January 1,1948. The central storage system consisted of, among other things, information disks and a clock riislr mounted on a common shaft. However, the clock disk did not have the one pulse per revolution channel by which the memory could be reset to avoid position volatility. Recognizing the problem, Eichert, sometime after January 1,1948, suggested modifying the clock disk with the single pulse channel.
"In the performance of this contract" for federal license purposes.
We now come to consider whether the components of the Sharpless conception — again, excluding the automatic reset feature — may still fail to have been conceived "in the performance of" the ED VAC contract, although temporally developed before Sharpless separated from the Moore School. It is possible, of course, for an invention to lie outside the performance of the government contract, even though crystallized during the period of that project, because its subject matter is distinct from the government work. We have stated, in large part, the principles which govern construction of government license clauses, depending on conception "in the performance of [the] contract," in Mine Safety Appliances Company v. United States, supra, 176 Ct. Cl. 777, 364 F. 2d 385 (1966). The inventors in that case were employed by a university in a government-sponsored aviation medicine program designed to study the effects of acceleration on the human body. The subject matter of the patent was an energy-absorbing crash helmet, which, it was claimed, was beyond the scope of the government contract. In rejecting that position, the court said that the license provision was operative whenever the "private" invention bore a "close connection" or a "close and umbilical connection" to the government-underwritten research. 176 Ct. Cl. at 783, 787, 364 F. 2d at 389, 391. Furthermore, the court declined to restrict the license clause to circumstances where every component of the invention had been discovered in the course of contract performance. The Government would be licensed (176 Ct. Cl. at 787-88, 364 F. 2d at 391), "[a]t least in those instances in which the invention was conceived or practiced during the existence of the contract, [where] an important factor in the invention was itself within the contractual scope, or resulted directly from the course of contract performance."
What Mine Safety teaches is that the issue of license vel non should be approached liberally by asking what the United States (acting for its taxpayers) can fairly be said to have purchased through its sponsorship of the contract project. The Federal Government has the right to use, royalty-free, those ideas, improvements, discoveries, and inventions — crystallized during performance of the federal contract — which have a "close and umbilical relationship" to the work and research funded by the United States. Having borne the expense of that effort, the public is entitled to enjoy the fruits without further charge. Accordingly, as we said in Mine Safety, "[i]t is fitting to read the license-grant of Section 17 [which is the same as the license clause of the EDVAC contract] liberally and not to confine it severely within a narrow compass." 176 Ct. Cl. at 789, 364 F. 2d at 392.
The scope of the EDVAO contract
The original ENIAC contract was for pioneer research in the digital computer field. The ENIAC machine which was ultimately developed incorporated a great number of vacuum tubes, including a small capacity internal vacuum tube memory, and could be programmed in a variety of ways through manual switches and plugboards to perform a number of different functions. The ENIAC's capabilities were limited, however, by its clumsy programming techniques, and even before the ENIAC machine was completed the Eesearch Division of the Moore School began considering design modi fications, including the use of magnetic disks and drums for the internal storage of information. These improvements formed the basis of the EDVAC, a second generation general purpose computer. The amendment of the ENIAC contract, previously mentioned, which broadened the scope of work to include experimentation on the EDVAC, also required that a complete work report be delivered to the Government. This report, entitled "Automatic High 'Speed Computing, a Progress Eeport on the EDVAC", was prepared by Eckert and Mauchly, employees of the Moore School and joint inventors of the ENIAC. Dated September 80, 1945, the report disclosed proposed characteristics of the EDVAC, among the most important of which was a high speed, large capacity memory. The report specifically referred to magnetic storage devices, first proposed in 1944, as an area for exploration, although it indicated that an acoustic mercury delay line system looked more promising at the time.
The original, separate EDVAC contract called for "research and development" on a "preliminary model of a small Electronic Discrete Variable Calculator". The small model was to serve to "demonstrate the feasibility" of a full-scale EDVAC having the properties described in the Eckert and Mauchly report. The feasibility model did not exhaust the goals of the contract. Indeed, amendments to the EDVAC grew from a small preliminary model to a versatile full-size machine capable of solving a variety of sophisticated problems, and its growth in complexity was paralleled by the increase in its cost to the Government, from an original contract price of $100,000 to one of $409,700. The EDVAC became the subject of a patent, which disclosed and claimed several different central or internal memory elements including, it should be noted, both acoustic mercury and magnetic disk devices.
The record therefore fully supports the conclusion that a magnetic information storage device — the system used in the Sharpless patent — was well within the scope of the EDVAC contract. Plaintiff contends otherwise, and the trial commis sioner agreed, on the ground that the EDYAC machine actually built employed an acoustic mercury delay line device. But the ENIAC and EDVAC contracts were for research and development and their scope cannot fairly be limited to the features embodied in the machines physically produced. The Government spent nearly $900,000 on the ENIAC and EDYAC contracts; it was paying not merely or even primarily for specific machines but for the advancement of knowledge in computer technology produced by the research. Indeed, the ENIAC machine was obsolete before it was even completed — the knowledge gained in producing it gave engineers at the Moore School the ability, which they recognized, to create a much more useful computer, the EDVAC. There was a continuous line of research running from the ENIAC project through the EDYAC contract, devoted to increasing human understanding, as well as the actual performance, of high speed computers. The particular machines built under the two interrelated programs were not the sole aim of the contracts, nor the only results for which the Government paid. It paid, too, for the exploration of the field and the acquisition of new knowledge, and it is entitled to the crystallized ideas, improvements, and inventions emerging from that process of ongoing study, inquiry, and creation. Scientific research is not a straight and narrow journey, with blinders, along a single path to a known destination. In the process of discovery and invention under a research and development program many roads are uncovered; some are pursued immediately and some must wait for another day. One "product" of the research is the overall accretion in knowledge, and this encompasses the untraveled ways sketched out, as well as the trodden ones. The possible use of a magnetic memory system was revealed by the ENIAO-EDVAC research and was well within the scope of the EDYAC contract.
True, the EDYAC program ultimately produced a model machine based on the acoustic mercury system, rather than the magnetic data storage system preferred by Sharpless. But this specific end-result did not limit or characterize the broad scope the EDYAC project had had from its inception, nor did it mean that the United States abandoned or gave up its claim on the research that had been done on other systems or avenues, or its right to pursue those paths under the EDYAC contract. We have no doubt that if it had been decided by the EDYAC project managers, in July-August 1947, that it would be useful to do further work on a magnetic data storage system (as well as an acoustic mercury system) that such further research would have been within the general scope of the EDYAC agreement as it stood at the time. So also, the Sharpless patent cannot be isolated from the EDVAC on the ground that the former is specifically designed as an inventory control system while the latter is not so limited. The EDYAC was a general purpose computer capable of being programmed to perform many tasks, including inventory control, and that function is hardly remote or unlikely for the Federal Government, which has a unique problem in keeping track of its far-flung property.
The sum of it is that we find the Mine Safety requirement of a "close and umbilical connection" between the government-sponsored research and the "private" invention to have been fully satisfied in this instance: the ENIAC spawned the EDYAC which in turn revealed the concept of a magnetic data storage system in an unbroken chain of descent. All of the Sharpless invention (leaving aside the automatic reset feature) was therefore conceived during and in the perform- anee of the EDVAC contract. We are not saying this is so merely because Sharpless happened to nse some knowledge or idea gained through his work on that project. We are saying, rather, that the discrete "invention, improvement and discovery" which Sharpless conceived before he left the project — his conception of a magnetic storage data system, embodied in the patent in suit — had a very close and integral connection, as a whole, with the government-financed project. His "invention, improvement and discovery" was not separate from, or independent of, the ongoing EDVAC program; on the contrary, it was inseparable from it. Accordingly, we hold that the United States is licensed as to all elements of the Sharpless invention (excluding, for the time being, the automatic reset feature).
The mtomatio reset feature
As shown above, and practically conceded by defendant, the automatic reset phase of the Sharpless patent was conceived after Sharpless left the Moore School. Defendant argues that, nevertheless, it is licensed (assuming arguendo that it forms part of the patented invention at all) because it is, at most, a minor part of the invention, the major portion of which was conceived while the inventor was doing government work. In Mine Safety, sufra, we did not have to decide whether an invention could be licensed — although not conceived or practiced until after the end of the contract's life — because of its close connection with the prior federal program. That problem does arise here, at least potentially, with respect to the automatic reset feature. We now determine that that feature, if it is validly covered by the patent, is not licensed since it was conceived after performance and not "m" the performance of the EDVAC contract. We make this holding on the assumption (which will have to be tested in later proceedings) that the automatic reset feature is a non-obvious improvement or extension of the magnetic data storage system conceived by Sharpless before he separated from the University of Pennsylvania. We think that the terms of tbe license clause before us preclude tbe blanketing of a non-obvious "invention, improvement and discovery" conceived after tbe termination of the inventor's federal connection, even though that separate invention may have a close connection with the preceding government work. The clause, as worded here, does not purport to extend its reach chronologically, by mortmain, into the indefinite future. The unqualified phrase "m the performance" of the federal contract has both temporal and substantive connotations; in the former aspect, it excludes post-contract developments which are new and not. obvious.
Conclusions crnd directions for further froceedmgs
As we have already said, we do not now decide the scope of the Sharpless patent (with respect to the automatic reset feature); that issue should be canvassed and resolved in further proceedings along with the question of patent validity. In the light of that deferral of final decision, our present decision on the license defense is, first, that claim 16, which was found by the trial commissioner and is agreed by the parties to be entirely independent of the automatic reset device, is fully licensed to the Government, and, second, that the other three representative claims (5, 19, 23) are licensed to the Government except to the extent they may be found hereafter to be validly limited to the automatic reset feature. In other words, the only possible area of infringement liability concerns the solution to position volatility, i.e. the automatic reset feature; all other aspects of the Sharpless system and patent are licensed to the Government.
