Opinion
No. C-26.
May 3, 1943.
Jo. Baily Brown, of Pittsburgh, Pa., for plaintiffs.
Clifton v. Edwards, of New York City, and Francis M. Shea, Asst. Atty. Gen. (J. F. Mothershead and T. Hayward Brown, both of Washington, D.C. on the brief), for defendant.
Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
Proceeding by the National Electric Signaling Company, Paul H. Byers, receiver of National Electric Signaling Company, and International Radio Telegraph Company, now International Devices Company, against the United States.
Judgment for the International Devices Company.
This case is now before the court on accounting for the purpose of determining reasonable and entire compensation for the use by the government, without the consent of the owner, of inventions covered by certain patents for the accounting period from February 5, 1917, to June 21, 1920. The amount of compensation asked is $689,584.64, together with an additional amount measured by a reasonable rate of interest at 5 percenturn per annum.
Special Findings of Fact.
1. The court in its special findings of fact and opinion of January 9, 1933 (76 Ct.Cl. 545), held that Fessenden patent 727,330 was invalid as to claims 1 and 5 which were relied upon; that Fessenden patent 979,144 was invalid as to claim 1 which was relied upon; that Fessenden patent 1,050,441 was valid and infringed as to claims 1-4, inclusive, 6, 9, 22-25, inclusive, and 29; and that Fessenden patent 1,050,728 was valid and infringed as to claims 1, 2, 9-12, inclusive, and 14.
The reasonable and entire compensation is based upon the infringement of the two last enumerated patents, which are known as the "heterodyne" patents.
2. The accounting period in this case is from February 5, 1917 (six years prior to the filing of the original petition in this case) to June 21, 1920, at which time the plaintiffs sold the patents in suit.
The two Fessenden patents which form the basis of this accounting relate respectively to apparatus for (patent 1,050,441) and a method of (patent 1,050,728) radio communication.
3. In so far as the present accounting is concerned, it is limited to radio telegraphy in which letters and symbols are represented by certain groupings of dots and dashes produced at the transmitting station by a telegraph key which is closed for a relatively short interval to form a dot and for a longer interval to form a dash. These signals are conveyed from the receiving apparatus to the ear of the operator at the receiving station by means of a telephone receiver, or an equivalent device, as sounds of short or long duration, and as the message is received the receiving operator re-transcribes these sounds into the original letters and symbols.
The pitch or frequency of the sound produced in the telephone receivers at the receiving station must be within the perception range of the human ear, or, to use radio terminology, must be of "audio-frequency." By way of example, a tone having a frequency of 500 cycles per second produces a well-defined musical note.
4. In the transmission of energy from the transmitting antenna to the receiving antenna it is necessary to utilize alternating currents of extremely high frequency, these sometimes being in the nature of one million cycles per second. These high frequency or "radio-frequency" currents are produced by a suitable generating means at the transmitting station and caused to flow in the antenna circuit. Energy is radiated from that antenna at a wave-length determined by this "radio-frequency," some of this energy being picked up by the receiving antenna which is tuned to respond to that particular radio-frequency.
The energy flowing in the transmitting antenna may be broken up into periods of short or long duration by means of a telegraph key, but as this radio-frequency is far above the range of audibility it is necessary to modulate the radio-frequency energy at an audio-frequency either at the transmitting station or at the receiving station in order to transmit intelligence.
One of the features of the heterodyne patents in suit relates to the production of an audio-frequency at the receiving station.
5. With reference to the production of an audio-frequency tone at the transmitting station, two systems were in use at the beginning of the accounting period. These systems were as follows:
(a) The spark transmitter. In this system the high-frequency energy fed into the antenna was created by the discharge of a condenser across a spark gap. Each discharge of the spark gap or each spark created a train of radio-frequency waves. The high voltage necessary to charge the condenser and cause the spark gap to operate was supplied by means of a transformer which changed an input current of relatively low voltage into an output current of high voltage. The input low voltage current was varied at audio-frequency, thereby causing a series of sparks at audio-frequency.
