Patent Infringement - Felt & Tarrant Company
Letters related to the on-going competition with the Felt and Tarrant Company.
Chicago, September 11, 1897
The American Arithmometer Company,
St Louis, Missouri,
Gentleman:
Pursuant to your request I have carefully examined and studied each one of your nine Burroughs patents, and compared them to the Felt and Tarrant machine (built under and in accordance with patent No. 568,021, to Dorr E. Felt, September 22, 1896) for the purpose of determining whether or not said machine infringes any of your patents. As a result of my examination I am obliged to report that, in my opinion, there is no clear infringement of any claim of any one of your patents. The reason for my conclusion in this respect will be found set forth in the annexed pages, where I have taken up your patents in order and explained each of them and compared with the Felt and Tarrant machine, and stated why, in my opinion, there was no infringement.
For convenience in referring to the different patents and questions in the necessarily lengthy opinion, I insert here an index by means of which you may readily turn to the discussion of any particular patents.
Patent No. 386,116 Page 1-10
388,117 Page 11
388,118 Page 12 – 35
380,119 Page 36 – 41
420,617 Page 42 – 50
420,618 Page 51
504,963 Page 56 – 57
505,078 Page 58 – 73
Conclusion - Page 74 – 79
Charles Foster
Frank Freeman
Foster& freeman
Counselors in Patent Causes
931 F Street
Washington, D. C.
November 19th 1897
America Arithmometer Co.
Dear Sirs: --
We enclose our report in regard to the infringement of the Burroughs patents by the Felt Comptometer.
We think that you have, under quite a number of claims, an excellent case against the Comptometer parties, and would advise that they be notified at once that they are infringing and request to desist.
Inasmuch as these instruments are being sold in Washington, D. C., it would be probably more economical to bring suit here than elsewhere. We have a very fair Court here, much more liberal towards patents than in some other circuits, although there would be no objection, if you so desire, to bringing suit either in New York or Connecticut, where the Courts are fully as liberal as they are here.
We do not think you should wait too long, as any great delay would be construed into a certain amount of acquiescence.
Awaiting your further instructions, we remain,
Yours truly,
Frank Freeman
Foster& Freeman,
Patent Attorneys.
Washington, Philadelphia,
New York
REPORT (November 19, 1897)
Under the various Letters Patent to William S. Burroughs, for Calculating Machines, as to infringement by the manufacturer, sale, or use of the Comptograph, substantially as shown in Letters Patent to D. E. Felt, No. 568,021.
We have thoroughly and carefully dissected the Comptometer machine so as to understand its construction and operation, and we have carefully gone over all of the Burroughs’ patents, and over all of the claims of the said patents, and have systematically compared each of the claims of each of the said patents with the constructions shown in the Comptometer.
In our following report, we have in comparing some of the claims, referred to different parts of the specifications, either of the Burroughs patents or of some of the Felt patents (all of which Felt patents, we have carefully examined) in order to put on the record certain memoranda which will hereafter revive our recollection in case suit is brought, and avoid the necessity of digging again into the specifications and drawings.
We will (…………….unreadable………….) patents in succession which we think would probably be held by the Court to be infringed. Where we have not referred to a claim, it will be understood that we consider, after careful comparison, that such a claim is not infringed by the Comptometer construction.
BURROUGHS’ LETTERS PATENT
NO. 388,116.
Claim
2.
The Comptometer has a series of independent indicators; a series pf keys to each indicator; connections (which include all between the key and indicator) whereby each indicator is operated on the movement of any key of a series (the word “on” does not necessarily mean simultaneous, for in fact, the operation in the Burroughs’ machine is not actually simultaneous; connections whereby each indicator, on completing its revolution, turns the next higher one step; means for disconnecting the indicators from the connections after each number is registered, etc. These means are the resetting devices. In the Burroughs’ construction, the disconnection is effected by withdrawing the register from engagement with the racks, but on page 3, lines 125 to 135, it will be seen that it is set forth that “the register and the rack may be kept in constant connection, each pinion having a ratchet connection with the indicator so as to turn the latter when the rack is raised but to revolve independently of the indicator when the rack descends.”
This describes exactly the construction of the Comptometer.
We are of opinion that this
claim is infringed.
Claims 7.
The Comptometer has keys, series of levers, indicators……
Edward Rector
Law offices of Rector &
Hibben
1060 Monadrock Bldg.
Chicago
11 January, 1904
To the Board of Directors of the American Arithmometer Company,
Gentleman: -
I desire to place on record a report upon the Felt patent No. 628,176 of July 4, 1899, owned by the Comptograph Company of Chicago, and under which that Company desires that our Company shall take a license. The matter has been inf9rmally discussed by the members of our Board of Directors at various times, and is now presented for some definite action.
