Appendix — Motorola, Inc. v. Armstrong

Supreme Court brief1967

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APPENDIX ‘A.

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OPINION OF THE COURT OF APPEALS.

In THE Unrrep Srares Courr OF AppEais,

'* For the Seventh Circuit. ?

No. 14830 Szrremnen Term 1966—Janvany Session, 1967

‘Estner _ AnMstnone, ) Appeal from the

Plaintiff-Appellee, |. care States Dis-

| triet Court for the

| vs. 7 | Northern District

' Mororona, Inc, pon oe we East-

Defendant-A ppellant. 7° 7

_ February 6, 1967,

. Before Hasrinas, Chief Judge, and -Famewm and

Cummines, Circuit Judges. ee:

Cummines, Circuit Judge. This patent infringement

action concerns three frequency modulation (FM) patents

owned by the late Major Edwin Armstrong. The plaintiff }

is his widow and executrix.

The three patents involved are No. 1,941,069 (’069) —

covering the wideband FM system, No. 1,941,066 (066)

covering the synchronous heterodyne method for FM

reception, and reissue patent No. 21,660 (°660) covering

& preemphasis and deemphasis system for use in FM. The

.@

9069 and ’066 patents issued on December 26, 1933, and

reissue patent ’066 issued on December 17, 1940. ;

-. Inanexhaustive opinion, District Judge Robson held that:

the three patents were valid and infringed by Motorola,

- Ine.’s FM receivers. He also held that Motorola’s FM

~ communication equipment infringed the ’069 and ’066°

patents. For a complete description of the ‘history of this

litigation, reference is made to the District Court’s exten-

. give findings reported in 230 F. Supp. 337 (N. D. Ill. 1964).

The same patents were involved in Armstrong v. Emerson

Radio and Phonograph Corp., 179 F. Supp. 95 (S. D. N. Y.

1959), where, in a very thorough opinion, Judge Palmieri

also held them valid and infringed.

_ » + Jn the'present. case, with the consent of the parties, the

_ District Judge. appointed George R. Town, Dean of the

College of Engineering at Iowa State University, to act as

his impartial technical expert. Dean Town filed a report

on the technical issues in the case and excerpts from his

report were later received in evidence. —

To avoid an unnecessarily voluminous opinion, the facts

of the present cage will be discussed in conjunction with

the contested issues. Bécause of their ready accessibility, -

the 339 ‘findings below (230 F. Supp. at pp. er will:

only be highlighted here.

Rpesedt:

Motorola first claims that by December 1948, when notices -

of infringement were sent to Motorola and others, Arm-

strong was. estopped from suing Motorola on these three

patents. Based on 36 findings of fact, most of them care-

fully ‘annotated by references to the trial record and the

exhibits, the District Court rejected this defense. Unless

clearly erroneous, those findings are binding on appeal.

Armour & Co. v. Wilson & Co., 274 F. 2d 143, 149, 156 (7th

Cir, 1960). In our view, the findings bearing on the estoppel

defense are not, clearly erroneous. Based on those findings,

the District Court properly rejected the estoppel defense.

The related defense of laches, rejected below, was not re-

newed in this Court. age ,

In 1940, Motorola decided to manufacture and sell FM

apparatus for police and mobile communication. In the

same year, Motorola decided to add FM broadcast re-

ceivers to its line of home receivers. At the time Motorola.

} entered the FM market, Major Armstrong was acknowl-’

edged as the inventor of the wideband FM. system.

_. Motorola’s predecessors as FM apparatus manufacturers

had taken licenses under Major Armstrong’s FM patents.

Upon Motorola’s inquiry in April 1940, Major Armstrong

sent appropriate patent license forms to Motorela. He

‘advised Motorola that his ’069 patent covered the FM

system, that his 066 patent was important in the receiver

' field, and that he owned other patents useful in the FM

system. Motorola knew that Major Armstrong expected .

to receive royalties on a uniform basis from all manufac-

turers of wideband FM apparatus and that he was actively

engaged in establishing a uniform licensing system.

Early in 1941, Motorola commenced license negotiations

wy with Armstrong. In May 1941, a Motorola representative

| ' * stated to Radio Corporation of America (RCA), which

} had not taken a license under thie Armstrong patents, that

; oe Motorola might take a*license thereunder if Armstrong

would reduce his royalty rate from 24% and 3% to 1%.

The license negotiations between Armstrong and

Motorola terminated in August 1941, when Major Arm-

strong advised Motorola’s counsel that he was designat-

1. Major Armstrong’s early FM licensees included General

Electrie Company, Zenith Radio Corporation, Scott Radio -Labo-

ratories, Inc., Stromberg-Carlson Company, Stewart-Warner Cor-

poraton, Radio Engineering Laboratories, and F. M. Link. |

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-ing dela lawyer, Alfred McCormack, to. cuties further

negotiations with Motorola for a license ‘under Armstrong’s‘

patents, Instead of pursuing those negotiations, Motorola,

on advice of its patent counsel, decided late in 1941 that

' . it was not infringing Armstrong’s patents and therefore

would not take a license from him. In a May 1946 letter to

American Telephone & Telegraph Co., Motorola reiterated

that it was not infringing the. Armstrong FM patents.

In March and April 1941, Armstrong advised the Secre-

taries of War and of the Navy respectively that ‘‘so long

as the present national and international emergency shall

exist’’, he would waive all royalties under his FM -patents

- with respect to FM apparatus manufactured for the United;

' States for military purposes. This waiver was a matter.

of public knowledge. Throughout World War II, Majer

Armstrong was primarily engaged in research work for

the Armed Forces, as was well known.

During World War II,.Motorola and other i manu-

facturers ceased the production of home receivers and other

equipment for broadcast purposes. However, from .1941

through 1945, Motorola did sell FM equipment for: ‘police ©

‘ communication under War Production Board releases. It

sold no television receivers until 1947. :

~In. January 1946, Western Electric Company took an

Armstrong license: for FM mobile communication appara- ~

tus. Until 1950, Western Electric paid royalties to Arm-

strong with respect to such apparatus, including substantial

quantities that Western Electric purchased from Motorola.

In June 1946, Motorola ’s patent counsel protested Western.