As a specific and widely used example, the input of the transformer was connected to a generator supplying an alternating current at a frequency of 500 cycles per second. Each time the current reached its peak in the cycle a spark occurred across the spark gap, releasing an individual train of high-frequency energy which was fed into the transmitting antenna. The telegraph key was connected to control the flow of 500 cycle current to the transformer so that as long as the key was held closed a series of trains of radio-frequency waves emanated from the transmitting antenna, the individual trains of which were spaced apart at an audio-frequency of 500 cycles. Suitable manipulation of the key therefore formed the dots and dashes of the Morse code at an audio-frequency of 500 cycles.
Spark transmitting systems were in use throughout the accounting period.
(b) The chopper. In this system a generator of continuous high-frequency energy, such as an arc or alternator, was employed. The technical definitive name of this type of transmission is "continuous wave" or, as frequently abbreviated, CW. The supply of this energy through the antenna circuit was controlled by means of a telegraph key arranged to supply the antenna circuit with long or short impulses of high-frequency energy.
As this was of itself above the range of audibility a device known as a chopper was associated with the circuit, the chopper comprising, as essential elements, some device such as a rotating motor-driven wheel having a series of contact segments on its periphery which interrupted, or chopped up, the continuous high-frequency energy into a series of impulses at audio-frequency. The continuous wave when thus interrupted at audio-frequency (technically called interrupted continuous wave or ICW) permits the emanation of radio signals at an audio-frequency from the transmitting antenna.
The chopper was in use at the beginning of the accounting period but was superseded by the heterodyne system.
6. Three systems were available for use at the beginning of the accounting period in which the audio-frequency modulation was performed in the receiving system instead of the transmitting system. They were as follows:
(a) The rotating condenser. In this system the transmitted high-frequency wave and the energy flowing in the receiving antenna were CW (continuous wave) in character. A specially designed condenser consisting of a fixed plate and an adjacent motor-driven rotating plate connected into the receiving circuit functioned to alternately tune and detune the receiving circuit once for every revolution of the rotating plates. Thus the high-frequency energy radiated by the sending station and absorbed by the receiving antenna was broken up into a series of impulses of audio-frequency current, which, when rectified by a suitable detector, caused an audible note or tone in the receiving telephone head set, which was dependent upon the speed of rotation of the rotating plates. Therefore, whenever the sending key at the transmitting station was depressed a tone or note was audible at the receiving station and the sending key could therefore be utilized to produce the Morse code.
(b) The tikker. The tikker method is somewhat similar to that which has been described as the chopper method in connection with the transmitting circuit, the tikker, however, being located and functioning in connection with the receiving circuits.
One conventional form of tikker was a rotating brass wheel having a fine steel wire making a light contact in a groove on the periphery of the wheel. The slight irregularities in the surface of the wheel caused the circuit to open and close at more or less irregular intervals. When the circuit was open a condenser in the receiving circuit became charged and when the circuit was closed the condenser discharged. These irregular discharges passed through the telephone head set, each one causing a click. The speed of the rotating disc was such that the clicks followed each other so closely that they resulted in a sound in the telephone head set best described as being "hissing" or "mushy" in character. The sound produced was of this character rather than that of a musical tone because of minute irregularities on the periphery of the wheel, which in turn caused the condenser to charge and discharge in an irregular manner.
(c) The tone wheel. In the method of tone wheel reception the basic element also comprised a motor-driven rotating member. In this case the member was a rotating wheel having a relatively large number of conducting teeth or contact segments on its periphery. Each contact segment was separated from the preceding segment on the periphery by an insulating segment of exactly the same peripheral width. A stationary contact brush was mounted to press against the periphery of the wheel so that, as the same rotated, the electrical circuit thus formed was alternately opened and closed, the duration of the open period being exactly the same as the closed period.
The tone wheel was driven by an electric motor, the speed of which could be readily adjusted by means of a control knob. The rotational speed of the disc and the number of contact segments on its periphery were so selected that the interruptions produced had substantially the same frequency as the received high-frequency energy. The received continuous wave current was passed through the brush and tone wheel contacts to the head telephones. If by means of the speed-adjusting knob a speed was selected at which the frequency of interruptions by the tone wheel were exactly in step with the cycle of the high-frequency current, no sound would be heard in the telephones, the resultant interruptions of the current by the tone wheel occurring at a fixed relationship with the cycle of the incoming high-frequency and being above audio-frequency.