The Felt patent purports to cover somewhat broadly the employment of what we commonly term “wide frame” or “broad frame” paper carriages upon adding machines, being paper carriages adapted to accommodate a wide sheet of paper and to be shifted laterally of the machine so as to print several columns of figures side by side upon the same sheet of paper, as which the paper consists of a narrow strip mounted in fixed position opposite the printing types.
The Comptograph people claim that the Felt patents broadly covers every practicable form of such wide-frame laterally movable paper carriages on adding machines employing such paper carriages.
On the other hand, it may will be argued that the patent has no such broad scope, and that, if it has, it is nevertheless invalid in view of the prior art. My personal opinion, from investigations I have made from time to time since the patent was issued, is that the patent be broadly sustained in the manner claimed by its owners, and I believe a successful defense can be made to
any suit brought upon it.
There is, however, the contingency (even though it be remote) that the owners of the Felt patents and their counsel may be right in their views, and that the Courts would broadly sustain the patent; in which event it would be necessary to either discontinue the manufacturer and sale of adding machines employing such wide-frame paper carriages, or devise some such different form of paper carriage as might possibly avoid the patent, or pay the royalty which might be demanded by the
owners of the patent for the privilege of continuing the use of the invention.
In addition to this, we have up to the present time manufactured and sold, and there are now in use all over the country, some seven or eight thousand of our machines equipped with wide-frame paper carriages, all of which would infringe the Felt patent if the claims of its owners can be maintained; and if those claims should be maintained, it would perhaps not be a very difficult matter to establish the fact that the owners of the patent were entitled to recover a large some of money from us, in the way of profits and damages, because of our past infringement of the patent.
Some three or four years ago, soon after the Felt patent was issued, its owners notified us that they considered we were infringing the patent and demanded that we discontinue the infringement and settle for the past. Believing then, as now, that the patent was invalid, we ignored such notice and demand, or at least refused to recognize them, and after considerable
communication back and forth finally told the owners of the patent that we would neither discontinue the manufacturer of our wide-frame machines nor pay them anything on account of those we had made, and that they might bring suit against
us if they saw fit to do so. That was perhaps two years ago, since which time the matter has been allowed to rest until within the past few months. Within that period the manager of the Comptograph Company has come to us with a proposition that we in effect join hands with the owners of the patent, and endeavor to have it sustained, and if successful to then jointly control a monopoly of wide-frame machines. The original proposition was (1) that we should pay a substantial sum in cash (say $10,000) on account of the machines which we have manufactured and sold in the past, (2) that for the future we
should pay a nominal royalty (say $1 per machine) until a final decision of the Courts could be had determining the scope and validity of the Felt patent, and (3) in event the patent should be broadly sustained, so as to control all practical forms of wide-frame machines, we should then pay a substantial royalty (say $20 per machine) upon all machines manufactured and sold by us after such decision of the Court and during the remainder of the life of the patent. In consideration of our agreeing to this, the owners of the patent proposed to release us from all claims for past infringement and grant us an exclusive
license (exclusive of everybody excepting the Comptograph Company) to manufacturer and sell adding machines employing the invention covered by the Felt patent.
As a result of an informal rejection of this proposition on our part, and of various interviews with the manager of the Comptograph Company, the proposition has been modified and made more liberal toward us, in the following respects: The Comptograph people agree to waive any payment on account of machines heretofore manufactured and sold by us, and to accept as the final royalty upon machines which we may manufacturer and sell after a decision of the Courts broadly sustaining the patent, the sum of $10 per machine, so that it is now proposed that we shall from the present time until a decision of the Courts is had pay a nominal royalty of $1 per machine, and then, in event the patent shall be broadly sustained, pay a royalty of $10 per machine on all machines thereafter manufactured and sold by us which embody the invention of the Felt patent under the construction placed upon the etter by the Courts.
Upon our acceptance of the proposition the Comptograph Company agrees to immediately bring suit against some competing company which is infringing the patent and to vigorously prosecute such suit to a final determination. This litigation would probably cover a period of something like two years, so that during that time we would be obliged to pay $1 per machine royalty, and at its termination, if the patent should be broadly sustained, we would be obligated to pay $10 per machine
royalty on all machines thereafter manufacturer and sold.