Ellectric’s. payment of Armstrong royalties on Motorola’s

apparatus, stating that ‘‘over the past six years * * * it has -

been and still.is our considered opinion that Motorola’s FM

equipment does not infringe any valid Armstrong patent.

On this basis, Galvin [Manufacturing Company, predeces-

- ° ‘ - 7 : : “ see sence ia -

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. sor to Motorola] has not taken a license from Major Arm- —

' strong.’’ oy AME ee ee

-- World War II ended on September 2, 1945, but the

official cessation of hostilities did not occur until December

31, 1946 (50 App. USCA, p. XXII). By the end of 1947,

the post-war market for FM receivers and television re-

ceivers reached significant proportions. At that time,

Motorola entered the-market and sold substantial quan-

'. tities of such receivers in competition with Armstrong

licensees.* Motorola’s .other competitors ‘included RCA,

Philco Corporation, Emerson Radio and Phonograph Cor-

- poration, and Admiral Corporation. These four manv-

facturers had not’ been licensed by, Major Armstrong either.

In July 1948, a few months after the resurgence in sales

o of FM apparatus, Major Armstrong filed suit against RCA

wey rer for infringement of the ’066, 069 and reissue ’660 patents.

| Six months thereafter, Major Armstrong sent a written

1 notice of infringement to Motorola and other alleged in-”

fringers of his FM patents, pen tae.

In January 1949, RCA informed its licensees, including

Motorola, that RCA would complete the Armstrong-RCA

litigation before any other contemplated patent infringe-

ment suits could be started and completed by Armstrong.

- From 1953 to 1957, because of unfavorable market con-

ditions, Motorola discontinued the manufacture and sale

_ of FM broadcast receivers, The present complaint against

' Motorola was filed in January 1954, The Armstrong suit"

against RCA was settled for $1,040,000 in December 1954.’

Armstrong’s complaint against. Emerson was filed in De-

cember 1953, and a judgment against Emerson was entered

in September 1959. See 179 F.Supp.95.

The District Court found that Motorola’s refusal to take

2. These Armstrong licensees included Westinghouse Electric

Corporation, Hallicrafters Company, and the major companies

- listed in note 1, supra. o

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a license from Major Armstrong was based on its opinion ©

that it was not infringing his patents and was not in re-

_ liance upon any acquiescence by Major Armstrong. In-

stead, he openly maintained that. all manufacturers of

wideband FM apparatus should be licensed by him. There-

fore, there. was no basis for Motorola’s claim of estoppel..

Our study of the record shows that. the District Court’s

- findings may not be disturbed because they not only satisfy

the ‘‘clearly erroneous’”’ rule but are supported by sub-

stantial evidence.

While actively engaged in war work, Major prio

was justified in not suing any inftingers. During the

period of World War II, ‘‘all reasonable postponement

- and suspension of litigation was a public duty’’ (Alliance

' Securities Co. v. De Vilbiss Mfg. Co., 41 F. 2d 668, 669-670

(6th Cir. 1930); Harries v. Air King Products Co., 87 F.

Supp. 572, 588-589 (E. D. N. Y: 1949), affirmed, 183-F. 2d

158, 159 (2nd Cir. 1950)). Moreover, Armstrong’s 1948

suit against RCA justified Armstrong’s refraining from

suing Motorola.simulaneously. As stated in Montgomery

Ward & Co. v. Clair, 123 F, 2d 878, 883 (8th Cir. 1941) :

' An inventor is not required to litigate the validity

of his patent against every possible infringer. A suit .

pending to sustain the validity of a patent is notice to

all infringers of the insistence of the patentee upon

his claimed rights.

J ny Learned Hand enunciated this same proposition in

(Clair v. Kastar, Inc., 148 F’. 2d 644, 646 (2nd Cir. 1945), ©

certiorari denied, 326 U. S. 762, where he also pointed out

that the ‘‘infringer’’ should have brought an action for a —

declaratory judgment. Here too Major Armstrong’s and

: his lawyer’s 1941 correspondence with Motorola was suffici-

ently threatening to give Motorola standing to seek a judg-

ment of non-infringement. Cf. Sticker Industrial Supply

Corp. v. Blaw-Knox Co., 367 F. 2d 744 wy gi 1966).

. Ta .

In Lebold v. Inland Steel Co., 125 F. 2d 369, 375 (7th

Cir. 1941), certiorari denied, 316.U. 8. 675, Judge Lindley

thoroughly explored the estoppel doctrine. As noted there,

. “‘Estoppel arises only when one has so acted as to mis--

' _ lead another and the one thus: misled has relied on the.

ee " action of the inducing party to his prejudice.’? Here Major -

Armstrong never abandoned his position that Motorola and

other companies not licensed under his FM patents were

-infringers. Also, Motorola did not rely upon any inaction

of Major Armstrong but instead decided in late 1941 that .

it was not infringing his patents and therefore would not

take a license. Accordingly, the defense of estoppel must

fail: None of the estoppel cases upon which Motorola re-

' . lies departs from the principles enunciated in the Lebold

case. Since they are all distinguishable on their’ facts,

they are of no avail to Motorola. SOS

Validity of the Three Patents

Motorola contends that the three patents in question

are invalid. ‘Its first ¢laim is that the °069. patent is

invalid as indefinite. A similar argument. was rejected

in Armstrong v. Emerson Radio and Phonograph Corp.,

_ 179 F. Supp. 95, 128 (S. D. N. Y. 1959) and was also re-

jected in the District Court here. Motorola asserts that the

claims of ’069 are indefinite because ‘‘lacking a numerical

value for the bandwidth.’’ The claims provide that the

frequency swing of the transmitter shall be ‘‘substantially

greater in extent than the frequency range of good audi-

bility”, and that the receiver shall be fully responsive to

such swings but substantially nonresponsive to lesser fre-

quency variations caused by disturbances. In other words,

the claims of the ’069 patent called for operation in a band-

width several times greater than the conventional and

optimum bandwidth known in the prior art.

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_ Until Major Armstrong’s discovery, the court’s expert, —

Dean Town, stated that to reduce noise, the bandwidth of

circuits was decreased. Major Armstrong first discovered

- that noise reduction could be effected by a wide-band circuit

_ system, and this was the teaching of the ’069 patent. Since

the ) Awo claims of the. ’069 patent distinctly point out and

distinctly claim the art of eliminating or suppressing noise

in radio by the wide-band system, it was unnecessary to.