Before any conclusion of infringement is reached, it must be determined in the subsequent proceedings that (1) the patent properly claims the solution to position volatility (the automatic reset feature) ; (2) the patent is valid as so construed; and (3) the defendant has appropriated the automatic reset feature to its own use. We also emphasize that, even if the plaintiff is successful in proving infringement of the reset feature, such a showing can impose no infringement liability on defendant for use of any or all of the other elements of the magnetic data storage system embodied in the patent, which, we now hold are licensed to the United States. Any recovery will be limited to a reasonable royalty for the reset feature alone. Cf. Cover v. Chicago Eye Shield Co., 130 F. 2d 25 (C.A. 7, 1942). If it turns out that a proper royalty limited to this particular aspect cannot be separately established, the trial commissioner should consider whether plaintiff is entitled to any recovery at all. Cf. New Jersey Zinc Co. v. Singmaster, 4 F. Supp. 967, 980-81 (S.D.N.Y. 1933), modified, 71 F. 2d 277 (C.A. 2, 1934); U.S. Colloid Mill Corp. v. Myers, 6 F. Supp. 283, 285-86, 288 (S.D.N.Y. 1934).
The case is remanded to the trial commissioner for further proceedings consistent with this opinion.
FINDINGS OF FACT
The court, having considered the evidence, the report of Trial Commissioner James F. Davis, and the briefs and arguments of counsel, makes findings of fact as follows :
*1. This is a patent suit under 28 U.S.'C. § 1498 to recover reasonable and entire compensation for alleged unauthorized manufacture for and use by the United States of inventions described and claimed in U.S. Patent No. 2,611,813, entitled "Magnetic Data Storage System." The patent issued September 23, 1952, in the names of T. K. Sharpless and E. S. Eichert, Jr., as joint inventors on an application filed May 26, 1948.
*2. Plaintiff, Technitrol, Inc., is a Pennsylvania corporation and is record owner of the patent in suit (hereafter "Sharpless patent"). Plaintiff's petition, filed April 10,1964, and it's first amended petition, filed February 25, 1966, charge the United States with infringement of patent claims 1-4,6-14 and 16-24.
*3. On October 19, 1965, defendant filed a motion to dismiss or, in the alternative for partial summary judgment, on grounds that the United States is licensed under the Sharp-less patent. Plaintiff, on April 13, 1966, filed a motion for partial summary judgment that defendant is not licensed, or, in the alternative, for an order setting out facts not in con troversy. The court, by order dated March 20,1967, remanded the case to the trial commissioner to find facts relevant to the license issue. The court further ordered that plaintiff, in view of the alleged physical condition of co-inventor T. K. Sharp-less, could perpetuate his testimony, subject to conditions and limitations prescribed by the trial commissioner.
*4. The testimony of T. K. 'Sharpless was taken before the trial commissioner on May 2A-25,1967, and June 12-18,1967. Direct examination was completed, but there was only limited cross-examination. Because of ill health, Sharpless was not thereafter available to testify and he died July 31, 1967. On August 22, 1967, defendant moved to strike Sharpless' testimony for lack of opportunity to complete cross-examination. The trial commissioner denied defendant's motion by order dated September 18, 1967. The court, on October 24, 1967, denied defendant's request for review of the commissioner's order and instructed the commissioner to determine the weight to be given the testimony. On January 3,1968, the trial commissioner who heard the evidence ruled that plaintiff could use Sharpless' testimony and exhibits to corroborate any direct evidence offered by plaintiff on the license issue; that 'Sharpless' testimony regarding his education, employment, etc., would be accorded substantial weight; and that testimony relating to notes, diagrams, projects; patent claims, and licenses would be accorded limited weight.
5. The following glossary of terms is taken from documents in evidence and from the "CHEMICAL ENGINEERS HANDBOOK" by J. H. Perry, 4th ed. 1963, pp. 2-80 to 2-86 (section entitled "Machine Computation") :
Corrvputmg machines — devices, generally divided in two classes, analog and digital, for performing mathematical computations.
Analog computer — a computing machine which performs mathematical operations by using physical magnitudes, such as voltages or positions of dials or levers, to represent the variables of a mathematical problem. .
Digital computer^ — a computing machine, using electronic components, which deals with numbers in sequential fashion to solve a mathematical problem. The numbers are represented by electric pulses which are manipulated by the computer in accordance with instructions called programs.
Binary rmmber system — a system for representing decimal numbers, i.e., 2, 5, 62 etc., in terms of 0's and l's. E.g., decimal number 5 is equivalent to binary number 101, which may be expressed mathematically, as (1X22) + (0X21) + (1X2°) =5. Binary numbers are particularly useful in digital computers since the 0's and l's can be represented by electrical circuits being either on or off, magnetic plate or tape segments being either magnetized or unmagnetized, etc.
Bit — abbreviation of binary digit, the formal name applied to the information contained in a basic element which is either on or off, 0 or 1, "yes" or "no", etc.
Word — a series of bits strung together to represent a unit of information. E.g., the binary number 11010 has 5 bits. It is the binary five-bit word equivalent to the decimal number 26 (1X24) + (1X23) + (0X22) + (1X21) + (0X2°) =26).
Components of a digital computer — digital computers consist of the following basic components:
Input unit — the device for putting information, such as numbers, into a digital computer. Examples are punchcards, magnetic tapes, keyboards, etc. The input unit encodes information (numbers, letters of the alphabet, etc.) into binary form which the computer understands and can manipulate.
Output umit — the device for taking information in the computer in binary form and translating it back to useful information for display or printout. Arithmetic umit — the device for performing mathematical operations, such as addition or subtraction. By electronic circuits and components, the arithmetic unit manipulates bits and words (in the form of electrical pulses) according to a planned sequence to perform a mathematical operation.
Memory or storage umit — the device by which information is retained for use in a digital computer. Information can be stored, e.g., magnetically on drums, disks or tapes, electronically in vacuum tubes or iron cores, or as acoustic pulses in a delay line, such as a mercury delay line. Memory devices are classed as volatile or permanent. A volatile memory device (vacuum tubes, delay lines) loses its stored information if the device loses its power source. A permanent memory device (iron cores, magnetic disks, drums, or tapes) retains its stored data indefinitely and despite power loss.
Control and timing wait — the device for ordering the computer to perform its various functions in timed, sequential fashion. A clock-pulse, such as an oscillator or a rotatable magnetic disk or drum with evenly-spaced magnetized sections, can serve to time and control the computer's sequence of functions.
Programming unit — the device for providing a prepared routine of instructions for solving a problem. Programs are prepared by 'humans and constitute the plan by which the computer is to perform its operations. Programs can be stored in the memory unit like other information.
Serial operation of a digital computer — method by which information is transferred and manipulated along a single channel in the form of a series of pulses (or lack of pulses). Transmittal of information, therefore, takes a time proportional to the length of the words being transmitted. In serial operation, arithmetical computations are performed one bit or digit at a time.
Parallel operation of a digital computer — as opposed to serial operation, method by which sufficient channels are provided to allow all bit positions to be transmitted at once.
Writing — placing information in storage. In magnetic storage devices, writing is magnetizing a portion of the magnetic surface to record information. Writing is done by a "write" head which is an energizable magnetic coil located near the surface of the magnetic device.
Beading — taking information from storage. In magnetic storage devices, reading means detecting magnetized portions of the magnetic surface by a "read" head, similar to a "write" head, but arranged to generate an electric pulse when the magnetized portions pass adj acent the head.
Erasing — deleting information from storage. In magnetic storage devices, erasing is done by "read" or "write" heads, appropriately wired and arranged to demagnetize portions of a magnetic, surf ace;
Register — a device capable of retaining information, usually temporarily. Registers generally are buffers between the main memory unit and other units. On magnetic disks, portions of the storage area which retain words or groups of words can serve as registers.
6. The patent in suit relates to electronic computers and discloses a magnetic data storage system, particularly useful for public carriers, such as commercial airlines, in operating a passenger flight reservations system. The patent specification says:
This invention relates to systems for storing, information, especially where it is desired to transmit, receive and record the information. More particularly, the invention relates to systems where the information is conveyed by means of groups of electrical impulses of the digital, or pulse or no pulse, sort. While the invention may be used for various purposes, by way of example it may be used to store information concerning reservations on public carriers such as airplane lines, railway lines, etc.
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In essence, the system comprises (a) a central storage unit where information about various flights, seats available, etc., is stored, (b) a number of remote stations, such as airport reservation desks, which are in electrical communication with the central unit, (c) an arithmetic adding unit, for calculating information to be placed into the central storage unit, and (d) a control unit for sequencing various operations performed by the system. At the remote stations are keyboards by which an operator, by punching certain keys, can inquire of the central unit whether seats are available .on a particular flight. Through various means, discussed below, the operator can make reservations on flights, if seats are available, or will be informed that no seats are available.