The undertaking to pay a royalty of $10 per machine, under any conditions or contingencies, is of course a serious one, requiring careful and deliberate consideration, since at our present rate of manufacturer such royalty would amount to upwards of $50,000 per year, and if our business progresses during the next few years as it has during the past this amount would soon be increased to $75,000, and possibly $100,000, per year.
On the other hand, if the Felt patent can be sustained so broadly as to control all practicable forms of wide-frame adding machines, and the Comptograph Company and our company be thereby enabled to monopolize between them the entire market for such machines, the license under the Felt patent would of course be worth a great deal more that $10 per machine to us, and we could well afford to pay that rate of royalty, no matter how much it might amount to in the aggregate.
As stated, I have succeeded in getting this proposed rate of royalty reduced from $20 to $10 per machine, but I have not succeeded in getting a further reduction of it, although I have striven to do so. The difficulty has been that no good argument seems available, for the reason that the whole proposition is based upon the assumption that we shall be able, with the Felt patent, to control the market for wide-frame adding machines, and if this position can be maintained the right to use the invention is admittedly worth the amount of royalty demanded.
So far as the payment of royalty at $1 per machine during the litigation is concerned, I am satisfied that we would be fully justified in paying this royalty to escape the annoyance of litigation ourselves, and the greater or less interference with our trade, even if we were reasonable certain that the result of the litigation would be the overthrow of the Felt patent. I also feel that we would be thoroughly justified in paying this royalty in order to be released from the claim of the owners of the Felt patent against the machines heretofore manufactured and sold by us, for no matter how unfounded we may believe that claim to be, it has in it remote possibilities of danger which we would be warranted in paying something to be rid of it.
It therefore seems to me that the principal question for our determination is whether it is advisable to take a license under the Felt patent which may, under any conditions and contingencies, obligate us to pay such a very large royalty as this proposition contemplates our paying in event the Felt patent shall be sustained by the Courts. In determining this question I think we should do so upon the assumption and belief that the chances are very strongly against the Felt patent’s being
broadly sustained by the Courts, my personal view, from a legal standpoint, being that, in respect to its broader claims, it is invalid in view of the prior art.
Respectfully,
E. Rector.
Chicago, August 29, 1906
Burroughs Adding Machine Co.,
Detroit, Michigan.
Gentleman: --
Felt Paper Lock Patent No. 694,955.
We have procured from the Patent Office the substance of the file wrapper contents of this patent, together with copies of prior patents contents of this patent, together with copies of prior patents cited by the Examiner against claims presented from time to time by Felt. We have also had an independent examination of the prior art made by Washington associates and we have drawn from the supply of information at Dayton in the same connection.
FILE WRAPPER CONTENTS
Felt claimed originally in broad language the idea of applying a lock to a tabulating machine arranged to act automatically upon the completion of a full column of printed items. His patent illustrates two separate kinds of means for actuating the lock. One comes into play automatically by reason of the inserted paper passing beyond a certain point. The other comes
into play by reason of the line-spacing gears having moved a certain number of steps.
The Examiner first rejected broad claims upon reference is the patent to Sutton, No. 359,368, March 15, 1887, stating:
“The cloth measurer of utton both adds the length of the sheet and marks or tabulates the yards. After the piece of goods ends the mechanism is locked.”
This Sutton patent shows a cloth measuring and marking machine in which the cloth is carried in a roll or bolt on a laterally movable support and fed over a measuring roller grooved near the measuring roller a small roll drops into the groove of said
measuring roller and operates a lock to prevent further movement of the registering dial. Type rotate with the measuring roller to mark off the cloth as it passes over the same.
Felt amended the rejected claims and argued that friction was not a fair reference, first because his machine could not make varying additions or print varying numbers and second because the Sutton machine was not operable at all in the same sense as the Felt machine. It was also argued that Sutton provided no means for giving the material lateral movement, but, as
before stated, the Sutton patent does show means for shifting the bolt or roll of cloth laterally.
You will see from the above that Felt’s broad idea was fairly met by the Sutton patent, that is to say the broad idea of causing a lock to automatically operate upon the running out of the sheet of paper or other material, or upon the completion of a column of imprints.
The Examiner also cited the patent to Barnett, No. 513976 February 6, 1894, showing a typewriting machine wherein the roller platen is automatically locked against forward turning upon the running out of the paper. In the Barnett machine the power operates to hold the locking pawl away from a ratchet on the roller platen. When the bottom edge of the paper is reached this pawl drops upon the ratchet and prevents further rotation of the platen. Then the bottom edge of the paper is reached this pawl drops upon the ratchet and prevents further rotation of the platen. Reference was made to the Macauley patent No. 587,042, July 27, 1897, to show that no invention would be involved in applying the Barnett lock to a typewriter having an adding attachment, or in other works to a tabulating adding machine.