-specify any particular variation in cg See 35 USC

§ 112.

Armstrong is entitled to patent iiahitsbla on all band*

_ widths at which his discovery will work well. . To restrict .

’ him to only one precise width would bétq destroy the value

- of his patent, since anyone who wanted té evade it could do

- go simply by manufacturing receivers that operate at any.

- other bandwidth.

Motorola contends that the ’069 patent was ‘anticipated

by Armstrong’s prior art patent No. 1,941,447, under which

. Motorola" was purportedly licensed by RCA and others.

However, the uncontroverted testimony shows that the ’447

patent taught that to reduce noise, the bandwidth is made

a8 narrow as possible. A receiver built under the °447

patent could not operate over a bandwidth several times

_ the amplitude modulation (AM) bandwidth. Since the ’447

patent did not disclose the wideband F'M system, it did not

anticipate the "069 patent and is of no support to Motorola.

Motorola next assails the validity of the ’066 patent

covering the synchronous heterodyne method for frequency

modulation reception. This patent involved heterodyning or

combining th ‘received PM wave with itself to reproduce

the signal. the validity of:this patent was upheld in

Armstrong/v. .. Emerson Radio and. clea a Corp., 179

‘men a ¥ age at the trial” Motorola did not —— the fact

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that Major Armstrong had actually so used it. Armstrong’s..-

amendment to his ’066 application disclosed that the ’066

circuit had been working in reception across the continent

' for some time; this too was undisputed by Motorola in the |

, District Court. It is immaterial that patent ’066 did not a

| disclose the particular receiver embodying his synchronous:

A eR tree nn

heterodyne method that later achieved commercial success,

for the validity of a, patent is not impaired by the fact that.

experimentation or the exercise of judgment is necessary to

. obtain the particular results desired. Hiidreth v. Mastoras,

257 U. S.. 27, 34; Binks Manufacturing Co. v. Ransburg

Electro-Coating Corp., 281 F. 2d 252, 256-257. (7th Cir.

" 1960), certiorari dismissed, 366 U. S. 211.

Motorola also relies on ‘prior references as disclosing the

synchronous heterodyne method for FM reception. We

agree with Judge Palmieri in the Emerson case and, with

Judge Robson here that Horton patent No. 1,856,707

- (issued May 3, 1932) did not disclose the synchronous

heterodyne method for FM reception and did not anticipate

the.’066 patent. Also, it should be noted that the Board of

Appeals of the Patent Office held that Armstrong was the

prior inventor of the ’066 synchronous heterodyne method

for FM reception and was entitled as against RCA to the

instant claims commensurate with the full scope thereof.

In that interference, proceeding, Crosby had disclosed a

circuit that was essentially the same as Armstrong’s and ~»

had also disclosed another circuit that ws essentially the

same as the Foster-Seeley circuit employed by Motorola. In -

deciding the interference in favor of Armstrong, the Board

_ of Appeals held that the two forms of circuit were equiva-|

lent. Since Motorola’s ‘ratio detector and Bona circuit are:

_ essentially the same as the Foster-Seeley circuit, Motorola’s

use of the Foster-Seeley circuit, the ratio detector and the

Bond circuit is within the broad range of: equivalents to

whieh the pioneer’ 066 patent was entitled. Hildreth v. ; |

acsiaclanl gid U..8. 27, 36.

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Motorola contends that the 1066 bout is. invalid for

\ overclaiming, on the ground that the District Court. con-

. 8trued the claims to cover an entire receiver. Actually, the

\ court only construed the claims to cover this synchronous

\ terodyne system for the detector circuit of an FM re-

iver, so that. Motorola’s contention must be rejected.

Motorola urges that the reissue ‘patent 660 is invalid on

the ground that it claims an invention which was not

ed or defined in the original patent. It should be noted °

thatthe Board of Interference Examiners found that Arm-

. strong’s proofs were persuasive that he had first used the

- preemphasis and deemphasis system disclosed in the origi-

nal patent as early as 1936. In this reissue patent, the

receiver claims cover the structure and operation of a

wideband FM receiver with deemphasis circuits and a wide

_ admittance band. The only change iti the specification of

. the reissue patent as comparéd with the original patent

No. 2,215,284 was to substitute ‘‘improvement in both the

fidelity and signal to noise ratio’’ for ‘‘increase in both the ie “a

fidelity and noise level.’’ As found by the District Court,”

the only significant difference between claims: 1, 2 and 3 of

the reissue patent, as compared with claims 4, 5, and 6 whiclf

appear in the reissue patent but not in the original patent,

is that claims 1, 2 and 3 cover the transmitter and receiver

' in combination, or a method of transmitting and receiving,

whereas claims 4, 5 and 6 cover a receiver, or a method of .

reception for receiving an FM wave pre-distorted as: pro-

vided in claims 1, 2 and 3. Therefore, the reissue patent

does not claim a completely different invention” but satis-

- fies: the terms of the then reissue statute (35 USC, former

Sectiorf 64) providing that a patent for the same invention

may be reissued to the patentee in certain circumstances.

8. po réissue of defective patents is now r governed by 35 USC

51, but the parties agree that both this prpvision and former

64 Tas aighal that the reissue be confined to the invention

| ledosed in the original patent

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Here the receiver claims specify that the receiver be

adapted for reception of a preemphasized wave, but such |

wave would’be produced only by a transmitter operated as

disclosed: in the original. patent. Ydths

Motorola also relies on a J uly 1939 article by Messrs. .

Fyler and Worcester, but their publication only respected |

such information as had been derived by their employer,

the General Electric Company, from Major Armstrong. In |

addition, the Fyler and Worcester article was not. published

more than a year before the original application for patent

No. 2,215,284, and it may not be used to invalidate under 35

USC 102(b) the reissue patent resulting from the reissue _

application of October 21, 1940. Union Asbestos & Rubber

_ Company v. Paltier Corporation, 298 F. 2d 48, 51 (7th Cir,

1962), certiorari denied, 369 U..S. 865. °

Infringement.