The central storage unit is a magnetic memory device consisting of a plurality of magnetic disks (information disks) mounted on a common shaft for rotation. The shaft is driven by an electric motor. Information is stored on the disks in the form of discrete areas of magnetization, called magnetic pulses. The pulses are arranged in groups around the disk, called registers. Each register contains information about a particular airline flight, such as the number of seats already-reserved and the number still available. The information disks are arranged in pairs, one disk of each pair being used to record "units" digits, the other to record "tens" digits. Magnetic recording heads are mounted adjacent the disks for performing read, write and erase functions. Thus, as the disks rotate on the shaft, the recording heads, through appropriate circuitry, can read the magnetic pulses (or lack thereof) already on the disks, can write new pulses on the disks, or can erase pulses on the disks.
Also located on the common shaft with the information disks is a master or clock disk which has recorded circum-ferentially around its face two channels of magnetic pulses— one channel has 160 evenly-spaced pulses, the other 1 pulse. Magnetic pickup heads are located over each channel. Thus, one head produces 160 evenly-timed pulses per revolution of the clock disk, the other 1 pulse per revolution. The 160-pulse head is connected to a scale-of-ten counter which produces one output pulse for each 10 input pulses. Thus, the counter generates 16 pulses for each revolution of the clock disk; and it thereby divides the information disks into 16 10-pulse registers, or information segments. Pulses from the scale-of-ten counter are applied to a binary counter device which produces 16 unique voltage combinations, each thus representative of one register on the information disks. The voltage combinations are applied to a coincidence circuit, discussed below, to match up with signals from the remote stations.
The plaintiff claims that the one pulse per revolution channel on the clock disk is used to reset the counters to zero after each revolution of the clock disk. The patent specification states:
‡ ‡
The one pulse per revolution output supplied from the clock disk 1 through amplifier an is used to initially set the counters so that the registers on the disks will always maintain the same relation with the pulses on the clock disk as checked by counters 5 [scale-of-ten counter] and g [binary counter], even though the power be shut off and later turned on with the counters coming up containing arbitrary counts.
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The plaintiff further .claims that without the one pulse per revolution channel, the system is position volatile, which means that in the event power is shut off, the clock disk and the counter, normally in synchronization, may lose synchronization. This could occur because the counter, a purely electronic device, stops operating when power stops. Thus on restart, its counts may be arbitrary with respect to the clock disk and, hence, the registers. Also, the disks, being mechanical devices and because of rotational inertia, may rotate slightly after power is shut off, thus moving out of synchronization with the counter. On startup, therefore, it is essential that the counter be reset to zero. The defendant denies that the automatic reset feature is covered by the patent.
The remote stations communicate with the central storage unit through electrical transmission lines. Each remote station has three keyboards by which an operator can designate (a) a particular flight about which he desires information and (b) the number of seat reservations needed. In essence, the keys, through appropriate circuitry and coding, select the register at the central station which contains information about the desired flight. After setting the keyboard, the operator presses a "start" switch which operates a selector circuit to insure that only one keyboard at a time can communicate with the central station. The signal thus generated at the keyboard is transmitted as electrical pulses to the electrical transmission line, then to the central storage unit. The central unit has a line selector for scanning the various transmission lines from the remote stations. When the line selector senses a signal from a remote station attempting to communicate with the central unit, it stops scanning and allows the signal to be transmitted to the central unit. In this way, only one remote station at a time can communicate with the central station, thus avoiding the possibility of simul taneous duplicate requests being made to a register from more than one remote station.
At the central unit, the signal is decoded. The pulses which represent the particular flight desired are sent to the coincidence circuit, above noted; the pulses which represent the number of reservations requested are sent to an. arithmetic adder (a "two decade accumulator"). When the coincidence circuit is activated, thus indicating that the signal from the remote station has located the proper register at the central unit, a 4-stage counter is in turn activated. The 4-stage counter operates circuitry for controlling the sequence of read, write and erase performed by the magnetic heads. In operation, the coincidence circuit first advances the counter to stage 1 which activates the read circuit. The information stored in the selected register, i.e., the number of seats already reserved on the flight, is read and transferred to the adder where it is added to the number of reservations requested, already in the adder, noted above.
At this point, one of two situations exists: either the sum of reservations already made, plus the newly requested reservations, exceeds the flight seating capacity, or it does not. If it does not, then the following occurs: a second coincidence pulse advances the 4-stage counter to stage 2 which in turn activates an erase circuit and the register contents are erased. A third coincidence pulse then advances the counter to stage 3 which, in turn, activates the write circuit to write the sum appearing in the adder onto the register, just erased. Counter stage 3 also activates appropriate circuitry to send back to the remote station a signal, called an end pulse, which lights up a first lamp at the keyboard indicating that the request for reservations transmitted has been accepted and recorded on the proper register. Also, the end pulse resets all the counters and frees the position selector at the remote station which, in turn, allows the line selector at the central unit to resume scanning the transmission lines for signals from other remote stations.
If the sum of reservations already made, plus the requested reservations, exceeds the flight seating capacity, then the following occurs: the adder, through appropriate circuitry, produces an alarm signal which, can occur only during the read operation of the magnetic memory. The alarm signal is transmitted back to the remote station and lights up a second lamp on the keyboard to indicate that the central unit has not accepted the proposed reservations. The alarm pulse produces the same end pulse, above noted, by which the central station equipment is set back to normal condition, ready for another sequence of operations.
7. The patent in suit has 24 claims. Claims 5, 16, 19, and 23 are representative and are set out below in outline form:
5. In an information storage system,
a central station,
a plurality of operating stations,
a transmission line extending from each of said operating stations to said central station,
a plurality of operating positions at each of said operating stations,
a plurality of registers at said central station adapted to receive numerical information and to have such information erased therefrom,
means under control of an operator at any one of said positions at any one of said stations for producing and sending over the line of said station a group of pulses indicative of a particular register and also containing numerical information which it is desired to store in that register,
means for preventing transmissions over the lines of the other stations during the operation at said one station, means for preventing operations at the other positions of said one station during the operation at said one position,
means at said central station responsive to said pulses for selecting said register,
means operable upon selection of said register for indicating at said one position whether or not any number already stored in said register plus that to be stored exceeds a given number, and
means operable only in the event that said given number will not be exceeded for erasing the number already in said register and for storing therein the sum of the erased number and the additional number which it is de sired to store.
16. A system for magnetic storage of a plurality of data respectively relating to different items of information, comprising
a magnetic number having a plurality of magnetizable data storage portions respectively assignable to said different items of information,
a magnetic recording and reading device adjacent ito said magnetic storage member for selectively magnetizing any of said data storage portions for storing data thereon or alternatively for taking a reading of data previously stored thereon,
means for transmitting signals including item selection signals to said storage apparatus,
means for causing continuous relative rotation between said magnetic storage member and said magnetic recording and reading device for continuously scanning said plurality of data storage portions,
circuits separately operable through said magnetic recording and reading device for causing the device to record or read as desired,
selective means responsive to the received signals for rendering a desired one of said circuits operable, and
means including a gating circuit having space discharge tubes and whose timing is controlled by the received selection signals and the instantaneous position of said recording and reading device relative to that of a data storage portion selected, thereby to effect a desired recording or reading operation.
19. In an information storage system,
magnetic recording means having a plurality of information recording sections constituting registers and also having a register-selection section on which are recorded pulses coordinated with said registers,
means for producing from said recorded pulses different successively-occurring register-selection voltage combinations representative respectively of said registers,
means under control of an operator at a remote position for producing a group of pulses indicative of a particular register and also containing numerical information which it is desired to store m that register,
means responsive to some of said pulses for producing a pattern of voltages,
means responsive coincidently to said voltage combinations and said voltage pattern for selecting said register, and
means for storing said numerical information in said register.
23. In an information storage system,
spot magnetization recording means including a plurality of registers adapted to receive _ numerical information and to have such information erased therefrom,
manually settable keyboard means at a remote position,
means operable cooperatively with said keyboard means to produce a group of pulses indicative of a particular register and also containing numerical information which it is desired to store in that register,
means responsive to said pulses for selecting said register,
means operable upon selection of said register for indicating whether or not any number already stored in said register plus that to be stored exceeds a given number, and
means operable only in the event that said given number will not be exceeded for erasing the number already in said register and for storing therein by spot magnetization the sum of the erased number and the additional number which it is desired to store.
*8. On June 5, 1943, the United States entered into Contract No. W'-6'T0-OED-4926 ("ENIAC contract") with the University of Pennsylvania. The contract provided in pertinent part as follows:
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ARTICLE I Scope of Contract. 1. The contractor, in cooperation with and under the direction of representatives of the Ballistic Research Laboratory, the Proving Center, Aberdeen Proving Ground, Aberdeen, Maryland, for a period from the date of execution of this contract until December 31, 1943, shall engage in research and experimental work in connection with the development of an electronic numerical integrator and computer, and shall prepare and deliver to the Government as soon as possible after December 31, 1943, nine copies of a complete report embodying all results of the work hereunder. One copy of this report shall be delivered to the contracting officer and eight copies shall be delivered to the Ballistic Research Laboratory, the Proving Center, Aberdeen Proving Ground, Aberdeen, Maryland. If the research and experimental work dur ing the period covered by the terms of this contract results in the fabrication and completion of any part or unit of the electronic numerical integrator and computer, any such part or parts shall be delivered to the Government at the contractor's plant as soon as possible after December 31, 1943.