Felt argued that Barnett was not a good reference because of showing no means for locking printing mechanism, but only continued printing.
The Examiner then cited in addition to the Barnett patent the patent to Blakeman, No. 623,940, April 25, 1899, and the prior patent to Felt, No. 644,287, February 27, 1900, holding that no invention would be involved in substituting the roller platen of Blakeman or Barnett for one of the paper feed rollers of said Felt patent, both the Blakeman and Barnett platen rollers being equipped with automatic locks. The Blakeman lock is rendered effective, not by the passing of the bottom edge of the paper, but by the extent to which the roller platen turns in feeding the paper forward. Thus the Examiner was able to cite patents showing broadly both of Felt’s locking devices, one operated by the running out of the paper and the other by the
turning of the roller.
Following this rejection Felt introduced new claims and made an elaborate argument urging that the Blakeman or Barnett devices introduced into the earlier Felt machine would not operate to lock the machine, but simply the platen or feed roller; that the essence of the Felt invention was the locking of the printing mechanism and that the introduction of either the Blakeman or Barnett devices into the machine would not prevent contained printing after the end of the paper had been
reached, or further addition. The circumstance was noted by Felt that Blakeman refers in his specification to locking the keys of the typewriter but argued that the failure to disclose any means for so doing deprived the patent or pertinency in this regard.
The Examiner replied that the locking of the feed mechanism such as would take place in the Felt machine if the Blakeman or Barnett (unreadable…….)
Felt having asserted that with the Blakeman or Barnett lock in the earlier Felt machine, “something would have to break or give way” in order to get the operating handle back to normal after the lock had operated, the Examiner turned this upon him as virtually admitting the efficiency of the Blakeman or Barnett devices to lock up the
Felt then cancelled four of the rejecting claims substantiating claims 1 to 4 of the patent and amended the other three rejected claims which appear as Nos. 28, 29, and 31 of the patent.
Accompanying this amendment was the following statement:
“Applicant is apparently the first to automatically prevent at a predetermined time the operation of an adding machine mechanism which is operatively connected with a sheet printing mechanism, that is to say printing mechanism for printing two or more columns side by side.
It is to be noted that this claim provides for locking the printing mechanism of a laterally movable carriage at the bottom of a column, whatever the lateral position of the carriage.
In view of the above amendment and the demonstration before the Examiner of the working of the invention in a commercially operative machine, allowance is respectfully urged.”
Of course the above indicates that there was an oral interview which resulted in allowance of the application and so the file wrapper contents may not fully disclose the considerations which prevailed with the Examiner in resolving doubts in Felt’s
favor. However, it would seem that the Examiner was impressed with the argument that Felt was the first to introduce a paper-controlled lock in an adding machine operable at will and having mechanism for printing two or more columns
side by side. We have seen, however, that the ideas of applying such an automatic lock to a typewriter with a laterally shifting paper carriage was old. The mere addition of an adding mechanism certainly would not of itself import patentability.
It is true that neither the Sutton, Barnett, or Blakeman patents cited by the Examiner disclose means for locking a machine against printing, Sutton locks his registering dial, not the type-carrying roller which may continue to turn. Blakeman and Barnett simply lock roller mechanisms. Felt also makes a point about locking adding mechanisms though Sutton certainly discloses this. However, Felt argues that Sutton’s machine is not operable at will. The locking of the platen, as in Barnett or Blakeman, might be entirely sufficient to guard against continued operation of the machine after the paper has gone by but you will recall that Felt argued at great length that an application of the Barnett or Blakeman devices to his prior machine would not produce the desired result. He maintained that in order to be thoroughly effective the automatic lock must prevent any printing or adding after the paper had passed the lock controlled point and that in his prior machine the locking of the platen or feed roller would be inadequate because the operating lever could still be depressed and an imprint made and an amount added, all if this being done before the line-spacing so that the preventing of the latter would not be sufficient to
guard against printing off the paper or adding an amount so printed. Doubtless this argument was again brought forward at the oral interview when the machine was being demonstrated. The point urged by Felt with reference to laterally movable paper carriages as distinguishing his invention from prior patents presumably has reference to the circumstance that, whereas the lock-controlling devices are on the carriage and movable with it, an operative relation is preserved between the
same and a lock which does not partake of the lateral movement, being applied to an actuating device stationarily located.