_ The District Court concluded that all three patents in

. question were infringed by Motorola. Judge Palmieri

reached the same conclusion as to Emerson (179 F. Supp. at

pp. 128-129). We agree with the conclusion that Motorola

did infringe these patents. : |

The bandwidth of the circuits of the Motorola FM broad-

cast television sound and communication receivers ‘are

_ adapted to operate in an FM system with a deviation ratio -

of five or more for the audible signals to be transmitted and _

Teproduced. These are all wideband FM receivers, the’

bandwidth being about five times that required in conven-

tional radio signaling. Since such increased bandwidth is

in accord with the ’069 claims, Motorola clearly infringed

the ’069 patent. ve & tvesge: sss

In comprehensive findings, supported by references to

the record and exhibits, the District Court pointed out how

Motorola television sound receivers TS-4 and TS-5 are

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_ especially adapted for use in the Armstrong wideband FM .

system and have no practical use except to receive FM

waves sent out by television sound transmitters. The effec-

. tive bandwidth of each of these receivers is at least 50 kilo-

cycles. We concur in ‘those findings and the a con-

clusion of infringement. —. :

In equally careful findings, the District Court. = shown

how Motorola’s FM broadcast receivers HS87 and-HS89

are capable of receiving FM waves sent out by FM broad-

_ east transmitters, and that each of such receivers has an

-effective bandwidth of at least 150 kilocycles. Since these

receivers were also especially adapted for use in the Arm- -

strong wideband FM system and have no other practical

use, the District Court correctly concluded that they also.

violated patent 7069.

_As to the Motorola. 25-50 Me and 152-162 Me ¥M com-

munication equipment, the District Court noted that their

effective bandwidth was at least 30 kilocycles. Since they

too were found to be an application of Armstrong’s wide-

band FM system, the District Court properly concluded

. that they infringed patent ’069 covering the wideband FM

_ system. As to both the ’069 and ’066 patents, it is signifi-

’ cant that the Western Electric Company paid royalties to

Armstrong from 1946 to 1950 with respect to Motorola two-

way FM mobile communication equipment purchased from

Motorola and sold by Western Electric. Being a two-way

system, this equipment clearly infringed the system. claims

. of the two patents.

With’ respect. to: all the foregoing spintiten, Motorola

employed a radio frequency bandwidth ten times. the ©

| range of audible. frequencies carried by the band. This

was the same range used in Major. Armstrong’s example —

in his 069 patent and eee anemed Motorola’s )

infringement. |

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_Motorola argues that the claims of patent ’069 involve

a method of transmitting and_-reeeiving*FM waves, so

that Motorola could not have infringed ’069 except in its

two-way police communication system. In this connection,

Motorola argues that listening with its receivers to a

licensed Armstrong station puts Motorola’s . receivers

within the licensed combination (i.e., transmitter and

receiver). But if the listening is unauthorized, then the

use of the Motorola receivers infringes the combination

patent. Here Armstrong’s transmitter licenses granted

no license for reception (except for monitoring by the

licensee). Therefore it follows, even in accordance with

. the understanding of Motorola’s briefs, that Motorola’s

testing ‘of its receivers by unlicensed listening to the. FM

broadcasts constituted direct infringement. Motorola -

argues that its receivers could not violate the Armstrong

system patents on transmitters and receivers. If this

argunient had merit, Armstrong would not have succeeded

in garnering so many prominent and patent-conscious

manufacturers as receiver-licensees ! Section 271(a) of the

Patent Act (35 USC § 271(a)) provides that ‘‘whoever

without authority * * * uses any patented invention’’

is an infringer. Here Motorola’ tested ‘its receivers by

tuning them to transmitters employing the Armstrong

FM teachings. This constituted a ‘‘use’’ of the system

patent. because the radio waves generated by the Arm-

strong transmitters were received and converted into | |

sound by the Motorola receivers. Motorola concedes that

an unlicensed owner-user of an FM transmitter and re-

ceiver would violate the. Armstrong system patents (apart

from questions about their: validity and applicability).

Section 271(a) of the Patent Act does not require owner-

ship of the system before infringement can occur. The

test under the Act is whether there has been use of the

system. As shown, such use occurred when Motorola |

* tested these receivers.

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As seen, Motorola became a direct infringer by testing

- jits receivers commercially by tuning them to FM broad-

east signals and listening to them. ‘Cf. Radio Corporation .

‘of America v. Andrea, 90 F.2d 612, 614 (2nd Cir. 1937).

Motorola also became’ a contributory infringer by selling

its receivers to unlicensed listeners of ,FM broadcasts,

for whoever sells a component of a patented system,

knowing that it is especially made for use in infringement

of the patent and not. for ‘other use, is liable as a con-

tributory infringer. Aro Manufacturing Co., Inc. v. Con-

_ vertible Top Replacement Co., Inc., 377 U. S. 476, 482-493 ;

35 USC § 271(c).:

Motorola attempts to assert that. it aid not have the

requisite knowledge that is an element of contributory

infringement, but the record belies this. In 1940, Motorola

knew that Armstrong expected to receive royalties on a

uniform basis from all manufacturers of FM apparatus.

Armstrong had even sent Motorola: his form of license

for home receivers.. Armstrong’s patents were of such

importance that they were the talk of the industry, and

Motorola knew that receivers like its own were licensed.

‘by Armstrong. Thus 35 USC §271(c) is satisfied. In

addition, Armstrong’s two notices of infringement (dis-

cussed infra under Notice of Infringement) satisfied the

contributory infringement knowledge requirement.

- As to the ’066 synchronous heterodyne method patent,

the District Court found that certain Motorola receivers

. ineluded a balanced detector circuit known as the Foster-

- Seeley discriminator, that other Motorola Teceivers em-

ployed a balanced detector known as the ratio detector, -

and that still other Motorola receivers employed a bal-

anced detector cireuit known as the Bond circuit. Motor-

ola claims that the ’066 patent could not support claims

that covered use: of circuits such as. the Foster-Becley"

distelminati, the detector ratio, and the Bond circuit.

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iin. ‘such an argument was rejected by, the Board

of Appeals of the Patent Office during the proceeding i

involving claims 8, 9°and 10 of the ’066 patent in an

interference with Crosby patent 2,229,640 owned .by RCA.

The District Court was of ‘course entitled to consider

this interference decision and to give it appropriate

weight. Radio Corporation of America v. Radio Engineer-

ing Laboratories, Inc., 293 U.S. 1, 7. Since the synchronous

heterodyne method has been embodied by Motorola in all

of its FM receivers, the conclusion that seen 066 had

been infringed was proper.