If, however, the speed of the tone wheel was adjusted so that it was either slightly faster or slower than the synchronous speed, the interruptions of the tone wheel either gradually overtook or lagged behind the individual cycles of the high-frequency current, thereby causing a relatively slow periodical change (at audio-frequency) in the current flowing to the telephones whenever the transmitting key was depressed. The operation of the tone wheel thus introduced an audio-frequency component into the received current, the pitch of which was dependent upon the extent to which the tone wheel is out of synchronism.
A crude mental picture of the operation of the tone wheel may be had by visualizing as the received high-frequency energy a freight train traveling at 60 miles an hour and made up of alternate box cars and flat cars of the same length. If the tone wheel be now visualized as a second similar freight train with alternate box cars and flat cars traveling on a parallel track, it will be evident that if both trains travel in the same direction of exactly 60 miles an hour there will be no relative movement and no relative effect between the two trains traveling side by side.
If, however, the speed of the second train (the tone wheel) is either increased or decreased to 61 miles per hour or 59 miles per hour, there will be a relatively slow movement of one train with respect to the other at a speed of but one mile per hour, and at this relatively low speed the box cars in the second train will either gradually overtake or lag behind the box cars of the first train, so that the box cars of the second train will slowly pass the flat cars of the first train and again come into step with the box cars of the first train.
If it be assumed that sunlight was shining across the two tracks the amount of light shining through the two trains will be a minimum when a box car is opposite a flat car and will slowly become a maximum when the box cars are in step with each other.
The tone wheel possessed the following advantages:
(1) The range of audible tone frequency was relatively narrow, so that it was possible to select the particular station whose signal it was desired to receive to the exclusion of other stations transmitting at the same time.
(2) The sound received by the telephones was in the nature of a musical tone, the pitch of which could be varied by the receiving operator by adjustment of the control knob of the driving motor. The operator was therefore able to select any desired musical note or pitch that gave to his ear a maximum audibility and which he could distinguish from other signals of different pitch or from the irregular noises produced by static.
7. The tone wheel possessed one disadvantage in common with the tikker. In each of these devices the received energy, which was minute in character, had to flow through a brush bearing on the periphery of a rotating member. The contact between the brush and the rotating member was delicate in character and could easily get out of adjustment.
A second disadvantage arising from the use of the tone wheel was that the receiving circuit was interrupted or opened one-half of the time, and therefore one-half of the received energy was lost, although this did not of necessity mean a corresponding loss in signal strength heard in the telephones.
A third disadvantage in the use of the tone wheel existed in the fact that the pitch of the audio-frequency tone was dependent upon the maintenance of an absolutely steady speed of the driving motor, and any variation in this speed would cause a change in the pitch of the tone or, if the variation were great enough, an entire loss of the signal.
8. Both of the Fessenden patents, upon which the present accounting is predicated, eventuated from the same original patent application and both patents disclose the same apparatus and construction. Patent 1,050,441 carries the claims directed to structure and patent 1,050,728 has claims directed to a method.
Both of these patents relate to the reception of signals by means of continuous high-frequency energy impressed upon the antenna at a receiving station. As stated in patent 1,050,728: "The primary object of my invention is to eliminate interference and increase the intensity of signals, by operating the indicator at the receiving station by the conjoint energy of the received electric impulses, and certain cooperating currents produced locally at the receiving station. This application furthermore contemplates the production of signals by means of harmonic beats produced between the currents of the received electric pulses and the locally produced co-operating electric pulses, the indicator being moved by the energy of the combined currents and therefore being under control, as to the frequency of motion, by the receiving operator."
One of the objects indicated by the patent specifications is the production of an audio-frequency modulation at the receiving station.
The essential feature of both patents is that there is located at the receiving station a local source of continuous high-frequency oscillations, the frequency of which is controllable by the receiving operator. When high-frequency energy is received by the receiving antenna and the receiving circuits of the receiver, the high-frequency oscillations from the local source are also impressed upon the receiving circuit, and these local oscillations are so adjusted by the receiving operator as to differ slightly from the received oscillations from the transmitting station.
These two sets of oscillations interact to produce a beat note or tone, the resultant frequency of which is the difference in frequency between the oscillations received from the distant transmitting station and the oscillations produced by the local oscillating system at the receiving station, a proper selection of the local oscillations thereby resulting in producing a tone or signal of audio-frequency.