ARTICLE VIII Devices Embodying Inmentions and/or Discoveries. The Contractor agrees, as part of the consideration, and without any further cost to the Government to grant to the Government an irrevocable, nonexclusive, royalty-free right and license to make, use, and sell and cause to be made, used, and sold, for any purpose, devices, materials and processes utilizing any and all inventions and/or discoveries made and/or reduced to practice in the execution of this contract, whether patented or unpatented. The Contractor agrees to make to the Government, prior to final settlement under this contract, a complete disclosure of all inventions or discoveries under this contract, a complete disclosure of all inventions or discoveries made and/or developed during the performance of this contract and to grant a power to inspect the papers involved in the prosecution of applications for letters patent on those of the said inventions or discoveries which have been or will be covered by applications for patents filed or caused to be filed by the Contractor. As to all such inventions or discoveries that are not covered or to be covered by applications for patents filed by the Contractor, the Contractor agrees that the Government shall have the right to file, prosecute, and act upon applications for patents thereon; that the Contractor will secure the execution of the necessary papers and do all things requisite to protect the Government's interest in prosecuting such applications to a final issue.
*
A computing machine, called the ENIAC (electronic numerical integrator and computer), was built under the ENIAC contract and completed in late 1946. The ENIAC was the world's first general-purpose electronic computer. Its input and output devices were punchcard equipment and manually operated switches on several portable function tables. Its memory elements, arithmetic elements and control elements consisted essentially of vacuum tubes and associated circuitry. It was designed principally for parallel, multiple channel operation to solve mathematical problems, e.g., differential equations, relating to Army ballistics studies. Programming was done 'by manually setting up the equipment prior to performing computing operations. Although the ENIAC was a general-purpose computer, its capability to perform computations was limited by small internal storage capacity and somewhat clumsy programming techniques.
The proposal for the world's first electronic digital data processor or computer was prepared by the Research Division of the Moore School by Messrs. Eckert and Mauchly. The United States was interested in obtaining an electronic digital computer with broad capabilities having the capacity for a variety of digital data processing operations. Aside from the contract setting forth broad general results desired, the United States did not limit or direct the research and development work which was to be conducted by the Research Division. The United States did not suggest a mode of operation, speed of calculations, type of circuits or logical operations to be used by the Research Division in carrying out and achieving the goals of the ENIAC contract.
The total cost to the United 'States for the ENIAC contract was $487,125.
*9. (a) The original period of ENIAC Contract No. W-670-ORD-4926 (June 5,1943 to December 31,1943) was extended into 1946 by several supplemental agreements and amendments. On October 28,1944, the contract was amended (Supplemental Agreement No. 4) to include in its scope of work provision "research and experimental work in connection with the development of an Electronic Discrete Variable Calculator" (EDVAC). The amendment further provided that a complete work report and any part or unit fabricated as a result of research and experimental work be delivered to the government. Accordingly, a report entitled "Automatic High Speed Computing, A Progress Report on the EDVAC", dated September 30,1945, was ultimately prepared for the government. (Finding 10.) On January 1,1945, the contract was further amended, adding to the scope of work provision that a pilot model of the ENIAC was to be completed by the contractor and delivered to the government by June 30, 1945. The delivery date was later changed to September 30, 1945, then to December 31, 1945. A final supplemental agreement (No. 12) dated November 14,1946, indicated that the pilot model of ENIAC was accepted.
(b) Dr. Murray of the University of Pennsylvania had the responsibility of informing the United States Government of material suggested for patent applications under the ENIAC contract. Dr. Murray relied upon Dr. Travis as supervisor of research at the Moore School to have the necessary' information assembled. Dr. Travis in turn was dependent upon the project supervisors and engineers for the identification of all inventions which were to be listed and reported to Dr. Murray. On May 17, 1946 after Messrs. Eckert and Mauchly had left the employ of the Research Division, a meeting was held between them and Mr. Sharpless so as to identify and list the inventions made by them during their research and development work on the ENIAC and EDVAC projects, and under which they felt the University and the United States had rights. The invention list was intended to indicate the inventions under which the University and the United States had an interest in accordance with University patent policy and the invention rights clause of the ENIAC contract. The list was conveyed to Mr. Sharpless so that he could continue to carry out the obligations of the University of Pennsylvania under the contract. On June 26, 1947, a patent application disclosing the ENIAC was filed in the U.S. Patent Office. It issued February 4,1964, as U.S. Patent No. 3,120,606, to Sperry Rand Corporation, assignee. The United States is licensed under the patent, pursuant to the ENIAC contract.
*10. (a) The report entitled "Automatic High Speed Computing, A Progress Report on the EDVAC" (finding 9), was prepared by Eckert and Mauchly, employees of the Moore School, University of Pennsylvania, and joint inventors of the ENIAC. This EDVAC report was not meant to suggest a final design for an EDVAC-type machine, but rather was a progress report which set forth the research and development conducted up to that time. As is pointed out on pages 4 and 111 thereof: "It must be emphasized that final decisions on many questions cannot yet be made"closer study of alternative circuit designs of further experimental data will be necessary before intelligent choices can be made;" "decisions on many specific questions must await the results of experiments now being undertaken;" and "the designs presented in this report are therefore merely illustrative examples, and should not be considered final." Dated September 30,1945, the report disclosed proposed characteristics of a second generation electronic computer, intended to be an improvement over the ENIAC. The EDVAC was to be an electronic, digital calculator capable of serial operation and having a large memory capacity for storing program information and numbers, such as mathematical function tables. The EDVAC arithmetic equipment was to have immediate or nearly immediate access to any part of the memory unit; and it was contemplated that magnetic wire or tape, rather than punchcards, would be used as input and output devices in order to increase speed of operation.
A large capacity, high speed memory was to be one of EDVAC's basic features. It was desirable to use a high speed memory element so that a large capacity could be obtained with a relatively small amount of equipment. The EDVAC report pointed out that a memory device which satisfied these requirements and which seemed to be the best available was one including a delay line used as a serial storage device, and that the best delay line then known for this purpose consisted of an acoustic mercury delay line which at that time seemed capable of operating at a speed of one pulse per microsecond. However, the report further noted that electronic beam tubes also seemed capable of operating at this speed, and that cheaper memories could be obtained by the use of magnetic devices although at present such devices were not capable of operating at the speed just mentioned and so would be used in EDVAC at a lower speed for permanent or long interval storage.
Thus, besides mercury delay lines, other types of memory elements, such as electrostatic tubes and magnetic drums and disks, also were seriously considered for internal memory use in the EDYAC since they likewise have a large capacity suitable for storing program information. In fact, the Moore School had thought first about the magnetic disk for the EDYAC as is shown by a report prepared by Eckert in January 1944 which is referred to in the EDYAC report, and the mercury device later came from this earlier thinking about the magnetic device. It is clear that magnetic memory devices were fully within the scope of research and development work under the EDYAC project. Another basic feature of the EDYAC was an arrangement for internal programming by which the memory unit stored both operating instructions and numbers upon which operations were to be performed. Thus, no external changes in the arrangement of equipment were needed to prepare EDYAC for different computing operations. This latter feature was a fundamental difference and improvement over the ENIAC which required manual alteration to change programming.
We conclude that the Sharpless magnetic data storage system, except for the automatic reset feature, was conceived in the performance of the EDYAC contract.
(b) On June 30, 1946, the University of Pennsylvania submitted to the government an extensive report entitled "Progress Keport (2) on the EDYAC" (hereafter "second EDYAC report"). The report's introduction, prepared by Sharpless, stated:
This report has been prepared under terms of Supplement 4 of contract W-670-ORD-4926 [ENIAC contract] between the Ordnance Department, U. S. Army and the Trustees of the University of Pennsylvania.
The results contained herein cover the work under this contract since the last report dated September 30, 1945 [EDYAC report]. It consists largely of a great number of circuits and designs for various component parts of a high speed electronic calculator. Some of these have been made up and tested and others are proposals for circuits and devices to try. Three possible designs for EDYAC are discussed in the last three chapters. These designs make use of a number of the components described in other parts of the report.
Thése chapters are also to serve the purpose of disclosures of possible patentable ideas to the Patent Office of the Ordnance Department so that they may take such steps as they deem necessary to protect the interest of the Government in these matters.
At the present time work under this contract has been concentrated on specific design of EDVAC and only those particular circuits and devices disclosed in the report which seem capable of being put into fairly immediate practice are being tested. It is hoped that by January 1, 1947 fairly complete detailed plans for EDVAC will be ready and construction of the machine begun.
The "three possible designs" noted in the introduction, above, were (a) the serial acoustic EDVAC, (b) the channel electrostatic EDVAC, and (c) the channel acoustic EDVAC. Designs (a) and (c) were to use acoustic delay lines as memory devices. Design (b) was to use "electrostatic storage on the screens of ordinary cathode ray tubes." Although none of these designs used magnetic drums or disks for storage, this second EDVAC report elsewhere discussed in some detail the possible uses of magnetic storage devices. In fact, this report both referred to and reproduced the 1944 Eckert magnetic storage report.
*11. On April 12, 1946, the United States entered into Contract No. W-36-034-ORD-7593 ("EDVAC contract") with the University of Pennsylvania. The contract provided in pertinent part:
ARTICLE 1. Scope of the Worla
1. The Contractor shall, as an independent Contractor and not as an agent of the Government, design and develop a preliminary model of a small Electronic Discrete Variable Calculator (hereinafter referred to as "EDVAC") that will demonstrate the feasibility of producing subsequently an EDVAC having comprehensive properties envisioned in the report entitled "Automatic High Speed Computing, University of Pennsylvania", prepared by the Contractor under its Contract No. W-670-0ED-4926 [ENIAC contract], and shall construct and deliver to the Government on or before 30 June 1947, one (1) preliminary model of said EDVAC.