With respect to. reissue patent 660 covering a pre-

emphasis and deemphasis system for use in FM broad-

casting and television sound broadcasting, the District

Court found that Motorola’s HS87 and HS89 FM broad-

cast ‘receivers and its TS-4 and TS-5 television sound

receivers were designed for use in a system having an

amount.or degree of preemphasis and deemphasis dis-

‘closed in the reissue patent. ‘Therefore, the District

Court correctly concluded that Motorola had infringed

claims 1, 2, 4 and 6 of reissue patent ’660. As to the

receiver claims (4 and 6) of reissue patent °660, Motorola

has argued only that invalid claims cannot be infringed.

Thus Motorola concedes infringement of such claims if,

as we have already held, the claims were valid. ‘For the’

. reasons given above with respect to direct and contribu-

tory infringement of patent ’069, as to reissue patent .

’660, Motorola was.a direct and contributory infringer

under thé system claims 1 and 2 (transmitter and re-

_ ceiver) and a direct infringer under receiver claims 4

and 6.

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' Patent Misuse.

Motorola argues that Armstrong’s receiver licenses

constituted a misuse barring any recovery on receivers.

_ This argument was rejected below and in the Emerson

case (179° F. Supp. at p. 128). Motorola advances two

separate grounds to support its. misuse argument. One

ground is that Armstrong’s licensing of receiver manu-

facturers under the system patents attempted to extend

the patent monopoly to an unpatented article, namely,

the. receiver. We reject this ground because we. have

' already held that Motorola’s unlicensed: use of receivers

does infringe the system claims.

‘Motorola’s other ground to. support its lew of .

- thisuse is that'it was unlawful for Armstrong to. restrict

the classes of consumers to ‘whom manufacturer-licensees

could sell: - Motorola has stated no authority for the ©

proposition that unlawful license restrictions protect .a

non-licensee (such as Motorola) from infringement lia-

bility. However, under General Talking Pictures v. West-

ern Electric Co., 304 U. 8S. 175, 305 U. S. 124, the license

restrictions were lawful. There it was determined that:

‘the patentee may grant a license ‘upon any con-

dition the performance of which is reasonably within.

the reward which the patentee by the grant of the -

patent is entitled to secure.’ The restriction here

imposed i is of that character. The practice of grant-

ing -licenses for a restricted use is an old one, see

Rubber Company v. Goodyear, 9 Wall. 788, 799, 800;

Gamewell Fire-Alarm Telegraph Co. v. Brooklyn, 14

F. 255. So far as appears, its legality has never

been questioned.’’ (305 U. S. at p. 127.)

There the Court noted that the parties had even stipulated :

that it was a common ae to grant such licenses |

(idem).

_. Motorola’s analysis of later cases has not coneinesd ,

17a

us that thé General Talking Pictures case is no longer

good law. In any event, it was certainly good law at the

time that Armstrong was granting the licenses assailed

by Motorola. Armstrong was certainly not guilty of any

unclean hands by relying upon the then patent law in

_ formulating its licenses. The licenses in that case were

of greater anti-competitive effect than those here. Also

the accused infringer,.The American Transformer Com-

pany, was a licensee and surely in a better position to

defend against a charge of infringement than a non-

licensee such as Motorola. ‘The principal authority ad-

vanced by Motorola is United States v. Univis Lens Co.,.

316 U. 8. 241, but that was a Sherman Act case in which

the patentee had been using his patent to achieve resale

price maintenance and therefore the case is not in point.‘

Notice of Infringement. }

The District Court found that Armstrong’s letters of

December 15 and 20, 1948, constituted notice of infringe-

ment.’ Judge Palmieri reached the same- conclusion with

' respect to the December 20 letter in the Emerson suit

( 179 F. Supp. at p. 99).

The letter of December 20 notified Motorola that it

was infringing °066, ’069 and reissue patent ’660 ‘by

practicing methods, and by making, using and selling —

apparatus, embodying inventions claimed in said patents

‘ 4. “Motorola’s reply brief relies on Chicago. Metallic Manufac-. |

turing Co. v. Edward Katzinger Co., 1389 F. 2d 291, 293 (7th Cir.

Pt affirmed, 329 U. §. 394, but there, as in Univis Lens Co., the

licenses in Philad Co. v. Lechler oratories, Inc., 107 F. 2d 747

(2nd Cir. 1939). Also, this Court did not pass upon the validity

of the Katzinger patents. ptr :

5.’ The question whether Motorola received constructive notice

Prior to December 20, 1948, by reason of patent marking on

‘apparatus sold by Armstrong’s licensees was reserved for ear-

ing at the accounting and for determination by the District Court

ieveatter (230 F. Supp. at p. 380), That question is not reached

ere, , ai ’

- 18a

and each of them.’’ This letter enclosed a longer letter

or. statement dated December 15, 1948, concerning the

. three patents. The four-page December 15 statement of

Major Armstrong explained that the transmitter and

receiver covered by patent °069 were complementary, »

and that no FM receiver manufacturer could determine

_. whether its receiver worked without utilizing a trans- .

mitter and receiver, working together, according to the

method and teachings of ’069. This letter predicted that

the courts would protect Armstrong’ s invention from |

dircet infringement or contributory infringement and

stated his intention to enforce his three patents ‘‘against

infringing manufacturers.’

_ The applicable statute (35 USC § 287) merely requires —

‘‘proof that -the ‘infringer was notified of the infringe-'

ment and continued to infringe thereafter.’’ The present

notice of infringement is sufficient under the statute.

Smith v. Dental Products Co., 140 F. 2d 140, 151-152 (7th

Cir. 1944), certiorari denied, 322 U. S, 743. There we held

that the notice provision of-the statute (then 35 USC |

§ 49) was satisfied if the infringer were given the same

information as the statute requires: for patent marking.

The marking need only contain the word ‘‘patent’’ (or

‘‘nat.’?) and the number of the patent (35 USC § 287),

and the December 20. letter of course contained this ©

information. Cf. Dunlap v. Schofield, 152 U. 8. 244, 247-248.