9. In the particular embodiment selected for illustration in the patents in suit the local high-frequency oscillations are generated by a high-frequency alternator driven by an electric motor, the speed of which is controlled by means of a speed-adjusting knob or rheostat. If by this means a speed was selected at which the frequency of the local oscillations were exactly in step with the oscillations of the high-frequency current in the receiving antenna, no sound would be heard in the telephone. If, however, the speed of the local high-frequency generator was adjusted so that it was either slightly faster or slower, and the local oscillations were no longer synchronous with the received oscillations, the peaks of the local oscillations either gradually overtook or lagged behind the individual peaks of the received high-frequency current, thereby causing a relatively slow interacting periodical change (at audio-frequency) in the impulses acting upon the telephone diaphragm. A musical tone was thus produced in the telephone, the pitch of which was under the control of the receiving operator.
10. The patents are not limited to the particular embodiment referred to in the previous finding.
On pages 1 and 2 of patent 1,050,728 it is stated —
"As a frequency controlling device, it is preferred to use a high-frequency alternator, or any other suitable device for producing unintermittent oscillations, * * *.
"While a variety of forms of receiving devices may be employed, the construction shown in Fig. 3 is convenient and desirable."
In patent 1,050,441 it is suggested that a mercury lamp producing oscillations, or any other suitable source for producing unintermittent oscillations, may be used.
11. Claims 1, 2, 3, 4, 6, 9, 22, 23, 24, 25, and 29 of the structure patent 1,050,441 are valid and have been infringed by defendant during the accounting period. Claims 25 and 29 may be taken as typical and are as follows:
"25. In wireless telegraph apparatus for transmitting energy, the combination of a transmitting station having apparatus for sending practically continuous high-frequency oscillations, a receiving station, a receiver at the receiving station and a source of practically continuous high-frequency oscillations operatively connected to the said receiver, substantially as described."
"29. Electric signaling apparatus comprising a receiving station having an absorbing circuit, an indicator, a local generator of alternating current of frequency different from that of the received current, and means to operate said indicator by beats produced thereby in conjunction with the received current."
12. Claims 1, 2, 9, 10, 11, 12, and 14 of the method patent 1,050,728 are valid and have been infringed by defendant during the accounting period. Claims I and II may be taken as typical and are as follows:
"I. In the art of electric signaling, the method which consists in moving an indicator at the receiving station by the interaction of the received inpulses, forming the signal, and a series of sustained electric impulses locally produced at the receiving station and maintained with a frequency near to but not the same as the frequency of the received impulses.
"II. The method of transmitting and receiving sustained alternating signal impulses, which consists in transmitting a continuous wave train of sustained oscillations, changing the frequency of such continuous wave train to produce signals, combining with such transmitted wave train at the receiver locally generated sustained oscillations and observing the combined effects of such oscillations."
13. Some of the advantages possessed by the heterodyne system of reception as predicated upon the patents in suit are summarized as follows:
(a) A narrow range of audible tone frequency contributed to the ability to select a particular station whose signal it was desired to receive to the exclusion of other stations transmitting at the same time.
(b) The exclusion of static noises and extraneous stations transmitting near the same wave length due to the ability of the operator to select any desired musical pitch that gave to his ear a maximum audibility.
(c) The combination of the locally generated energy at the receiving station with the received signal energy produced a selective amplification of the signal, or an increase of audibility, which resulted in an increased range of reception of signals over the prior art systems with the utilization of the same amount of energy at the transmitting station.
The advantages set forth in (a) and (b) resemble the advantages present in reception by the tone wheel (see Finding 6), with the distinction that the Fessenden heterodyne system obviated the use of any delicate rotating contacts or loss of energy by a periodic interruption of the current and was more rugged and simple in character.
The term "selective amplification" as used in advantage (c) refers to an amplification effect dealing only with the desired selected or heterodyned signal in contradistinction to amplification or amplifiers used in radio reception in which the desired signal and the extraneous background noises are both amplified.
14. The practical effect resulting from the use of the Fessenden heterodyne system was the creation of a more selective, sensitive, and rugged receiver by means of which signals could be received from a transmitting station of given power over an increased distance as compared with the prior art receivers. Messages could be received under conditions of static and interference where the prior art receivers would not operate to receive intelligible signals.