Chicago, September 11, 1897
The American Arithmometer Company,
St Louis, Missouri,
Gentleman:
Pursuant to your request I have carefully examined and studied each one of your nine Burroughs patents, and compared them to the Felt and Tarrant machine (built under and in accordance with patent No. 568,021, to Dorr E. Felt, September 22, 1896) for the purpose of determining whether or not said machine infringes any of your patents. As a result of my examination I am obliged to report that, in my opinion, there is no clear infringement of any claim of any one of your patents. The reason for my conclusion in this respect will be found set forth in the annexed pages, where I have taken up your patents in order and explained each of them and compared with the Felt and Tarrant machine, and stated why, in my opinion, there was no infringement.
For convenience in referring to the different patents and questions in the necessarily lengthy opinion, I insert here an index by means of which you may readily turn to the discussion of any particular patents.
Patent No. 386,116 Page 1-10
388,117 Page 11
388,118 Page 12 – 35
380,119 Page 36 – 41
420,617 Page 42 – 50
420,618 Page 51
504,963 Page 56 – 57
505,078 Page 58 – 73
Conclusion - Page 74 – 79
Charles Foster
Frank Freeman
Foster& freeman
Counselors in Patent Causes
931 F Street
Washington, D. C.
November 19th 1897
America Arithmometer Co.
Dear Sirs: --
We enclose our report in regard to the infringement of the Burroughs patents by the Felt Comptometer.
We think that you have, under quite a number of claims, an excellent case against the Comptometer parties, and would advise that they be notified at once that they are infringing and request to desist.
Inasmuch as these instruments are being sold in Washington, D. C., it would be probably more economical to bring suit here than elsewhere. We have a very fair Court here, much more liberal towards patents than in some other circuits, although there would be no objection, if you so desire, to bringing suit either in New York or Connecticut, where the Courts are fully as liberal as they are here.
We do not think you should wait too long, as any great delay would be construed into a certain amount of acquiescence.
Awaiting your further instructions, we remain,
Yours truly,
Frank Freeman
Foster& Freeman,
Patent Attorneys.
Washington, Philadelphia,
New York
REPORT (November 19, 1897)
Under the various Letters Patent to William S. Burroughs, for Calculating Machines, as to infringement by the manufacturer, sale, or use of the Comptograph, substantially as shown in Letters Patent to D. E. Felt, No. 568,021.
We have thoroughly and carefully dissected the Comptometer machine so as to understand its construction and operation, and we have carefully gone over all of the Burroughs’ patents, and over all of the claims of the said patents, and have systematically compared each of the claims of each of the said patents with the constructions shown in the Comptometer.
In our following report, we have in comparing some of the claims, referred to different parts of the specifications, either of the Burroughs patents or of some of the Felt patents (all of which Felt patents, we have carefully examined) in order to put on the record certain memoranda which will hereafter revive our recollection in case suit is brought, and avoid the necessity of digging again into the specifications and drawings.
We will (…………….unreadable………….) patents in succession which we think would probably be held by the Court to be infringed. Where we have not referred to a claim, it will be understood that we consider, after careful comparison, that such a claim is not infringed by the Comptometer construction.
BURROUGHS’ LETTERS PATENT
NO. 388,116.
Claim
2.
The Comptometer has a series of independent indicators; a series pf keys to each indicator; connections (which include all between the key and indicator) whereby each indicator is operated on the movement of any key of a series (the word “on” does not necessarily mean simultaneous, for in fact, the operation in the Burroughs’ machine is not actually simultaneous; connections whereby each indicator, on completing its revolution, turns the next higher one step; means for disconnecting the indicators from the connections after each number is registered, etc. These means are the resetting devices. In the Burroughs’ construction, the disconnection is effected by withdrawing the register from engagement with the racks, but on page 3, lines 125 to 135, it will be seen that it is set forth that “the register and the rack may be kept in constant connection, each pinion having a ratchet connection with the indicator so as to turn the latter when the rack is raised but to revolve independently of the indicator when the rack descends.”
This describes exactly the construction of the Comptometer.
We are of opinion that this
claim is infringed.
Claims 7.
The Comptometer has keys, series of levers, indicators……
Edward Rector
Law offices of Rector &
Hibben
1060 Monadrock Bldg.
Chicago
11 January, 1904
To the Board of Directors of the American Arithmometer Company,
Gentleman: -
I desire to place on record a report upon the Felt patent No. 628,176 of July 4, 1899, owned by the Comptograph Company of Chicago, and under which that Company desires that our Company shall take a license. The matter has been inf9rmally discussed by the members of our Board of Directors at various times, and is now presented for some definite action.