Since these two letters show ‘‘that the alleged contribu-

tory infringer knew [from the letters] that the com-

ne bination for which his component was especially designed

was both patented and infringing’’ (Aro Manufacturing

Co. v. Convertible Top Replacement ®v., 377 U. S. 476, —

_ +488), Motorola also cannot properly assert that it was

- not. given any’ notice as to contributory infringement.

“We have’ examined the other contentions raised by

Motorola and find them without merit. Therefore, the .

- judgment of the District Court is affirmed.

amas Bets (19a

Unrrep States Court or APPEALS

For the Seventh Circuit

Chicago, Illinois. 60604: |

| “ “Monday, February 6; 1967,

Before | :

Hon: John §. Hastings, Chief J udge; |

‘Hon. Thomas BE. Fairchild, Circuit J udge; . .

Hon. Walter J. Cummings, Jr., Circuit Judge.

¢

’ EstHer Marion ARMSTRONG, )

Executrix, Appeal from the United

Plaintif-Appellee; | States District Court for

~ No. 14830 vs. _ the Northern District: of

' Mororoxa, Inc., | Illinois, Eastern Division. . -

Defendant-Appellant. |

This cause came on to be heard on the transcript of the

record from the United States District Court for the North.

ern District of Illinois, Eastern Division, and was argued |

by counsel. : cae

On consideration whereof, it is ordered and adjudged by .- -

this court that the judgment of the said District Court in

_ this cause appealed from be, and the same is hereby, Af-

‘firmed, with costs, in accordance with the opinion of this

Court filed this day. aS ie

“wt

20a

APPENDIX B.

Esther Marion ARMSTRONG, Executrix,

° : Plaintiff, : :

. Vv.

. MOTOROLA, INC., Defendant.

No. 54.C 19.

United States District Court

_N. D. IMnois, E. D.

May 14, 1964.

. . * . .

CONCLUSIONS OF LAW AND MEMORANDUM. .

_ OF DISTRICT COURT. ©

CoNnCLUSIONS OF Law.

4 This Court has jurisdiction over the parties and the

subject matter. 28-U. S. C. §§ 1331, 1338.

_ 2. The Executrix was properly substituted as plaintiff

as a result of orders by. this Court; dated March 28, 1955,

‘and April 12, 1955. Pierce v. Allen B. DuMont Labora-

tories, Inc., 297 F. 2d 323-(3rd Cir. 1961); Armstrong v.

Allen B. DuMont Laboratories, 137 F. Supp. 659 .(D. Del.

-.1955);. Armstrong v. Emerson Radio and Phonograph

Corp., 132 F. Supp. 176 (S._D. N. Y. 1955), followel by |

that Court in its later decision reported at 179 F. Supp. 95. —

8: The °069 patent is valid and Motorola has infringed

claims 1 aad ‘2.thereof i the manufacture and sale of isin

° | 21a ,

broadcast receivers, television sound receivers and FM

communication apparatus. For liberality of construetion

and broad protection to be accérded to patents: on inven-

tions of great merit and broad scope, see Rubber Company

v. Goodyear, 9 Wall. 788, 76 U. S. 788, 19 L. Ed. 566 (1869) ; |

Leeds & Catlin Co. v. Victor Talking Mach. Co., 213 U. 8.

301, 29 S. Ct. 495, 53 L: Ed. 805 (1909) ; Eibel Process Co.

v. Mummesota & Ontario Paper Co., 261 U. 8. 45, 43 S. Ct.

$22, 67 L. Hd, 528 (1923); Wright Co. v. Herring-Curtiss

_ Co., 177 F. 257 (C. C. 1910), aff’d final hearing, 204 F.

597, aff’d 211 F. 654 (2nd Cir. 1914) and companion case

Wright Co. v. Pawhan, 177 F. 261.(C. 0. 8. D. N. Y. 1910);

American Stainless Stéel Co. v. Ludlum Steel Co., 290 F.

103 (1923), and the decision on the accounting 16 F; 2d

823 (S. D. N. Y. 1926); Permutit Co. v. Wadham, 13 F. 2d

454 (6th Cir. 1926), rehearfhg denied 15 F. 2d 20; Smith.

V. Snow, 294 U. 8. 1, 55 S.Ct. 279, 79 L. Ed. 721 (1935).

For plaintiff’s right to Tecover on theory of contributory

‘infringement, see Leeds. & Catlin Co, v. Victor Talking

Mach. Co., supra; Stewart-Warner Corporation v. Le Vally, |

15 F’. Supp. 571 (N. D. Ill. 1936), affirmed Lincoln Engi-

neering Co. of Illinois v.. Stewart-Warner Corporation, 91

F. 2d 757 (7 Cir. 1937), reversed on other grounds 303

U. S. 545, 58 S. Ct. 662, 82 L. Ed. 1008; Girdler Corpora .

tion v. E. I. DuPont De Nemours & Co., 56 F.. Supp. 871 .

(D. Del. 1944), affirmed per curiam 152 F.. 2d 757 (3rd Cir.

. 1946); Detroit Lubricator Co. v. Toussaint, 57 F. Supp.

837-(N. D. Ill. E. D. 1944), Metallizing Engineering Co. v, |

Metallizing Co. of America, 62 F. Supp. 274, 276-277

(S. D. N. Y. 1945); Florence-Mayo Nuway Co.'v. Hardy,

168 F. 2d 778 (4th Cir. 1948) ; Harris v. National Machine

Works, 171 F. 2d 85 (10th Cir. 1948) ; 35 U.S. C. § 271(d)

(3) 1952. See Memorandum Opinion of this Court dated

June 14, 1961. ’ ;

4. The ’066 patent is valid and Motorola has infringed

,

a:

22a

claims 8, 9-and 10 thereof by the manufacture and sale of

FM broadcast receivers, television sound receivers and

receivers for FM communication apparatus. my

5. The Reissue patent is valid. and Motorola has in-

. fringed claims 1, 2, 4 and 6 thereof by the manufacture

and -sale of FM broadcast receivers and television sound

receivers.

6. Motorola had no license ro the Gg nts in suit by

virtue of aify license that it may have had water the bead

| patent.