2. In addition thereto, the Contractor shall also prepare and furnish to the Government eight (8) copies of a report describing the research and development Carried out under paragraph 1 of this Article. Said report shall include the furnishing by the Contractor of reproducible drawings and specifications covering the EDVAC constructed as provided in paragraph 1 of this Article. Such report shall cover all such work carried out by the Contractor up to and including 30 June 1947.
*
Article 18 of the EDVAC contract relates to "Patent Rights." In essence, the contractor agreed to grant to the government
an irrevocable, nonexclusive, nontransferable and royalty-free license to practice, and cause to be practiced for the Government, throughout the world, each Subject Invention in the manufacture, use and disposition according to law of any article or material, and the use of any method ."
The contract defined "Subject Invention" as
each invention, improvement and discovery (whether or not patentable) conceived or first actually reduced to practice (i) in the performance of this contract , or (ii) in the performance of any research or development work relating to the subject matter hereof which was done upon the understanding that this contract or any subcontract hereunder would be awarded ."
The United 'States, in entering into this research and development research contract was primarily interested in the advancement of digital computer technology generally and not in the procurement of a particular design or in the hardware which resulted. In the testimony of Dr. Travis, supervisor of research at the Moore School at the time of the EDVAC contract, the EDVAC model was a means to an end, not the end of the contract. The United States in no way directed, limited or restricted the type of research and development to be conducted by the Research Division under the EDVAC contract or its supplements.
The total cost to the United States for the EDVAC contract, including supplements and amendments thereto, was $409,700.
*12, (a) The EDVAC contract was amended by several supplemental agreements. Supplemental Agreement No. 1, dated February 10,1947, amended the "Scope of the Work" article as follows:
*
1. The Contractor shall, as an independent contractor and not as an agent of the Government, design, develop and produce a small Electronic Discrete Variable Calculator, Model 1.5 (hereinafter called. "EDVAC 1.5") that will demonstrate the comprehensive properties envisioned in the report entitled "Automatic High Speed Computing, University of Pennsylvania", prepared by the Contractor under [the ENIAÓ.con-tract] , and shall include the additional features listed below:
a. Automatic Calculation Checking equipment
b. Automatic Division equipment
c. Approximately a 1000 word, memory
d. Input and output typewriting and printing equipment to be furnished by the Government
The completed EDVAC 1.5 shall be delivered to the Government on or before 30 September 1947.
*
The EDVAC contract, as amended on February 10, 1947, retained its research and experimental nature. Further, even though on June 30,1946 the University of Pennsylvania submitted its "second EDVAC report" to the United States, the amended "scope of work" article continued to call for an EDVAC having comprehensive properties envisioned in the September 30,1945 progress report entitled "Automatic High Speed Computing, A Progress Report on the EDVAC", thereby indicating that the design of the EDVAC remained unsettled as of February 10,1947.
Moreover, while for the first time the capacity of the memory was defined to be of approximately 1000 words, the type of memory to be used remained unspecified. No particular type of memory whether magnetic, electrostatic, or acoustical mercury delay line was specified or required by the EDVAC contract as of February 10,1947.
(fo) Supplemental Agreement No. 6, dated September 24, 1947, further amended the "Scope of the Work" article of the EDVAC contract as follows:
*
1. The contractor shall, as an independent contractor and not as an agent of the Government, design, develop and produce a small Electronic Variable Calculator, Model 1.5B (hereinafter called Edvac 1.5B) that will demonstrate the comprehensive properties envisioned in the report entitled "Automatic High Speed Computing, University of Pennsylvania," prepared by the contractor under [the ENIAC contract] and shall include the following features listed below:
a. Automatic calculation checking equipment.
b. Automatic division equipment.
c. Memory consisting of 128 — 8-word tanks, or a total 1024 word memory.
d. Input and output typewriting and printing equipment to be furnished by the Government.
e. Provide a four (4) address code of increased flexibility including multiplication to seventy-four (74) significant binary figures and division with retention of remainder.
f. Provide for operation with either half of the highspeed memory in case of failure of an element in the other half.
g. Increase number of significant binary places from 32 to 43.
h. Inclusion of suitable manual controls and visual indicators for functional checking purposes.
i. Computing, circuits to be designed to handle numbers with the binary point at the extreme left.
The completed Edvac 1.5B shall be delivered to the Govermnent on or before 27 February 1948.
# #
Although the parties agreed to the construction of an EDVAC model 1.5B in place of model 1.5, considerable research and development remained to be done in order to enable the Eesearch Division to construct a full-sized EDVAC. The unsettled state of design is underscored by the reference in the scope of the work clause back to the September 30,1945 EDVAC progress report.
For the first time in either the ENIAC or EDVAC contract the memory to be used in the construction of EDVAC model 1.5B was specified by the parties to be an acoustical mercury delay line memory device.
(c) Supplemental Agreement No. 9, dated April 30,1948, called for the design, development and production of a full-scale EDVAC to achieve completely the objectives set out in the earlier University report. The "Scope of the Work" article was amended as follows:
*
1(a) The research and engineering development work on the EDVAC 1.5B model progressed to such a point that it has been definitely determined, as a result of extensive laboratory tests, it is feasible to incorporate germanium crystals instead of some of the electronic tubes. The results of these laboratory tests indicate that the life of the germanium crystals will be considerably greater than that of conventional vacuum tubes when used. in properly designed circuits. This will result in a reduction of the total number of tubes for a full scale "EDVAC" from approximately 4000 to 3200, and a decrease in operating power of approximately 6 K.W.
1 (b) In the design, development and production of a full scale EDVAC the following features shall be included:
1. Automatic calculation checking equipment.
2. Automatic division equipment.
3. Memory consisting of 128 — 8 word tanks or a total 1024 word memory.
4. Input and output typewriting and printing equipment to be furnished by me Government.
5. Provide for normal four (4) address code plus a supplementary coding system permitting the use of a fifth (5) address to specify arbitrarily the locations in the memory in which word[s] read from the wire shall be stored. Multiplication to be extended from 43 binary digits plus sign to 86 binary digits plus sign whenever it is desirable to retain the less significant figures of a product. The remainder of a division, accurate to 43 binary digits to be retained in addition to a 43 binary digit quotient, which carries a sign.
6. Provide for operation with either half of the high-speed memory in case of failure of an element in the other half.
7. Increase number of significant binary places from 32 to 43.
8. Inclusion of suitable manual controls and visual indicators for functional checking purposes.
9.Computing, circuits , to be designed to handle numbers with the binary point at the extreme left.
10. Incorporate germanium crystals instead of electronic tubes insofar as such replacement appears practicable, in order to minimize maintenance.
11. The amplifiers associated with the acoustic delay lines shall each be designed to reclock pulses so as to increase temperature tolerances.
12. Clock pulses from the timer shall be introduced into all components to the maximum extent practicable. in order to insure synchronous operation not critical to variation in temperature and to values of circuit parameters.
13. The timer to be designed to utilize specially designed pulse transformers so as to maintain its performance essentially independent of its load.
1(c) The EDVAC shall comprise the following units housed in suitable steel cabinets:
1. Code — zero memory
2. Header — Recorder
3. Dispatcher
4. Timer
5. Control
6. Computer
1. Code — one memory
8. Power supply
The completed EDVAC shall be delivered to the Government on or before 1 October 1948.
*
Thus, on April 30,1948, some three and one-half years after research and development work first began on the EDVAC, the parties finally agreed by way of this Supplemental Agreement No. 9 to building a full-scale EDVAC. That the EDVAC contract retained its research and development character until at least April 30,1948 is demonstrated by this Supplemental Agreement No. 9 which is the first EDVAC amendment that does not refer to the September 30, 1945 progress report for the characteristics and properties of the EDVAC which was to be produced.
Supplemental Agreement No. 15, dated June 30, 1949, indicates that the government agreed to accept the completed EDVAC.
13. An acoustic mercury delay line is a memory or storage device for retaining information, sucb as binary numbers, in the form of sonic pulses. The sonic pulses travel at the speed of sound through a tube of mercury as the transmission medium. Input and output transducers (e.g., piezoelectric crystals) are located at each end of the tube for converting electrical signals to sonic signals and back again to electrical signals. An electrical pulse thus applied to the input transducer is converted into a sonic pulse which moves through the mercury line to the output transducer which then reconverts the sonic pulse to an electrical pulse. The output transducer is connected through appropriate circuitry to the input transducer so that the pulses are again applied to the input transducer. In this way, the pulses are continuously and indefinitely circulated through the memory units until such time as they are needed for use in the arithmetic or control unit of the computer. At such time, the electrical pulses at the output transducer are directed through appropriate circuitry into the arithmetic or control sections of the computer.
14. The ENIAC and EDVAC computers as finally delivered to the Government, are both information volatile, which means that information stored in the memory units is completely lost in the event of a power failure. This is so because the ENIAC memory (vacuum tubes) and the EDVAC memory (mercury delay lines) depend for operation on a continuous power source. Computers using magnetic storage devices such as the system in suit are not information volatile because the information is stored in semipermanent form on a magnetic surface and loss of power to the computer therefore does not alter the stored information.
*15. T. K. Sharpless graduated from the Moore School of Electrical Engineering, University of Pennsylvania, in February 1943 with a B.S. degree. Sharpless was not at that time skilled in or knowledgeable of digital data processors or computers. While at the Moore School he received no special training and took no courses in computer technology; at that time none was offered. Sharpless testified that he did not have, at the time of his graduation, the knowledge or background which would have enabled him to design either the involved circuits or the overall combination shown and claimed in the Sharpless patent. He gained this knowledge and skill only-after years of work as a research engineer on the ENIAC and EDVAC projects.