The Felt patent purports to cover somewhat broadly the employment of what we commonly term “wide frame” or “broad frame” paper carriages upon adding machines, being paper carriages adapted to accommodate a wide sheet of paper and to be shifted laterally of the machine so as to print several columns of figures side by side upon the same sheet of paper, as which the paper consists of a narrow strip mounted in fixed position opposite the printing types.
The Comptograph people claim that the Felt patents broadly covers every practicable form of such wide-frame laterally movable paper carriages on adding machines employing such paper carriages.
On the other hand, it may will be argued that the patent has no such broad scope, and that, if it has, it is nevertheless invalid in view of the prior art. My personal opinion, from investigations I have made from time to time since the patent was issued, is that the patent be broadly sustained in the manner claimed by its owners, and I believe a successful defense can be made to
any suit brought upon it.
There is, however, the contingency (even though it be remote) that the owners of the Felt patents and their counsel may be right in their views, and that the Courts would broadly sustain the patent; in which event it would be necessary to either discontinue the manufacturer and sale of adding machines employing such wide-frame paper carriages, or devise some such different form of paper carriage as might possibly avoid the patent, or pay the royalty which might be demanded by the
owners of the patent for the privilege of continuing the use of the invention.
In addition to this, we have up to the present time manufactured and sold, and there are now in use all over the country, some seven or eight thousand of our machines equipped with wide-frame paper carriages, all of which would infringe the Felt patent if the claims of its owners can be maintained; and if those claims should be maintained, it would perhaps not be a very difficult matter to establish the fact that the owners of the patent were entitled to recover a large some of money from us, in the way of profits and damages, because of our past infringement of the patent.
Some three or four years ago, soon after the Felt patent was issued, its owners notified us that they considered we were infringing the patent and demanded that we discontinue the infringement and settle for the past. Believing then, as now, that the patent was invalid, we ignored such notice and demand, or at least refused to recognize them, and after considerable
communication back and forth finally told the owners of the patent that we would neither discontinue the manufacturer of our wide-frame machines nor pay them anything on account of those we had made, and that they might bring suit against
us if they saw fit to do so. That was perhaps two years ago, since which time the matter has been allowed to rest until within the past few months. Within that period the manager of the Comptograph Company has come to us with a proposition that we in effect join hands with the owners of the patent, and endeavor to have it sustained, and if successful to then jointly control a monopoly of wide-frame machines. The original proposition was (1) that we should pay a substantial sum in cash (say $10,000) on account of the machines which we have manufactured and sold in the past, (2) that for the future we
should pay a nominal royalty (say $1 per machine) until a final decision of the Courts could be had determining the scope and validity of the Felt patent, and (3) in event the patent should be broadly sustained, so as to control all practical forms of wide-frame machines, we should then pay a substantial royalty (say $20 per machine) upon all machines manufactured and sold by us after such decision of the Court and during the remainder of the life of the patent. In consideration of our agreeing to this, the owners of the patent proposed to release us from all claims for past infringement and grant us an exclusive
license (exclusive of everybody excepting the Comptograph Company) to manufacturer and sell adding machines employing the invention covered by the Felt patent.
As a result of an informal rejection of this proposition on our part, and of various interviews with the manager of the Comptograph Company, the proposition has been modified and made more liberal toward us, in the following respects: The Comptograph people agree to waive any payment on account of machines heretofore manufactured and sold by us, and to accept as the final royalty upon machines which we may manufacturer and sell after a decision of the Courts broadly sustaining the patent, the sum of $10 per machine, so that it is now proposed that we shall from the present time until a decision of the Courts is had pay a nominal royalty of $1 per machine, and then, in event the patent shall be broadly sustained, pay a royalty of $10 per machine on all machines thereafter manufactured and sold by us which embody the invention of the Felt patent under the construction placed upon the etter by the Courts.
Upon our acceptance of the proposition the Comptograph Company agrees to immediately bring suit against some competing company which is infringing the patent and to vigorously prosecute such suit to a final determination. This litigation would probably cover a period of something like two years, so that during that time we would be obliged to pay $1 per machine royalty, and at its termination, if the patent should be broadly sustained, we would be obligated to pay $10 per machine
royalty on all machines thereafter manufacturer and sold.