[7-9]. 7. Plaintiff ’s right to recover damages ‘is not

"barred by laches. Amalgamated Dental Co. v. Lang Dental

Mfg. Co., 200 F. Supp. 814 (N. D. Ill. E. D. 1961) ; Howe v,

General Males Corporation, 167 F. Supp. 330 -(N. D. IL. |

E. D. 1958) ; ; Pierce v. International Telephone & Telegraph

Corp., 147 F.., Supp. 934 (D. N. J. 1957). Armstrong was

‘ justified in not filing suit during World War II. Alliance

Securities Co. v. De Vilbiss Mfg. Co., 41 F. 2d 668 (6th

~ ir. 1930); Mills Novelty Co. v. Monarch Tool & Mfg. Co.,

49 F. 2d'28 (6th Cir. 1931), certiorari denied 284 U. S. 662,

- 52S. Ct. 37, 76 L. Ed. 561; Harris v. Air King Products

Co., 87 F. Supp. 572, affirmed 183 F’, 2d 158 (2nd Cir. 1950).

Armstrong was justified in not filing suit against Motorola

while prosecuting an infringement suit against RCA.

Montgomery Ward € Co. v. Clair, 123 F. 2d 878 (8th Cir.

1941); Clair v. Kastar, Inc., 148 F. 2d 644 (2nd Cir. 1945) ;

Stearns-Roger Mfg. Co. v. Brown, 114 F. 939 (8th Cir.

1902); Timolat v. Franklin Boiler Works Co., 122 F. 69

(2nd Cir. 1903) ; United States Mitis Co. v. Detroit Steel &

: Spring Co., 122 F. 863 (6th Cir. 1903); Clements Mfg. Co.

v. Eureka Vacuum Cleaner Co., 70 F. 2d 701 (2nd Cir.

- 1934); Texas Co. v. Globe Oil &- ‘Refining Co., 112 F. Supp. )

455 (N. D. Ill. E. D. 1963). | ;

ae - Plaintiff i is ssi gett to an ‘accounting of the actual

Pneerere

damages sustained by plaintiff and plaintiff's predecessor,

Armstrong, as a result of the infringing manufacture and.

sale by Motorola of FM apparatus, All matters relating

to patent marking and other notice of infringement and

to the award of costs, attorneys’ fees and interest are re--

served for hearing at such accounting and for determina-

tion by this Court after such accounting shall be had’

Memorandum AccomPanyine Finpines or. Fact axp

_ Conciusions or Law. ae

In view of the extraordinary comprehensive Report,

Court’s Exhibit 1, for identification, submitted before trial

by the Expem Dean George R. Town, appointed upon .

agreement of counsel, and the very detailed findings’ cover-

ing the mass of evidence, which findings of fact and con-

clusions of law are filed herewith, a separate opinion ‘on -.

the merits would be superfluous and repetitious. Further-

more, many of the points here made were covered in the

extended opinion, of Judge Edmund L. Palmieri in Arm.

strong v. son Radio and Phonograph Corporation,

179 F. Supp. 95 (S. D. N. Y.' 1959), involving the same

patents and claims as are here in suit. This Court is also

in accord with Judge Palmieri’s decision that there was

no misuse of the ’069 patent or the other patents in suit

and that the Reissue was lawfully reissued. The Court

_ wishes, however, to record its appreciation for the expert

assistance rendered by Dean Town to the Court.

"APPENDIX 6...

STATUTORY sieadguainine rte Links

. Sections 112, 251 and anita) of the Patent Code of 1952 -*

{85 U.S. C. §§ 112, “i 271(a)) eg

i 2. Specification.

The. specification shall contain a wexittin description of;

the invention, and of the manner and process of making.

and using it, in such full, clear, concise, and exact terms as

to enable any person skilled in the art to which it pertains,

or with, which it,is. most nearly connected, to make and use.

the same, and shall set forth the. best mode contemplated

‘by the inventor of carrying out his invention. 7

Gta ‘The specification shall concludé with one or more claims

v particularly pointing out and distinctly claiming the sub-—

. ject: matter: which the applicant regards as his invention.

_ | iAm element in @ elaim’for @ combination may be éx-

pressed as a means or step for performing a specified fune-

tion without the recital of structure, inaterial, or ‘acts in

- support thereof, and sucti claim shall be construed to cover

ing structure, material, or acts ‘described im

. the specification ‘and equivalents thereof. :

| 4251. Reiseue of defective patents.

_ Whenever any patent: ‘is, through error without any de.

_ eeptive intention, deemed ‘wholly or partly inoperative or

_ invalid, by reason of a defective specification or drawing,

| ‘or by reason of the patentee claiming more or less than he

: — ee shall,

aie fee for a reissue for each of such reissued patent! | it

J

V8.

25a.

on the surrender of such patent and the payment of the fee

_ required by law, reissue the patent for the invention dis- cok

,, Closed in the original patent, and in accordance witha new =

‘and amended application, for the unexpired part: of ‘the - 1 /

term of the'original patent. ‘No.new matter shall be intro-)', ©

duced into the application for reissué. | - ttdottaters pba naiy 1! O

_The Commissioner may issue several reissued patents

for distinct and separate parts of the thing patented, upon —

demand of the applicant, and upon payment of the required

“The provisions of this title relating to applications for

patent shall be applicable to applications for reiséue Of a

. patent, except that application for reissue may be made .

~ and sworn’ to by the assignee of the entire interest if the

application does not seek to enlarge the scope of the claims

of the original patent. m ee ee ene

No reissued patent shall be. granted enlarging the: scope

of the claims of the original patent unless applied for —

within two years from the grant'bf the original patent.

‘§271. Infringement of patent,

| (a). Except as otherwise provided in this title, whoever

_ without authority makes, uses or sells any patented invep-

.tion, within the United States during the term ofthe patent

| therefor, infringes the patent. - e:

‘2 Sections'83, and 64 of the predecessor statntes to Bee.

tions 112, and 251 respectively’ (35 U. S. C. §33; B. 8,

4888; atid §64; B. 8. 4916) provide;

3.33; B.-S. 4888. Application for patent; description;

* Before any inventor or discove rer shall receive sive a patent : nt

for ‘his ‘invention ‘or discovery he ‘shall make ‘application -

_ therefor, in writing; to the Commissioner of ‘Patents ’and

—_er-discovery more than he had a right to claim as new, if

S » egal, ives, for the unexpired part of the term —

. 4a

shall. file in'the Patent Office a written description of the

same, and of the manner and process of making, construct-

| ing; compounding, and using it in such full, clear, concise,

and exact terms as to enable any. person skilled in the art

or seience to which it appertains, or with which it is most

. nearly connected, to make, construct, compound, and use

the same;,and ‘in case of a machine, he shall explain the

_.. principle thereof, and the best mode in which: he has con-

agek templated applying that principle, so as to distinguish it

_ from other. inventions ; and he shall particularly point out .

and distinctly claim the part, improvement, or combination

which he claims as his invention or discovery. . The specifi-

cation. and claim shall be signed by the inventor. No plant

patent shall be.declared invalid on the ground of noncom-

-pliance with this section if the description is made as com-

: piste as is reasonably possible. si

at 5 64; BS. 4916. "Reissue of defective patents.

