Sperry Rand Corporation. Univac Division

The Honeywell-Sperry Rand suit grew out of the ENIAC patent which covered basic patents relating to the design of electronic digital computers. Sperry Rand was the defendant in the case.

Computer hardware and software manufacturer.

In 1967 Honeywell, Inc., filed suit against the Sperry Rand Corporation and its subsidiary, Illinois Scientific Developments, Inc., in the U.S. District Court for the District of Minnesota to challenge the defendant's patent claims involving the basic design of the electronic digital computer. The trial opened on July 1, 1971, and lasted 135 days.

Sperry Rand's claims were based on the ENIAC, the first operating electronic digital computer, which had been developed by J. Presper Eckert and John W. Mauchly between 1942 and 1945. The ENIAC, with its 18,000 vacuum tubes, had been commissioned to produce ballistics tables for the Army's Ordnance Department, but it did not have stored memory capability.

Eckert and Mauchly formed the Eckert-Mauchly Computer Corporation in 1946 and began to develop a commercially viable computer using R & D funding from the Census Bureau. This funding proved inadequate, and the company was on the verge of bankruptcy in 1949. Eckert and Mauchly were forced to sell the company to the highest bidder, which was Remington Rand, Inc., a major manufacturer of business machines and office equipment. Remington Rand delivered the first UNIVAC computer to the Census Bureau in March 1951. Under devastating competition from the IBM 650 Computer, introduced in 1954, Remington Rand merged with the Sperry Corporation to form Sperry Rand on June 30, 1955.

The Patent Office finally granted a patent on the ENIAC to Eckert and Mauchly in 1964. Sperry Rand then began notifying all computer companies that they were violating its patent rights and offered to license its competitors for a fee of 1.5 per cent. IBM reached a $10 million settlement with Sperry Rand in 1965. Honeywell and Control Data Corporation rejected Sperry Rand's claim. Sperry Rand sued for patent violation and Honeywell countersued, asserting that the patent was fraudulent.

On October 10, 1973, Judge Earl Larson handed down his decision, upholding Honeywell on every count. He concluded that the ENIAC was derived from a primitive prototype computer developed by John V. Atanasoff and Clifford E. Berry at Iowa State University, even though it had never been fully operational. Damages were not awarded as he found the defendants innocent of willful intent to defraud.

The Sperry Corporation's Univac Division derived from the Eckert-Mauchly Computer Corporation, founded in 1946 by J. Presper Eckert and John W. Mauchly, the developers of ENIAC, the first electronic digital computer. The firm began the development of the UNIVAC, the first stored memory digital computer for commercial applications. Capital shortages forced Eckert and Mauchly to sell the firm to Remington Rand, Inc., a major manufacturer of business machines, in 1950. The first UNIVAC was delivered in March 1951. To cement its lead in computer manufacture, Remington Rand purchased the Minnesota firm of Engineering Research Associates, a computer company with ties to the defense industry, in 1952. The two acquisitions were consolidated to form the Univac Division.

Remington Rand merged with the Sperry Corporation on June 30, 1955, to form the Sperry Rand Corporation. A separate Sales and Marketing Dept. was formed in 1957, as the company attempted to consolidate these functions after the 1955 sale. Sperry Rand was renamed the Sperry Corporation in July 1979, and in 1986 it was acquired by the Burroughs Corporation in a hostile takeover. The merged company was renamed The Unisys Corporation.

On April 5, 1968, Sperry Rand filed suit against the Control Data Corporation (CDC) claiming that CDC had infringed on Sperry Rand's ENIAC, EDVAC and UNIVAC patents. Specifically, Sperry Rand claimed that CDC was required to license the magnetic drum storage technology that it was using in its computers. Sperry asserted that this technology had been developed by John Mauchly and J. Presper Eckert when they were working on the first generation of electronic digital computers at the University of Pennsylvania's Moore School of Electrical Engineering and at the Eckert-Mauchly Computer Corporation. When Sperry Rand absorbed the Eckert-Mauchly Computer Corporation in 1950 it claimed that it bought patent rights to this digital computer and magnetic storage technology.