The undertaking to pay a royalty of $10 per machine, under any conditions or contingencies, is of course a serious one, requiring careful and deliberate consideration, since at our present rate of manufacturer such royalty would amount to upwards of $50,000 per year, and if our business progresses during the next few years as it has during the past this amount would soon be increased to $75,000, and possibly $100,000, per year.
On the other hand, if the Felt patent can be sustained so broadly as to control all practicable forms of wide-frame adding machines, and the Comptograph Company and our company be thereby enabled to monopolize between them the entire market for such machines, the license under the Felt patent would of course be worth a great deal more that $10 per machine to us, and we could well afford to pay that rate of royalty, no matter how much it might amount to in the aggregate.
As stated, I have succeeded in getting this proposed rate of royalty reduced from $20 to $10 per machine, but I have not succeeded in getting a further reduction of it, although I have striven to do so. The difficulty has been that no good argument seems available, for the reason that the whole proposition is based upon the assumption that we shall be able, with the Felt patent, to control the market for wide-frame adding machines, and if this position can be maintained the right to use the invention is admittedly worth the amount of royalty demanded.
So far as the payment of royalty at $1 per machine during the litigation is concerned, I am satisfied that we would be fully justified in paying this royalty to escape the annoyance of litigation ourselves, and the greater or less interference with our trade, even if we were reasonable certain that the result of the litigation would be the overthrow of the Felt patent. I also feel that we would be thoroughly justified in paying this royalty in order to be released from the claim of the owners of the Felt patent against the machines heretofore manufactured and sold by us, for no matter how unfounded we may believe that claim to be, it has in it remote possibilities of danger which we would be warranted in paying something to be rid of it.
It therefore seems to me that the principal question for our determination is whether it is advisable to take a license under the Felt patent which may, under any conditions and contingencies, obligate us to pay such a very large royalty as this proposition contemplates our paying in event the Felt patent shall be sustained by the Courts. In determining this question I think we should do so upon the assumption and belief that the chances are very strongly against the Felt patent’s being
broadly sustained by the Courts, my personal view, from a legal standpoint, being that, in respect to its broader claims, it is invalid in view of the prior art.
Respectfully,
E. Rector.
Chicago, August 29, 1906
Burroughs Adding Machine Co.,
Detroit, Michigan.
Gentleman: --
Felt Paper Lock Patent No. 694,955.
We have procured from the Patent Office the substance of the file wrapper contents of this patent, together with copies of prior patents contents of this patent, together with copies of prior patents cited by the Examiner against claims presented from time to time by Felt. We have also had an independent examination of the prior art made by Washington associates and we have drawn from the supply of information at Dayton in the same connection.
FILE WRAPPER CONTENTS
Felt claimed originally in broad language the idea of applying a lock to a tabulating machine arranged to act automatically upon the completion of a full column of printed items. His patent illustrates two separate kinds of means for actuating the lock. One comes into play automatically by reason of the inserted paper passing beyond a certain point. The other comes
into play by reason of the line-spacing gears having moved a certain number of steps.
The Examiner first rejected broad claims upon reference is the patent to Sutton, No. 359,368, March 15, 1887, stating:
“The cloth measurer of utton both adds the length of the sheet and marks or tabulates the yards. After the piece of goods ends the mechanism is locked.”
This Sutton patent shows a cloth measuring and marking machine in which the cloth is carried in a roll or bolt on a laterally movable support and fed over a measuring roller grooved near the measuring roller a small roll drops into the groove of said
measuring roller and operates a lock to prevent further movement of the registering dial. Type rotate with the measuring roller to mark off the cloth as it passes over the same.
Felt amended the rejected claims and argued that friction was not a fair reference, first because his machine could not make varying additions or print varying numbers and second because the Sutton machine was not operable at all in the same sense as the Felt machine. It was also argued that Sutton provided no means for giving the material lateral movement, but, as
before stated, the Sutton patent does show means for shifting the bolt or roll of cloth laterally.
You will see from the above that Felt’s broad idea was fairly met by the Sutton patent, that is to say the broad idea of causing a lock to automatically operate upon the running out of the sheet of paper or other material, or upon the completion of a column of imprints.
The Examiner also cited the patent to Barnett, No. 513976 February 6, 1894, showing a typewriting machine wherein the roller platen is automatically locked against forward turning upon the running out of the paper. In the Barnett machine the power operates to hold the locking pawl away from a ratchet on the roller platen. When the bottom edge of the paper is reached this pawl drops upon the ratchet and prevents further rotation of the platen. Then the bottom edge of the paper is reached this pawl drops upon the ratchet and prevents further rotation of the platen. Reference was made to the Macauley patent No. 587,042, July 27, 1897, to show that no invention would be involved in applying the Barnett lock to a typewriter having an adding attachment, or in other works to a tabulating adding machine.