Sharpless was hired as a full-time engineering employee of the Research Division of the Moore School on February 1, 1943. Substantially all of Sharpless' time while employed there was spent as a research engineer assigned to Government-sponsored projects. Between January 1,1944 and July 1, 1945, Sharpless was assigned as a research engineer on the ENIAC project. While so assigned Sharpless' duties included working out engineering layouts and the design details of development of the cycling unit and the accumulators. This work familiarized him with basic computer counter circuits, gate circuits, and the timing pulses which are used to insure proper operation of the entire system.
From July 1, 1945 until the termination of his employment at the Research Division, Sharpless was assigned to the EDVAC project. He was acknowledged in the first EDVAC report of September 30, 1945 as being at that time on the engineering staff for development of the EDVAC.
Sharpless was first assigned as a research engineer to the EDVAC project, tie was later promoted to research associate but remained assigned to the EDVAC. Upon the departure of Mr. Eckert on April 1, 1946, Sharpless was promoted to technical director for digital computer projects. In this capacity Sharpless was in charge of the entire digital computer program at the Moore School, and supervised a group of engineers. Included in his duties was technical responsibility over the entire EDVAC project. After April 1, 1946, nothing of technical significance occurred on the EDVAC project in which Sharpless did not participate.
Sharpless remained on the payroll of the Research Division of the Moore School until October 15,1947. Substantially all of his salary during his employment at the Research Division was charged to United States projects and was ultimately paid by the United States.
*16. E. Stuart Eichert, Jr., received a B.S. degree in electrical engineering from the Moore School of Electrical Engi neering, University of Pennsylvania, in June 1942. After serving in the Army, Eichert returned to the Moore School on September 17, 1945. He worked on a noise elimination project sponsored by the U.S. Navy and left the Moore School on April 30,1947, to begin work with Technitrol Engineering Company. While at the Moore School, Eichert worked on neither the ENIAC nor EDVAC projects.
*17. The idea of forming plaintiff was originally thought of by Mr. John F. Koch, Jr. Technitrol was started with the intent and business purpose of exploiting the application of the new technology of high speed computation to the military and industrial fields. It was incorporated on April 15, 1947 by John F. Koch, Jr., E. Stuart Eichert, Gordon Palmer and T. K. Sharpless, as Technitrol Engineering Company. The corporate name was changed to Technitrol, Inc. on March 6, 1961.
Sharpless was extremely important to the fledgling business association because of the knowledge of digital computers that he had gained from his years of work on the ENIAC and EDVAC projects.
While Technitrol officially opened its doors for business on May 1, 1947, the four participants were actually soliciting contracts for almost a full year before that. Sharpless, as early as March 1947, and while he was still a full-time employee of the Research Division, personally attempted to obtain work for Technitrol in the digital computer field, i.e. in the same technical field in which he was doing research and development work on the EDVAC contract. During the summer of 1947, although still a full-time employee of the Moore School, Sharpless worked for Technitrol on occasional evenings. During the first two weeks of August 1947, while the Moore School was closed for vacation, Sharpless devoted full work-days to Technitrol's activities. Sharpless remained on the Moore School payroll until October 15, 1947.
*18. From July 1, 1947 to September 30, 1947, Technitrol had three projects in progress: Job No. 101 — development of a small-boat radar unit; Job No. 102 — development of an experimental mercury delay line memory unit; and Job No. 103 — development of an automatic cash registry system for supermarkets.
In the summer of 1947, while Sharpless was working for Technitrol Engineering Co., one Edward Eogal informed Sharpless and Koch about problems of the commercial airlines in making and recording passenger flight reservations. Eogal was interested in Technitrol for technical assistance in the areas of electronic switching, computing and memory techniques, all of which are generally classified in the category of electronic digital computation. It was generally believed by Eogal, American Airlines representatives, and Technitrol that the solution to the desired electronically computerized reservation system would be found in the new digital computer technology. On August 4, 1947, Koch and Sharpless met with Eogal and representatives of American Airlines to discuss a computerized reservations system. American's representatives said that it would not pay Technitrol for development of the system.
After the above-noted meeting, Sharpless submitted to Technitrol on August 5, 1947 a trip report which recommended that Technitrol proceed at its own expense to develop a reservation system. Koch and Sharpless considered the key element of such a system to be the memory unit. At that time Koch and Sharpless felt that the system could be developed, and the first model built and installed for about $25,000. As it turned out, substantially no research was required or performed by Technitrol in building its feasibility model.
*19. The "Keservisor" system, as ultimately developed by Technitrol, is described in the patent in suit filed on May 26, 1948. (Finding 6.) After meeting with American Airlines' representatives on August 4, 1947 and during his vacation from the Moore School in August 1947, Sharpless prepared notes on his concept of the system. Notes dated August 7, 1947 describe a keyboard to be located at a remote station, (e.y., an airline ticket office), the keyboard having pushbut-tons for selecting the date, flight number, and number of reservations to be requested. In operation, the appropriate pushbuttons are set and an "operate" lever depressed. If the requested reservations are accepted by the system, a signal light indicating acceptance is activated at the keyboard. If no reservations are available, a second signal light indicating rejection is activated, along with a counter showing the number of reservations available. The keyboard also has a cancel lever by which reservations can be canceled. An undated worksheet prepared by Sharpless shows equipment to be located at the central station, including a magnetic drum-type memory device and a plurality of recording heads near the surface of the memory drum. There are further features relating to the functioning of the voltage comparitor. The drawings further show an arithmetic unit for performing subtraction as well as addition, thus indicating that the system contemplated by Sharpless was to be capable of canceling reservations as well as making them. Another worksheet prepared by Sharpless, dated August 12,1947, shows a decimal adder unit with two decimal counters (a) to receive signals from the remote station indicating the number of reservations requested and (b) to receive signals from the memory device indicating the number of reservations previously made. The adder unit included a circuit to produce an output signal when the sum of the reservations requested and reservations already made exceeded the reservations available, thus to indicate that no more reservations were available on the particular flight. The adder unit had circuitry for transferring the results of its arithmetic operations to the memory device, and further included means for resetting the counters after arithmetic operations were complete.
Another worksheet prepared by Sharpless, dated August 13, 1947, shows a memory unit for the reservations system which includes a rotatable magnetic drum, a first set of recording heads located adjacent the periphery of the drum for reading or writing information on the drum, and a second set of heads located on the opposite side of the drum for erasing information magnetically recorded on the drum. The worksheet does not disclose circuits providing for the sequence in which the reading, recording, and erasing functions are to be performed.
All the above-noted worksheets of Sharpless were witnessed by Eichert, Palmer, and Koch on April 16,1948. None of them disclose any means for synchronizing the memory drum with the counter at the central station in the event of a power failure in the system. In a worksheet dated August 15, 1947, Sharpless showed a single trunk line, with selector switches at both ends, connecting the keyboard at the remote station to the central station. The worksheet was not witnessed.
*20. During October 1 and 2, 1947, when Sharpless was still receiving full-time wages for his work on the EDYAC contract as Technical Director of Digital Computer Projects at the [Research Division, he made additional drawings for the American Airlines project which show specific details or ways of implementing certain functions of the August 1947 materials and are fully consistent with them. Later, after beginning full-time work for Technitrol on October 15,1947 and through the end of that year, Sharpless continued work on Job No. 107, the "Reservisor" system. The system worked on included a magnetic clock disk rotatable on a shaft and having thereon pre-recorded areas of magnetization and a magnetic reading head responsive to the areas of magnetization for generating electrical pulses. The pulses generated by the disk and reading head were applied through a decimal counter to a binary counter to provide voltage patterns indicative of the positions of the clock disk and information disks on a common rotatable shaft, relative to the reading heads associated with the disks. There is, however, no evidence to show that the use of a single reset pulse on the clock disk to synchronize the equipment at the central station was contemplated by Sharpless during the last three months of 1947.
*21. E. S. Eichert, during his employment at Technitrol, first worked on Job No. 101 to develop a small radar unit. He also worked jointly with Sharpless on Job No. 103 to develop an automatic cash registry system, which work resulted in the issuance of U.S. Patent No. 2,528,394 jointly to Sharpless and Eichert. Eichert's contact at Technitrol with the "Reservisor" project in 1947 consisted of work with Sharpless on occasional evenings and Saturdays. He re viewed drawings prepared by Sharpless and offered advice and criticism. In December 1947, it was decided at Technitrol that Eiehert should assist Sharpless on the "Reservisor" project; and on or about January 1, 1948, Eiehert was assigned to the project.
*22. To show progress on the "Reservisor" project up to January 1, 1948, when Eiehert joined the project, Sharp-less prepared a drawing entitled "T.E.C. 107 Reservisor (model) Block Diag.", dated January 7, 1948. The drawing shows a system having three remote stations, each of which communicates with a central station over respective transmission lines. Three keyboards are located at each remote station. The keyboards generate electrical signals representing the date, flight, and number of reservations requested. A scanning device at each remote station selects one of the keyboards at the station to be placed in communication with the central station. A cycler unit at each remote station controls the sequence by which signals from the selected keyboard are applied to the transmission line. Each keyboard has two lamps for indicating whether requested reservations are accepted by the central station.