CDC claimed that the magnetic storage technology in question had in fact been developed by Engineering Research Associates during the 1947-1952 period when ERA was working on the top-secret Project Goldberg for the U.S. Navy. Project Goldberg led to the development of the first electronic digital computer, known as the Atlas, which was delivered to the Navy in the fall of 1950. In 1952 John Coombs and Arnold Cohen of ERA were granted patent rights to magnetic drum technology. ERA itself was absorbed by Sperry Rand in 1952, but it never acquired the patents in question. In 1957 many of the former ERA group led by William Norris left Sperry Rand to organize the Control Data Corporation.

On April 15, 1975 the Federal District Court in Baltimore County, Maryland upheld the Control Data Corporation's position.

The Sperry Rand Corporation was incorporated under the laws of Delaware on June 30, 1955, as a merger of Remington Rand, Inc., and The Sperry Corporation. Sperry Rand was renamed the Sperry Corporation in July 1979. In November 1986 Sperry was merged into the Burroughs Corporation. Burroughs, the surviving corporate entity, was renamed the Unisys Corporation. The firm was a major manufacturer of office machines, electric appliances, computers, feedback control systems and aerospace components.

Remington Rand, Inc., a major producer of business machines and office systems, acquired the Eckert-Mauchly Computer Corporation in 1950. The firm had been founded in 1946 by John W. Mauchly and J. Presper Eckert, the co-inventors of the ENIAC, the world's first electronic digital computer. At the time of the merger, Eckert-Mauchly had just about completed work on the UNIVAC, the first stored memory computer to be marketed commercially. The first UNIVAC was delivered to the Census Bureau in March 1951. In 1952, Remington Rand tried to cement its lead by purchasing Engineering Research Associates of St. Paul, Minn. Eckert-Mauchly and ERA were consolidated to form the Univac Division. However, the company continued to lose market share to IBM and by the early 1960s had only 10 per cent of the computer market.

The Sperry Corporation's Univac Division derived from the Eckert-Mauchly Computer Corporation, founded in 1946 by J. Presper Eckert and John W. Mauchly, the developers of ENIAC, the first electronic digital computer. The firm began the development of the UNIVAC, the first stored memory digital computer for commercial applications. Capital shortages forced Eckert and Mauchly to sell the firm to Remington Rand, Inc., a major manufacturer of business machines, in 1950. The first UNIVAC was delivered in March 1951. To cement its lead in computer manufacture, Remington Rand purchased the Minnesota firm of Engineering Research Associates, a computer company with ties to the defense industry, in 1952. The two acquisitions were consolidated to form the Univac Division.

Remington Rand merged with the Sperry Corporation on June 30, 1955, to form the Sperry Rand Corporation. A separate Sales and Marketing Dept. was formed in 1957, as the company attempted to consolidate these functions after the 1955 sale. Sperry Rand was renamed the Sperry Corporation in July 1979, and in 1986 it was acquired by the Burroughs Corporation in a hostile takeover. The merged company was then renamed Unisys Corporation.

The Sperry Corporation's Univac Division derived from the Eckert-Mauchly Computer Corporation, founded in 1946 by J. Presper Eckert and John W. Mauchly, the developers of ENIAC, the first electronic digital computer. The firm began the development of the UNIVAC, the first stored memory digital computer for commercial applications. Capital shortages forced Eckert and Mauchly to sell the firm to Remington Rand, Inc., a major manfuacturer of business machines, in 1950. The first UNIVAC was delivered in March 1951. To cement its lead in computer manufacture, Remington Rand purchased the Minnesota firm of Engineering Research Associates, a computer company with ties to the defense industry, in 1952. The two acquisitions were consolidated to form the Univac Division.