Felt argued that Barnett was not a good reference because of showing no means for locking printing mechanism, but only continued printing.
The Examiner then cited in addition to the Barnett patent the patent to Blakeman, No. 623,940, April 25, 1899, and the prior patent to Felt, No. 644,287, February 27, 1900, holding that no invention would be involved in substituting the roller platen of Blakeman or Barnett for one of the paper feed rollers of said Felt patent, both the Blakeman and Barnett platen rollers being equipped with automatic locks. The Blakeman lock is rendered effective, not by the passing of the bottom edge of the paper, but by the extent to which the roller platen turns in feeding the paper forward. Thus the Examiner was able to cite patents showing broadly both of Felt’s locking devices, one operated by the running out of the paper and the other by the
turning of the roller.
Following this rejection Felt introduced new claims and made an elaborate argument urging that the Blakeman or Barnett devices introduced into the earlier Felt machine would not operate to lock the machine, but simply the platen or feed roller; that the essence of the Felt invention was the locking of the printing mechanism and that the introduction of either the Blakeman or Barnett devices into the machine would not prevent contained printing after the end of the paper had been
reached, or further addition. The circumstance was noted by Felt that Blakeman refers in his specification to locking the keys of the typewriter but argued that the failure to disclose any means for so doing deprived the patent or pertinency in this regard.
The Examiner replied that the locking of the feed mechanism such as would take place in the Felt machine if the Blakeman or Barnett (unreadable…….)
Felt having asserted that with the Blakeman or Barnett lock in the earlier Felt machine, “something would have to break or give way” in order to get the operating handle back to normal after the lock had operated, the Examiner turned this upon him as virtually admitting the efficiency of the Blakeman or Barnett devices to lock up the
Felt then cancelled four of the rejecting claims substantiating claims 1 to 4 of the patent and amended the other three rejected claims which appear as Nos. 28, 29, and 31 of the patent.
Accompanying this amendment was the following statement:
“Applicant is apparently the first to automatically prevent at a predetermined time the operation of an adding machine mechanism which is operatively connected with a sheet printing mechanism, that is to say printing mechanism for printing two or more columns side by side.
It is to be noted that this claim provides for locking the printing mechanism of a laterally movable carriage at the bottom of a column, whatever the lateral position of the carriage.
In view of the above amendment and the demonstration before the Examiner of the working of the invention in a commercially operative machine, allowance is respectfully urged.”
Of course the above indicates that there was an oral interview which resulted in allowance of the application and so the file wrapper contents may not fully disclose the considerations which prevailed with the Examiner in resolving doubts in Felt’s
favor. However, it would seem that the Examiner was impressed with the argument that Felt was the first to introduce a paper-controlled lock in an adding machine operable at will and having mechanism for printing two or more columns
side by side. We have seen, however, that the ideas of applying such an automatic lock to a typewriter with a laterally shifting paper carriage was old. The mere addition of an adding mechanism certainly would not of itself import patentability.
It is true that neither the Sutton, Barnett, or Blakeman patents cited by the Examiner disclose means for locking a machine against printing, Sutton locks his registering dial, not the type-carrying roller which may continue to turn. Blakeman and Barnett simply lock roller mechanisms. Felt also makes a point about locking adding mechanisms though Sutton certainly discloses this. However, Felt argues that Sutton’s machine is not operable at will. The locking of the platen, as in Barnett or Blakeman, might be entirely sufficient to guard against continued operation of the machine after the paper has gone by but you will recall that Felt argued at great length that an application of the Barnett or Blakeman devices to his prior machine would not produce the desired result. He maintained that in order to be thoroughly effective the automatic lock must prevent any printing or adding after the paper had passed the lock controlled point and that in his prior machine the locking of the platen or feed roller would be inadequate because the operating lever could still be depressed and an imprint made and an amount added, all if this being done before the line-spacing so that the preventing of the latter would not be sufficient to
guard against printing off the paper or adding an amount so printed. Doubtless this argument was again brought forward at the oral interview when the machine was being demonstrated. The point urged by Felt with reference to laterally movable paper carriages as distinguishing his invention from prior patents presumably has reference to the circumstance that, whereas the lock-controlling devices are on the carriage and movable with it, an operative relation is preserved between the
same and a lock which does not partake of the lateral movement, being applied to an actuating device stationarily located.