: ‘Whenever any patent is. wholly or partly inoperative or

invalid, by reason of a defective or insufficient specification,

_or by reason of the patentee claiming as his own invention

the error has arisen by inadvertence, accident, or mistake,

and without any frandulent‘or deceptive intention, the com-

- ;miadioner shall; on’ the surrender of such patent and the

: aca i ag agate bag cause a patent for the

entio and in accotdanee with the corrected speci-

‘ation, to he reisened:to the patentee or to his assigns or

‘y

of the original patent. Such surrender shall take effect

_ upon the issue’ ¢f the reissued patent, but in so far as the

__ elaims of the original and reissued patents are identical,

ei orrende; shall not affect any action then pending nor ae

J eee

'

f e ne : ‘ ‘ ‘4 rahi

, r ey ‘s wi . fi

original patent shall constitute a continuation hereof and’ ”

have effect continuously. from. the. date of the original

patent. The commissioner may, in his discretion, cause Cts

several patents to be issued for distinct and separate parts = ' +

_ of the thing patented, upon demand of the applicant, and’ |

upon payment of the required fee for a reissue for each of ©.

such reissued letters patent. The specifications and claims ?

_ ‘in every such ease shall be subject to revigion and restric- _

_ tion in the same manner as original applic ions are. Every —

patent so reissued, together with the corrected specifica-

tions, shall have the same effect and operation in law, on es

_ the trial of all actions for causes thereafter arising, as if —>

‘the same had been originally filed in such corrected form; —

but no new matter shall be introduced into the specification,

nor in case of a machine patent shall the model or drawings

be amended, except each by. the other; but when there is

neither model nor drawing, amendments may be made upon

* proof satisfactory to the commissioner that such new mat-

ster or amendment was a part of the original invention, and

was omitted from the specification by inadvertence, acci-’

a4 dent,.or mistake, as aforesaid. -

. .

)

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fig sracncnbasonipecearaeb peesaxeinins ws

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: ’ A od y ereatnnanaettnere ae c x ;

~ i ; *e 5 Fate at . fy F ;

CLAIMS 1 AND 2 OF Bans NO. 1,941,069, _

“1. “Phe [method of eliminat- a bs fayetees tee climinat-

. ing ia radio signaling disturb- ing in radio signaling disturb-

saan. pried the nature of a ances i the pature of a

pater gcnny hp a gg a

cian ess Seheeetlage 'Easamttthe for producing a

sto be transmitted, su sub-

stantially greater in extent

than. the frequency range of

- good audibility, —

“'b): means at the receiver for

Sicsirongyas the ‘received cur-

for substantially _ eliminating

: the frequency Variations of the

‘received signal into amplitude

_ variations, . said wdeyee being

variations of the signal but

substantially not. responsive

y to the lesser variations in fre-

“quency of the spectrum of the

disturbances to- be eliminated

nor. to variations. in amplitude

of said disturbances. |

aE, eee ee

mae. Age SER 2G as

2 e; ed a Nee - oy “NO. 21,660, 2

cS ee ee ee ee ER ‘

La SONS a eS ix NRE OE 2 aoe BL = 5 at &

Bee ;

: e x ;

naan? Pied wangmitted variation’ in frequency of the 3

_rents,. current limiting means — :

“amplitude. ‘variations, and a+

fully responsive to ‘the wide -—

FS cee)

29a -

=

(a) which sinalite in

‘ing the high frequencies of the

band to a substantially greater

degree than the low frequen-

cies thereof, varying. the fre-

quency of the wave to be trans-

mitted by. the amplified cur-

rents to produce a wide band

of frequency variations, trans-

such wave,

(b) receiving the wave and

- amplifyifig the received cur:

. Tents, passing the amplified

currents through a detecting

_ device having an - admittance

~—band substantially wider- than:

. said ‘wide band of aden,

variations and

‘the’ detecting ‘device the fre.

a quency variations into a ‘band .

' of currents ‘of variable ampli-

ae

tude whereby distortions

_ which arise inthe translation

in the detecting | device of the

band to a substantially greater .

_ degree than. the high frequency: °

currents thereof.

aft oom for trans-

=

snodudated'isitvial:

in-such manner ‘that the ratio

of: oeeoe

to, the amplitudes: the corre-

‘signaling currents is

greater fr the higher tequet- :

eles of the

than, for the lower p Hester

WEB ce ick kaa coc

{which method] consists in re: :

ceiving the wave and amplify:

ing the received currents, pas-

_Sing “ the---amplified currents

through a’ detecting’ device

having ‘an~ admittnes: ~ band

substantially. ‘wider than the

width of the wide swing ‘of the

said wave ‘and translating in

the detecting’ device ‘the fre:

quency variations into signal-

ing currents ‘of variable ampli:

tude, whereby distortions

‘which arise ‘in’ the ‘translation

in the detécting device of the

frequency ‘variations into cur- ;

e rents of variable am

minimized, ‘and } ‘the

‘signaling currents of the lower

frequencies to ‘a substantially

greater dégree than the signal- |

oe Seer Se er hagas he

quencies. °

4 A [receiver] ‘adapted 2.

in such manner’ that the ratio —

receive a wide swing

modulated “wave

of. the deviations of the wave

_ to the ampli sof the corre-.

te hs ng currents

t} we : eal

thereof, , | emilee :

“are -

=

wave «iat gubstentially constant

. gaid

[receiver]. comprising

means for receiving -the wave

and: amplifying the received

currents, converting means

coupled. to said last-named

means for causing the frequen-

ey variations: to create. cur-

rents of variable amplitude -

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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