The central station includes a memory device comprising a plurality of magnetic disks (information disks) mounted for rotation on a common shaft. The purpose of the information disks is to store data, such as number of seats available on various flights, by means of magnetized areas on the disks. A master disk, or dock disk, is also mounted on the common shaft. It has a series of magnetized areas uniformly spaced around the circumference of the disk. A reading head mounted adjacent the master disk converts the magnetized areas recorded on the master disk into electrical pulses as the disk rotates. The pulses are applied to the input of a decimal counter. The decimal counter provides a single output pulse for every 10 input pulses, thereby dividing the information disks into 10-pulse registers. The output of the decimal counter is connected to a binary counter which produces different voltage combinations, each representative of a register on the information disks. A single recording head for performing read, write, and erase functions is associated with each information disk. The central station also includes a cycler unit for directing pulses received from remote stations to other units of the central station. Some of the pulses generated at the keyboards, and received at the central station, are applied to a voltage comparitor which, through appropriate circuitry, compares and matches the pulses to the voltage combinations produced by the binary counter, thereby to select the proper register on which to read, write or erase information. Circuitry, including a counter, is provided for controlling the sequence of read, write and erase functions.
Finally, the drawing illustrates a scanning device at the central station for locating the transmission line on which signals are being sent from a remote station. The arithmetic unit at the central station is not shown, nor is there shown any means for producing one pulse per revolution of the master disk as a counter reset arrangement.
*23. In reviewing the drawings made by Sharpless in 1948 (finding 22), Eichert recognized the problem of position volatility. (Finding 6.) To solve the problem, Eichert suggested using a single coordinating pulse on the master disk which resets the counters each revolution of the disk. Eich-ert's suggestion was incorporated in Sharpless' drawing by adding a single pulse channel to the master disk and a second read head adjacent to the master disk to read the pulse. In turn, the second read head was connected to the counters. By such arrangement, a single output pulse was generated for every revolution of the master disk to reset the decimal and binary counters once per revolution of the master disk to insure that counts appearing in those counters corresponded to appropriate information registers on the information disks.
*24. In early 1948, Sharpless and Eichert continued work on the "Keservisor" project. Eichert worked on the selector circuit of the central station, i.e., the part of the equipment which selected the desired register in the memory unit in response to signals from a remote unit. Sharpless worked on the central scanning device, read-write circuitry for the memory system, the keyboards at the remote stations, the disk storage unit including the clock disk with two read ing heads, and the arithmetic unit at the central station. On April 14, 1948, a memory unit was successfully operated. In the operation, pulses were applied to and erased from a selected sector of a magnetic disk. After magnetization of areas on the disk, the areas were read as the disk rotated past a reading head. Sectors on the disk to be magnetized were selected by a binary counter which counted the pulses on a master disk, mechanically connected to the information disk, and applied a signal to read, record or erase when the count in the binary counter agreed with a previously set code.
Operation of the memory unit on April 14, 1948, did not include operation of the keyboards, which were simulated. On May 21, 1948, a system including remote keyboards was successfully operated. Through the keyboards, one, two or three pulses could be inserted into a selected register of the memory unit through an adder. The adder summed the pulses to those already in the selected register and cleared itself when the register was filled to capacity.
On June 14, 1948, the "Reservisor" system developed at Technitrol was demonstrated to representatives of American Airlines. American did not purchase the system, but rather obtained a system from the Teleregister Corporation.
*25. When Sharpless and Eichert began employment with the University of Pennsylvania, they had no formal patent agreements. The University's patent policy, as described in the school's catalog, was brought to the attention of Sharpless and other University employees working on the ENIAC contract, by a memorandum circulated among them. The memorandum said, among other things:
UNIVERSITY Policy on Patents on Inventions AND DISCOVERIES
(Other than those affecting public health)
Where researches, in fields other than those affecting public health, are carried out on University time or at University expense by special grants or otherwise, patents may, with the approval of the President of the University, be applied for on inventions or discoveries, in which case the inventor shall assign his rights in the patent to tbe University upon the payment to the patentee of Ms expense in securing the patent. The University will then exercise its ownership of such patent with or without profit, with due regard for the interests of all persons concerned.
The memorandum also quoted Article VIII of the ENIAC contract. (Finding 8.)
On November 30, 1945, Eichert signed a document which called to his attention the "Patent Licenses" provision of a U.S. Navy contract with the University on noise elimination. By this document, he agreed that any patentable ideas, devices or inventions developed by him in connection with the work on the contract, and invented or developed while he was in the employ of the University, belonged to the University and to the government. Thus, both Sharpless and Eichert were or should have been aware of the government's rights under any inventions which resulted from government-sponsored projects.
*26. In 1946, Sharpless and Eichert entered formal patent agreements with the University of Pennsylvania. The agreements set out the responsibility of the University to administer inventions made at the University for the best interests of governmental and commercial sponsors. The agreements provided:
I agree that all inventions, discoveries and improvements, patentable or unpatentable, made or conceived by me during my employment by the University and relating to my work at the University shall be the property of the University. I agree to make full written disclosures to the University of all such inventions, discoveries and improvements promptly after they are made or conceived by me, and to execute upon request all documents, including patent applications and assignments thereof, which in the opinion of the University are necessary or desirable in order to enable it to obtain legal protection for said inventions, discoveries and improvements, and to acquire my entire right, title and interest in and to the same.
I further agree to abide by and to cooperate with the University in observing the provisions with respect to patent rights contained in any contract to which the Uni versity is, or may be, a party when engaged in work carried on under such contract.
Accordingly, Sharpless, as well as all engineers who signed such invention agreements, in effect granted an irrevocable, non-exclusive, royalty-free license to the United States under all inventions which were conceived by them in the performance of the EDVAC contract.
In the fall of 1946, Dr. Travis, as supervisor of the De-search Division, established an invention reporting procedure to settle questions of ownership of inventions made by Research Division employees. The procedure was outlined in a memorandum that was circulated at the Research Division. The memorandum stated :
1. It is to be expected that the research engineers working on various projects will from time to time have patentable ideas which are in no way related, or at least not directly related, to the research work which they are doing for the University. It is considered that ideas which have no connection with the project work being done by the engineer are the property of the inventor.
2. When such patentable ideas are conceived they should be written up and forwarded to this office. They will then be presented to the University administration whereupon it will be determined whether the University has rights under the patent agreement in effect between the University and research personnel. If no rights accrue to the University, the inventor will be so notified in writing, after which he is free to pursue the exploitation of the invention as he desires and as his time permits.
3. It is required that this memorandum be brought to the attention of all personnel who have signed a patent release. It is most important that such questions be settled at the earliest possible time after conception of an invention in order to preclude misunderstandings.
Accordingly, it is found that the University intended that any Moore School Research Division employee who conceived a patentable idea would submit it to the supervisor of research to establish ownership of the invention. This procedure was to be followed by all Research Division employees irrespective of whether the idea related to his work assign ment or not, and irrespective of where the idea was conceived or made.
Mr. 'Sharpless, who we assume knew of this procedure, failed to call the invention disclosed in the August 1947 drawings to the attention of the Research Division supervisor, even though it was made while he was still a full-time employee of the Research Division.
*27. (a) On March 22, 1950, while the Sharpless-Eichert patent application was pending in the Patent Office, Interference No. 84,368 was declared between such application and an application filed by Edwin L. Schmidt, assigned to the Teleregister Corporation. Schmidt's application ultimately issued as U.S. Patent No. 2,587,532, on February 26, 1952. The interference was declared with a single count in issue, the count being a claim originating in the Schmidt application. It reads:
1. In a magnetic storage device for signal pulses, a continuously rotatable magnetic member, an electromagnetic head suitably disposed with respect to a surface of said member for producing spot magnetization thereon or for taking an individual spot reading therefrom,
circuits separately operable through windings of said head for causing it to record or to read as required, selective means responsive to a signal for rendering a desired one of said circuits operable,
and a gating device subject to control by received selecting signals for coordinating the instantaneous position of said member with a spot position selected for recording or reading.
Sharpless, et al. was the junior party in the interference; it was therefore essential to avoid judgment on the record being entered against them, and they filed a preliminary statement in which they swore to facts and dates which would place their conception of the claimed invention involved in the interference at a time earlier than the filing date of the senior party Schmidt's application.
In their preliminary statement filed April 27,1950, Sharp-less and Eichert swore that the first drawing of the invention defined by the count was made in August 1947; that the invention was first disclosed to other persons in July 1947; and that the invention was first actually reduced to practice in April 1948.
On July 27, 1950, Sharpless and Eichert filed a motion to amend the interference by adding three new counts (A, B, and C) which corresponded to claims previously allowed in the Schmidt application. Ultimately, count C issued in the Sharpless-Eiehert patent as claim 16. Count A (count B is not here pertinent) reads (emphasis added) :
A system for magnetic storage of a plurality of data respectively relating to different items of information, comprising
a magnetic member having a plurality of magnetizable data storage portions respectively assignable to said different items of information,
a magnetic recording and reading device adjacent to said magnetic storage member for selectively magnetizing any of said data storage portions for storing data thereon or alternatively for taking a reading of data previously stored thereon,
means for transmitting signals including item selection signals to said storage apparatus,
means for causing continuous relative rotation between said magnetic storage member and said magnetic recording and reading device for continuously scanning said plurality of data storage portions,
circuits separately operable through said magnetic recording and reading device for causing the device to record or read as desired,
selective means responsive to the received signals for rendering a desired one of said circuits operable, and
a gating circuit whose timing is determined jointly by the received selection signals and a particular instantaneous position of said recording and reading device relative to that of a data storage portion selected, said, first named circuits being controlled by said gating circuit for effecting a recording or reading operation.