As the first commercial computer system, UNIVAC made a dramatic impression on the American public. At the suggestion of Remington Rand, CBS Television used a UNIVAC to predict the outcome of the 1952 presidential election. This marvelous public relations stroke helped UNIVAC capture the imagination of the nation. During the early 1950s forty-six UNIVAC I models were sold. However, in 1954 IBM introduced its 650 computer, which was a great commercial and technological success, and Remington Rand saw its lead vanish almost overnight.

On June 30, 1955, Remington Rand merged with the Sperry Corporation, a manufacturer of guidance systems, servomechanisms, feedback controls and precision machinery, to form the Sperry Rand Corporation. After the merger, the company attempted to recapture the market with the UNIVAC II, which had a magnetic core memory and a storage capacity of between 2,000 and 10,000 characters. However, by the mid-50s the initiative had clearly passed to IBM, although many industry observers believed that the UNIVACs were technically superior to IBM computers. By the early 1960s IBM controlled 71 per cent of the computer market, with Sperry Rand a distant second at 10 per cent.

The Patent Office finally issued a patent on the ENIAC in 1964, and Sperry Rand used this to put forward a claim to basic patent rights on the electronic digital computer. Honeywell, Inc., contested this claim, and the case was tried in the U.S. District Court for the District of Minnesota in 1971-1973. Honeywell was eventually upheld on all counts.

The Sperry Rand Corporation was renamed the Sperry Corporation in July 1979. In 1986 as the result of a hostile takeover, it was absorbed by the Burroughs Corporation, which then changed its name to Unisys Corporation.

The Honeywell-Sperry Rand suit grew out of the ENIAC patent, which covered basic patents relating to the design of electronic digital computers. After the patent was granted to the Sperry Rand Corporation in 1964, the corporation demanded royalties from all major participants in the computer industry. Honeywell refused to cooperate, so Sperry Rand then filed a patent infringement suit against Honeywell in 1967. Honeywell responded in the same year with an antitrust suit charging that the Sperry Rand-IBM cross-licensing agreement was a conspiracy to monopolize the computer industry, and also that the ENIAC patent was fraudulently procured and invalid. Honeywell filed suit against Sperry Rand and its subsidiary, Illinois Scientific Instruments, Inc., in U.S. District Court (Minnesota District, 4th Div., No. 4-67-Civ. 138).

The ENIAC patents were filed in 1947 by John W. Mauchly and J. Presper Eckert arising from the work conducted at the Moore School of Electrical Engineering at the University of Pennsylvania. In 1946, Eckert and Mauchly left the Moore School and formed their own commercial computer enterprise, the Electronic Control Company, which was later incorporated as the Eckert-Mauchly Computer Corporation. In 1950 Remington Rand acquired Eckert-Mauchly and the rights to the ENIAC patent eventually passed to Sperry Rand as a result of a merger of the Sperry Corporation and Remington Rand in 1955.

Following extensive discovery procedures the case went to trial in June 1971. Over 32,000 exhibits, some of several hundred pages each, were introduced as evidence. The trial transcript was over 20,000 pages long. In April 1973 Judge Earl Larson found that Honeywell had infringed on the ENIAC patent, but the patent was invalid because the ENIAC had been in public use for over a year before the application was filed. The 1956 agreement between Sperry Rand and IBM was determined to be a "technological merger" and a conspiracy in restraint of trade in violation of Section 1 of the Sherman Act because the two companies together had 95 percent of the relevant market at the time. No damages or court costs were awarded to either party of the dispute.

The court also declared that the invention of the ENIAC was derived from the work of John V. Atanasoff at Iowa State University. Atanasoff and a graduate student, Clifford Berry, had developed a prototype electronic computer in 1938, later named the Atanasoff Berry Computer (ABC). John Mauchly visited Atanasoff in 1941 and was aware of the ABC, and Atanasoff believed that the design of the ENIAC was based on the ABC. This meeting became an important issue for the plaintiff during the trial.