The heterodyne patents in suit were basic or pioneer in character and the inventions covered therein have been of great value in the radio art.
15. During the accounting period the United States purchased, acquired, or manufactured and used wireless receiving sets and systems having circuits and devices for receiving continuous wave wireless telegraph signals by the heterodyne method of reception as covered by the patents in suit.
Substantially all reception by defendant of continuous wave wireless telegraph signals during the accounting period was by the heterodyne method.
These sets are listed in the accompanying itemized schedules.
16. Signals transmitted by a spark transmitter or interrupted continuous wave (see Finding 5) were adapted to be received either on a crystal or other nonoscillating detector, and this was normal practice when the transmitting station was sufficiently near or where there was no serious interference. If, however, the spark or interrupted continuous wave signals were of very low audibility or not audible by this normal method of reception, the selective amplification characteristic of the Fessenden heterodyne method was of advantage in increasing the signals in intensity and audibility.
The use of the heterodyne method in the reception of spark signals destroyed the natural musical tone of the spark signal and resulted in a mushy or hissing tone, which was of itself a disadvantage, but at the same time the signal intensity was increased and signals rendered audible which otherwise would not have been heard, so that the resultant effect was an advantage.
17. The defendant utilized heterodyne reception to a limited extent in connection with spark signals. The extent of such use was dependent upon the type of receiving set and is indicated in the itemized schedules which follow.
18. It was not possible in this accounting for plaintiffs to prove the specific profits made by the various manufacturers of the receiving apparatus listed in the subsequent findings, the records in many instances having been lost or destroyed before the accounting stage in this case.
19. Both prior to and during the accounting period plaintiffs refused to license others to manufacture or use apparatus under the patents in suit and refused to sell heterodyne apparatus that might go into commercial communication service, and there was no established royalty.
Plaintiffs during the period of World War I offered to manufacture for and sell the defendant wireless telegraph receivers embodying and utilizing the inventions in suit. The record does not show any purchase by defendant from plaintiffs of such receiving apparatus during the accounting period.
20. Various types of continuous wave transmitters were old and in use prior to the patents in suit.
The patents in suit disclose nothing novel and expressed no monopoly with respect to the production of or emanation of continuous waves from a transmitting station. They do not relate to either the construction or method of operation of a continuous wave transmitting station.
The patents in suit relate to and cover the heterodyne beat note method of reception and apparatus therefor, whereby a radio receiver is rendered more sensitive and can receive a signal transmitted by continuous waves over greater distances with greater selectivity and reliability as compared to prior art receivers.
Just and reasonable compensation for the use of plaintiffs' invention is based upon the receiving sets manufactured, acquired, or used by the defendant during the accounting period.
21. The majority of the government sets acquired and used during the accounting period were adapted to receive wireless telegraph signals by other than the heterodyne method. As an example, many sets were equipped not only with heterodyne devices and circuits but with a crystal detector as well.
A fair and reasonable royalty for the use of the defendant's receiving sets for utilizing the inventions of the patents in suit is a base rate of 18 percent of the cost of the sets where apparatus was used entirely for heterodyne reception and with a reduction of compensation in direct proportion to the extent of nonheterodyne use. Thus, where a receiving set was so constructed and intended for heterodyne reception 50 percent of the time, the royalty applicable to such a set would be 9 percent of its cost.
In the accompanying tables, instead of ascertaining the royalty rate and the amount for each item, the computation is simplified by allocating the percentage of cost for heterodyne use, totalling the allocated costs, and applying the base royalty rate to the total.
22. The device utilized in the government radio sets for the production of local oscillations in the receiver consisted of an audion tube or bulb having a filament connected to a supply of energy through suitable controlling means; a grid or input circuit, and a plate or output circuit. The energy input from the tuned or resonant circuits associated with the receiving antenna was applied to the grid circuit, and the telephone head receiver was connected to the output or plate circuit, the tube functioning as a detector.
In addition, an arrangement of circuits known as a feed-back circuit coupled the output circuit to the grid circuit. By adjusting the degree of coupling, the tube could be made to oscillate and its oscillations controlled so that a heterodyne beat note could be produced. The coupling device generally used was electromagnetic in character and comprised a coil, the position of which could be magnetically adjusted with reference to a portion of the input circuit. This adjustable coil which produced a feed-back excitation was termed a "tickler coil."