In their memorandum supporting the motion to amend the interference, Sharpless and Eichert argued that the last clause of count A was supported in their disclosure by "gating circuit d (Figs. 4 and 7) [which] operates in response to pulses produced by the master controlling disk 1, so as to effect the recited timing." A similar argument was made with respect to the last clause of count C (claim 16 of the patent in suit). On December 5, 1950, Sharpless and Eickert filed a Motion under rule 233 (e) that they intended to rely on the original preliminary statement with respect to new counts A and C (as well as B). A rule 233 (e) statement can only be used where the parties intend to rely on all of the facts and dates already sworn to in a prior preliminary statement.
It was necessary for Sharpless, et al. to swear again to invention dates prior to the filing date of the Schmidt application in order to avoid having judgment on the record rendered against them.
We therefore conclude that all elements of the Sharpless magnetic data storage system, except the automatic reset feature, were conceived prior to Sharpless' departure from the Moore School on October 15,1947.
(b) On May 22,1951, Technitrol and Teleregister Corporation entered a cross-license agreement by which Technitrol and Teleregister granted licenses to one another under their respective patent applications in interference (Sharpless-Eichert application and Schmidt application). The license agreement set out a procedure for settling the priority issue in the interference. The parties agreed to exchange evidence, to review the evidence of the opposing party, and to file in the Patent Office appropriate concessions of priority. Pursuant to the settlement agreement, Sharpless and Eichert submitted to Teleregister as evidence the trip report prepared by Sharpless dated August 5,1947, notes prepared by Sharp-less in early August 1947, and the drawing entitled "T.E.C. 107 Eeservisor (model) Block Diag.", dated January 7,1948. They also submitted an outline of testimony in which they asserted that " a complete conception of the invention in issue was had during the first part of August 1947
(c) On June 28, 1951, Sharpless and Eichert filed in the Patent Office a concession of priority with respect to, among others, interference count 3. The same day, Schmidt filed a concession of priority with respect to count 5 (claim 16 of the patent in suit). Accordingly, the Patent Office awarded priority of invention of count 3 to Schmidt and of count 5 to Sharpless and Eichert.
*28. U.S. Patent No. 2,587,532, issued to Edwin L. Schmidt on February 26, 1952, discloses a system for storing data magnetically. The magnetic storage member of the system comprises a plurality of disks mounted on a common shaft for continuous rotation. Data in the form of magnetized spots is stored on the disks. A stationary circular plate is located at the end of the shaft. The plate has conductive segments evenly spaced about its circumference. A contact brush mounted at the end of the shaft sweeps over the conductive segments as the shaft rotates, thus making electrical contact. Appropriate electrical signals are applied to the conductive segments. The circuits, thus completed by the conductive segments and the brush, select positions on the disks at which a "read" or "write" function is to be performed. The Schmidt device does not have the problem of position volatility since it does not have a clock disk and an associated electronic counter for generating timed signals.
*29. In a civil action in the United States District Court for the Northern District of New York, Technitrol charged Sperry Band Corporation with infringement of the patent here in suit. Pursuant to a stipulation of the parties filed therein, Technitrol agreed to disclose to Sperry Band the earliest dates of alleged conception and reduction to practice of the invention on which it would rely. If the dates were different with respect to different claims of the patent, Technitrol agreed to specify the different dates. In compliance with the stipulation, Technitrol filed a statement on August 30,1960 which stated:
" that the earliest date of conception of the inventions which are the subject of the Sharpless, et al patent upon which the plaintiff would rely at the trial of this action is during the period from June 25, 1947 to July 6,1947."
In addition, Technitrol admitted that the earliest date of reduction to practice was during April 1948. These admissions are in substantial agreement with plaintiff's admissions made in connection with the Schmidt interference and with the evaluation and analysis of the August 1947 drawings by defendant's witnesses.
C0N0LTTSX03ST OF LAW
Upon tbe foregoing findings of fact, which are made a part of the judgment herein (except as otherwise noted), the court concludes as a matter of law that
1) defendant is fully licensed under claim 16 of the Patent No. 2,611,813.
2) defendant is licensed under all other claims of said patent except to the extent such claims are validly limited to the automatic reset feature.
The case is remanded to the trial commissioner for further proceedings consistent with the opinion.
The parties have agreed that four claims (6, 16, 19, 23) are representative of the claimed subject matter of the patent, and therefore that the scope of the patent can be determined by reference to those claims.
We are obligated to Commissioner James If. Davis for Ills opinion, parts of which we Incorporate although we reach a different result, and for his findings of fact. Defendant tabes numerous exceptions to those findings, exceptions which are practically all opposed by plaintiff. We have endeavored to resolve these conflicts only as to those factual areas material to our disposition of the limited issue now before us. Our findings in those areas (and in areas in which no substantial controversy between the parties exists) are marked by an asterisk, and are intended as conclusive determinations of the matters contained therein for the whole of this litigation. Other findings, not marked by an asterisk, are adopted solely for the purposes of this opinion; the parties are free to attack or to support them In subsequent proceedings.
Nor those uninitiated in the computer art, a glossary of terms, helpful for understanding this opinion, is set out In finding 5.
Defendant denies that any of the claims in suit covers this automatic or memory reset feature.
U.S. Patent No. 3,120,606, filed In June 1947 by joint inventors Join W. Mauchly and J. Presper Elckert.
Tbe ENIAC agreement contained tbe following patent rights clause:
"Devices Embodying Inventions and/or Discoveries. Tbe Contractor [tbe university of Pennsylvania] agrees, as part of tbe consideration, and without any further cost to tbe Government to grant to tbe Government an irrevocable, nonexclusive, royalty-free right and license to make, use, and sell and cause to be made, used, and sold, for any purpose, devices, materials and processes utilizing any and all inventions and/or discoveries made and/or reduced to practice in tbe execution of this contract, whether patented or unpatented. Tbe Contractor agrees to make to tbe Government, prior to final settlement under this contract, a complete disclosure of all inventions or discoveries under this contract, a complete disclosure of all inventions or discoveries made and/or developed during tbe performance of this contract and to grant a power to inspect tbe papers involved in tbe prosecution of applications for letters patent on those of tbe said inventions or discoveries which have been or will be covered by applications for patents filed or caused to be filed by tbe Contractor. As to all such inventions or discoveries that are not covered or to be covered by applications for patents filed by the Contractor, tbe Contractor agrees that the Government shall have the right to file, prosecute, and act upon applications for patents thereon; that tbe Contractor will secure tbe execution of tbe necessary papers and do all things requisite to protect tbe Government's interest in prosecuting such applications to a final issue."
The parties dispute -whether Sharpless left the Moore School on September 30th or October 15th. We do not consider this difference very important, but on the weight of the evidence we determine that October 15th is the more probable date.
Whether Sharpless was authorized by the University to "moonlight" for Technitrol during this period is hotly contested. Defendant offered the testimony of Dr. Travis, Sharpless' supervisor at the Moore School, who stated that clear University policy forbade outside employment by non-academic personnel, and that he did not recall being asked to make, or making, an exception for Sharpless' benefit. Plaintiff relied on a pleading by the University in a separate private action which said that Sharpless had been given permission to act in a consulting capacity for Technitrol (the pleading did not specify the areas in which he was permitted to work). We do not undertake to resolve this dispute. Even if it had been established, which it was not, that the University believed that Sharpless' work for Technitrol involved no impermissible overlap with the EDVAC project, this would not determine the Government's rights as licensee (Mine Safety Appliances Co. v. Unites States, 176 Ct. Cl. 777, 787, 364 F. 2d 385, 391 (1966)).
35 U.S.C. § 112 says that an "element In a claim for a combination may be expressed as a means * » * for performing a specified function without the recital of structure in support thereof, and such claim shall be construed to cover the corresponding structure described in the specifications and equivalents thereof." See Ellicott Machine Corp. v. United States, 186 Ct. Cl. 655, 664-65, 405 F. 2d 1385, 1390 (1969); Stearns v. Tinker & Rasor, 252 F. 2d 589, 597 (C.A. 9, 1957). The trial commissioner found that the register-selection function of the claimed system is performed, in part, by the two-channel clock disk which he thought to be "corresponding structure described in the specification" within the meaning of § 112.
The corresponding license provision of the ENIAC contract is framed in somewhat different language, but, in our view, gives the Government identical rights to inventions or discoveries made in the course of that contract. See note 6, supra.
The automatic reset feature which plaintiff contends is covered in the patent, and defendant says is not so embodied, was not shown in these drawings. As indicated supra, we do not now decide whether that feature is covered by the patent.
Civil Action No. 7305 (N.D.N.Y. 1959).
United States Patent No. 2,629,887 Issued to Eckert and Mauchly In 1953.
Dr. Travis, supervisor of research at the Moore School, testified (at the trial on the license issue) concerning the EDVAC contract:
"If you read the language carefully, you are struck with the conclusion that the thing the Government wants is a computer having the comprehensive properties envisioned in a report, and that the small model as a means to an end, and that certainly a total means to an end would include not only the hardware that might be incorporated in such a model, but certainly recommendations for further improvements and ideas that were generated, during the course of the building of the small model in order to achieve the end result which the Government is really interested in."
Since we find that all of the Sharpless system, except for the automatic reset feature, was conceived in the performance of the EDVAC contract itself, we need not consider whether, and to what extent, it would also be covered by the ENIAC contract, either as an independent agreement containing a license provision or, under the EDVAC license clause, as "research and development work relating to the subject matter hereof [the EDVAC contract] which was done upon the understanding that this contract or any subcontract hereunder would be awarded."
Sharpless admitted on the stand that, without his participation in the ENIAC-EDVAC program, he probably would not have been able to make his invention.
See footnote 2, supra.