23. For convenience the various types of receiving apparatus are grouped in the following tabulations:
No established type number.
No established type number.
No established type number.
Certain contracts, abstracts, and other documents, plaintiffs' exhibits 100-138, inclusive, 249-272, inclusive, and 282, which are made a part of this finding by reference, comprise in general the sources of information for these tables, and the item numbers given in the first column of the tables identify the various items set forth in the contracts and abstracts.
In order to obviate the expense of photostat copies, many requested documents were made available to plaintiffs' representative, who examined them and made abstracts of their contents, and testified without objection regarding them.
24. The tabulation termed group "A" relates to receiving apparatus comprising a radio receiving set, including an audion tube and its controls built in and forming an integral portion of the set. The sets also included a tickler coil or other similar feed-back means to make the tube oscillate and to control its oscillations by adjustment under the control of the receiving operator. When the tube was oscillating, the apparatus utilized the inventions in suit for heterodyne reception of wireless signals.
Sets in this group were also provided with a crystal detector or terminals for connecting a crystal detector. With the tickler so adjusted that the tube was not oscillating, or when the crystal detector was used, the set could be used for reception of other than continuous wave signals, and when so used there was no heterodyne effect.
25. Certain of the receiving sets acquired for use by the government during the accounting period, instead of being constructed as integral sets, as exemplified by the apparatus in group "A", had the apparatus divided and placed in separate units or boxes. In general, one unit or box contained the necessary elements and circuits for tuning the receiver, this unit normally being referred to as a "tuner." The second unit normally contained an audion bulb with its necessary adjuncts and controls and was termed "audion control box."
The tabulation termed group "B" relates to tuning units. The tuning units of this group were adapted to be used either with a crystal detector or with an audion control box. The tuner units were, however, provided with a built-in tickler coil or other equivalent means for causing the audion tube in an associated audion control box to oscillate, and when thus used the set was caused to operate by the heterodyne method. The tuning unit, when used with either a crystal detector or with an associated audion control box with the audion not oscillating, did not involve the inventions in suit. As the tuners could be used either with or without the heterodyne method in accordance with the desires of the receiving operator, the tabulation for group "B" contains a percentage allocation for heterodyne use.
26. The tabulation termed group "C" is similar to that of "B" in that it relates to a separate tuner unit. These units however had no built-in tickler coil. They were primarily designed, adapted and intended for use with the crystal detector for spark reception. They were however wired and fitted with binding posts so that the audion control box of group "E" could be readily connected. By attaching an external tickler coil to binding posts marked "tickler" on the audion control boxes of group "E" or by connecting one of the internal coils of the tuner unit of group "C" by means of a feed-back circuit with an audion control box of group "E", the two units would produce a beat note and could be used for heterodyne reception.
Signal Corps Radio Communication Pamphlet numbers 3 and 4 (plaintiffs' Exhibits 255 and 256) give instructions as to the use of the sets SCR-54 and SCR-54-A for receiving by the heterodyne method.
The tabulation for group "C" contains the percentage allocated to these sets for heterodyne use.
27. The tabulation entitled group "D" comprises audion control boxes consisting of the tube mounting, battery control, and the necessary connections for the operation of the audion tube. These units were of themselves of no utility for radio reception unless they were connected to a receiver, such as one of the tuning units of group "B" or "C", and when connected to such tuning units and operated by throwing the tube into oscillation could receive by the heterodyne method.
The combined set could also be used for receiving with the audion not oscillating, in which case there was no use of the heterodyne. This combination of an audion control box and the tuning unit was intended and provided for in the design both of the tuning units of groups "B" and "C" and in the design of the audion control boxes of group "D." The tabulations contain the heterodyne factor for the estimated heterodyne use of this apparatus.
28. The apparatus contained in schedule "E" consists of audion control boxes designed, adapted, and intended to be connected to a tuner of group "C." These audion control boxes had provision in the way of tickler coil terminals for the attachment of a tickler coil or its equivalent in the way of a feed-back circuit and consequently were intended to be used when desired for heterodyne reception.
The tabulation for this group contains a percentage allocation of 20 percent applied to these sets for heterodyne use.
29. The apparatus set forth in group "F" consisted of small continuous wave oscillating transmitters adapted to produce high-frequency oscillations at a frequency under the control of the operator. Such apparatus was used with an associated receiving set for producing heterodyne action by combining the impulses of a received signal with the impulses generated by the local oscillator to produce heterodyne beat reception. The oscillators so used were called heterodyne drivers.
30. The tabulation entitled group "G" relates to apparatus designed, adapted, or intended to be used by defendant during the accounting period for radio reception by the heterodyne method, but the contracts or orders under which the listed apparatus was acquired were dated prior to February 5, 1917 (six years before the filing of the original petition in this suit).
The third column of this tabulation indicates in which of the other groups this apparatus would be classified as to structure. The items marked X in this column relate to receivers which were originally designed and adapted for use with a crystal or other similar detector.
When the oscillating audion and heterodyne reception were adopted by the Navy there were many of these receivers (X items) already in use by defendant for non-heterodyne reception. Some of these were used for heterodyne reception during the accounting period by attaching an audion control box and causing the audion bulb to oscillate. This was done in some cases by the use of an intermediate coupler including a tickler coil, and in others a circuit known as an ultra-audion circuit was used.
The record shows that all of the units set forth in this schedule were paid for, as evidenced by an inspection of various public bills and records at the Washington disbursement department at the Navy Department, Washington, D.C., and in the accounting department of the Washington Navy Yard. The record does not show the date of delivery or acquirement by the defendant of the apparatus contained in group "G."
The tabulation for group "G" also contains the percentage allocated to the various sets contained therein for heterodyne use.
31. The following tabulation gives the totals from the various schedules as indicated:
--------------------------------------------- Number Percent cost Group of units Total cost allocated to heterodyne --------------------------------------------- A ..... 3,207 $827,063.13 $415,709.85 B ..... 5,532 1,612,165.73 1,000,943.09 C ..... 11,900 751,361.02 150,272.20 D ..... 1,907 202,987.67 149,374.93 E ..... 1,351 69,930.25 13,986.05 F ..... 30 5,193.06 5,193.06 G ..... 1,063 283,121.63 185,924.23 -------- ------------ ------------ 24,990 3,751,822.49 1,921,403.41 ---------------------------------------------
32. A reasonable and entire compensation for the use of the Fessenden inventions in suit is 18 percent of the total cost allocated to the heterodyne use in the accompanying schedules, or the sum of $345,852.61, plus an amount measured by interest at 5 percent per annum, not as interest but as a part of the entire or just compensation, on $345,852.61 from the middle of the accounting period, or November 11, 1918, to date of payment of the judgment.
The sum of $345,852.61 as applied to the 24,990 receiving units represents an average royalty of 9.22 percent or $13.84 per unit.
33. Plaintiffs did not delay unreasonably in the circumstances in taking the proof in this and its companion case, No. 34664, which cases were tried together.
As set forth in the findings the government during the accounting period manufactured, or had manufactured for it, and used 24,990 wireless receiving units, or sets, embodying and utilizing the heterodyne inventions covered by certain patents issued to Reginald A. Fessenden, Nos. 1,050,441 and 1,050,728. The heterodyne inventions included in some of these wireless telegraph receiving units were not, as explained in the findings, exclusively used at all times by the government, and, for the purpose of determining the reasonable and entire compensation to which the owner of the patents is entitled measured by a reasonable royalty on the cost of the receiving units, the percentage of the total gross cost of such receiving units embodying the heterodyne inventions properly to be allocated to heterodyne use or reception, as has been reasonably established by the evidence, is set forth in the findings. The total gross cost of these receiving units embodying the heterodyne inventions was $3,751,822.49, and the percentage of this cost, shown by the evidence to be properly allocable to heterodyne use of the receiving units, is $1,921,403.41. See finding 31.
The principal sum of $689,584.64 claimed is made up of three items. Under the first item plaintiffs ask for partial compensation in the principal amount of $194,787.45 in the form of base royalty of 10 percentum of the total cost of the receiving units, per se, which embodied the heterodyne invention, the 10 percentum being reduced in proportion to the nonheterodyne use of receivers, or 4.8%, resulting in a net royalty of 5.2% of the cost of the receiving units.
Under the second item plaintiffs ask partial compensation of the principal sum of $136,374.33 in the form of a royalty of 5 percentum of the total cost of continuous wave transmitters, per se, acquired, constructed, and used by the government for sending wireless telegraph signals, such percentum being proportionately reduced to the extent that the specific transmitting apparatus had any uses not involving continuous-wave radio telegraph service.
Under the third item plaintiffs ask for partial compensation in the sum of $333,543.10 measured by a royalty of 5 per-centum of the government's capital investment in its permanent long-distance transmitting and receiving wireless telegraph communication network, in connection with which communication system it used the heterodyne inventions.
The defendant takes the position that plaintiffs' reasonable and entire compensation should be measured by a reasonable royalty on the cost of the receivers only, and that plaintiffs are not entitled to include in such compensation any amount measured by the cost of transmitters not utilizing the heterodyne invention, nor a percentage of the government's capital investment during the accounting period in its long-distance wireless communication network.
The defendant also contends that the reasonable royalty which should be allowed for use by the government of the heterodyne inventions should be 10 percentum of the cost of the receivers in groups A and F (finding 23), namely, 10 percentum of $244,605.71, or $24,460.57.
As to groups B, C, D, and E (finding 23), the defendant makes the argument that the evidence is not sufficient to show use by the defendant of the heterodyne inventions in the receiving units listed in these groups during the accounting period, or, if the inventions were used, the proper percentage of such use, and that, therefore, the claim for compensation based on these receiving units should be dismissed for lack of proof of infringement.
The question of what is a reasonable royalty under all the facts and circumstances disclosed by the record for the use by the government of the heterodyne inventions, covered by the patents in suit, is a question of fact. From a consideration of all the evidence and in view of the basic or pioneer character of the heterodyne inventions covered by these patents and their value and importance in the related art, we have determined and found that a reasonable royalty is 18 percentum of the cost of the receivers exclusively used for heterodyne reception and the same percentage of the cost shown by the evidence to be properly allocable to heterodyne use of receivers embodying the heterodyne invention, to the extent that they were used for such heterodyne reception. See findings 31 and 32. This royalty is, in our opinion, a fair and proper measure of the principal sum of reasonable and entire compensation to which the owner of the patents is entitled.
Items 2 and 3 of plaintiff's claim for compensation measured by a percentage on the cost to the defendant of wireless telegraph transmitting facilities and of the government's capital investment in its wireless telegraph communication network cannot be allowed. Transmitters, such as were used by the defendant during the accounting period, were old in the art at the time of issuance of the patents in suit and the novel and patentable features covered by the patents in suit are limited by the doctrine announced by the Supreme Court in Dowagiac Mfg. Co. v. Minnesota Moline Plow Co., 235 U.S. 641, 35 S.Ct. 221, 59 L.Ed. 398, to apparatus for and method of receiving wireless communications. During the accounting period means for radio telegraph transmission and reception were available and were used without utilizing the heterodyne invention. The evidence further shows that the tone-wheel method for reception of long-distance wireless telegraph communication could be used and was used to some extent in receiving trans-Atlantic wireless telegraph communications. It was not by any means as efficient or as satisfactory for this purpose as the inventions covered by the patents in suit, and, therein, we think lies the great merit and value of the heterodyne invention.
Other patents cited by the defendant, issued long after the patents in suit to Vreeland for an electrical circuit by which the received signal current and the locally produced oscillating current are caused to flow in a common conductive circuit, to be there rectified, and to De Forest for the three-electrode vacuum tube circuits were important contributions as subsequent steps to the radio art, but they did not supplant the Fessenden heterodyne inventions. The Vreeland circuit was of great practical value in the art and the De Forest oscillating tube simplified and improved the operation of the Fessenden heterodyne inventions through amplification and by providing a better local oscillator than had been known before. These patents have been given proper consideration in arriving at the reasonable royalty of 18 percentum to which we think, upon the whole record, the owner of the patents in suit is entitled.
Judgment will be entered in favor of the International Devices Company for $345,852.61 plus an additional amount measured by interest at 5 percentum per annum from November 11, 1918, to date of payment of the judgment herein, not as interest but as a part of the entire or just compensation. It is so ordered.
WHALEY, Chief Justice, and MADDEN, Judge, concur.
JONES and WHITAKER, Judges, took no part in the decision of this case.