Sperry Rand Corporation

There are two epochs in the history of computing: before the completion of the Electronic Numerical Integrator and Computer (known as the ENIAC), and after. While there are several controversies about the development of the ENIAC and its immediate successors, there is nearly universal agreement on three points: the ENIAC was the watershed project which convinced the world that electronic computing was not merely possible, but practicable; it was a masterpiece of electrical engineering, unprecedented in reliability and computing speed; the two men most responsible for its conceptual and technical success were John Presper Eckert, Jr., and John William Mauchly, both of the Moore School of Electrical Engineering.

The history of computing prior to the ENIAC was long and varied. The desire for a mechanical means of computation was ancient, and had prompted the invention of many devices, from the abacus to the adding machine. These developments culminated in the work of Charles Babbage, whose grandiose, fully mechanical designs had largely been forgotten by the turn of the 20th century, and of Herman Hollerith, whose electromechanical punched-card tabulators came to the rescue of the 1890 Federal Census. Notable later efforts included the creation of the differential or Bush analyzer. Though the Bush analyzer was able to perform many mathematical equations, it was still at its core a mechanical device with an electric drive and thus could not produce the greater precision and accuracy desired by scientists. It was partially in response to this slowdown in the advancement of electrical engineering technology that the ENIAC was developed.

The catalyst that advanced electrical engineering and the computer beyond the differential analyzer and to the ENIAC was the demands of the army during the 1930's and particularly the Second World War. The practical need that the differential analyzer could not solve effectively was the preparation of firing tables-charts that showed how to aim artillery accurately. Too many people and too much time were required to prepare these tables. The federal government was willing to fund research undertaken to improve upon the existing technology. Recognizing this opportunity to expand research and acquire new computing devices, the Moore School of Electrical Engineering of the University of Pennsylvania sought and obtained a contract to develop a differential analyzer of its own. The inadequacies of these mechanical devices at the Moore School were soon recognized by John W. Mauchly, a physics professor, and J. Presper Eckert, Jr., a graduate student.

Eckert and Mauchly believed the best way to improve computer devices was to make these machines primarily electronic rather than mechanical. Despite skepticism from his colleagues in the field, Mauchly thought that vacuum tubes could be used to accelerate calculations and to increase accuracy. Eckert also believed that not only could vacuum tubes be used but also that the existing tubes could be utilized if operated at low voltages. Sometime after Mauchly discussed their ideas with other faculty members and wrote a memo. In 1942 the liaison between the Army Ordnance and the Moore School, Lt. Herman H. Goldstine, heard of Mauchly's ideals for an electronic computer. Goldstine, who was well acquainted with the shortcomings of the differential analyzer, was greatly interested in this project and suggested that a proposal to the army be written to develop an electronic computer. On April 9th, 1943 the Army granted a contract to the Moore School to build a large general-purpose electronic computer. By end of 1945 the electronic computer developed at the Moore School, known as the ENIAC was operational.

The significance of the ENIAC was soon understood by the many participants in its development who would later vie for recognition and control over the project. The first controversy to arise concerned a paper written in June 1945 by John von Neumann, a mathematician who participated in discussions over the design of the ENIAC. In his paper von Neumann summarized the work of the project without giving any credit to Eckert or Mauchly; thus, presenting to those people in the profession who read the paper that von Neumann was responsible for the project. Patent rights and control over the project were also hotly contested. During an attempt by Irven Travis to restructure the accounting operations and procedures of the Moore School in 1946, Dean Harold Pender wrote a letter to Eckert and Mauchly requiring them to sign a patent release form for all work they have done at the University. He also demanded that they place the interests of the University first rather than their own commercial interests in their work. Because they could not agree to such terms Eckert and Mauchly resigned from the Moore School staff in March of 1946. Though they had left the University and formed their own company, known as the Electronic Control Company, they still encountered problems over the ENIAC.

In 1947 when Eckert and Mauchly began to look into the possibility of taking out a patent on the ENIAC, Army lawyers informed them that the circulation of von Neumann's paper among people in the profession made the ideas from the ENIAC part of the public domain. Eckert and Mauchly, however, did apply for a patent on the ENIAC in June of 1947. Armed with the potential patent rights to the ENIAC and freed from the constraints of the University, they hoped to succeed in forming a successful computer company; their attempts at this, however, failed when they were unable to maintain a dedicated funding source to cover their expenses. Eventually in February of 1950, Eckert and Mauchly were forced to sell their company, by then known as the Eckert-Mauchly Computer Corporation, and the patent rights to the ENIAC to Remington Rand Corporation. Though the ENIAC patent rights were owned by a large corporation, problems over the validity and rights to the invention continued.

While trying to finalize the patent application for the ENIAC, serious problems regarding the patent rights of Eckert and Mauchly, represented by Sperry Rand Corporation, arose in the 1960's. Sperry Rand was engaged, in the early 1960's, in litigation with Honeywell, Inc., and other companies, over the infringements of computer patents owned by Sperry Rand. By 1964 Sperry Rand was able to secure a stronger position on their claims to the electronic computer by being granted the ENIAC patent. With the patent in hand Sperry Rand, through its subsidiary Illinois Scientific Developments, Inc., notified all other companies in the electronic data processing field, except IBM, that they were infringing upon the rights the ENIAC patent and must pay royalties. Because of their former difficulties with Sperry Rand in the early 1960's and anticipated difficulties from a possible suit to collect royalties, Honeywell filed a suit against Sperry Rand in 1967 on the grounds of antitrust violations and unjustified claims to the electronic computer. The case was heard in the 4th Division of the Minnesota District Court (No. 4-67-Civ. 138).

The trial testimony began on 1 June 1971 in Minneapolis before Judge Earl R. Larson with the firm of Dorsey, Marquart, Windhorst, West and the firm of Holladay and Molinar, Allegretti, Newitt and Witcoff both representing Honeywell Inc. The defendants, Sperry Rand Corporation and Illinois Scientific Developments, Inc., were represented by the firm of Dechert, Price and Rhoads. The plaintiff’s counsel presented its case on a number of points that would show the groundlessness of Sperry Rand’s claims to the exclusive patent rights and control of the electronic data processing field. The main points that they presented were generally confined to five areas, viz: a discussion of the work and developments in the field of electronics at the Moore School of Electrical Engineering at the University of Pennsylvania between 1930 and 1947 as the result of "complex team effort;" a presentation of the state of research in the field of electronic digital computers undertaken at other institutions and companies during the 1930s and early 1940s; a explanation of the attempted domination of the electronic data processing industry by Eckert and Mauchly, and later Sperry Rand Corporation, through numerous patent applications based upon dubious claims, the defects of which were knowingly concealed from the patent office; a demonstration of Sperry Rand’s "pattern of prosecuting patent applications from which they knew no valid patents should issue;" and finally, an exposition of Sperry Rand’s plan to dominate the computer industry through the vigorous assertions of its patents and patent application "portfolio" which it had amassed through cross license agreements with IBM, AT&T, and Western Electric Company, Inc. (both in 1965). The plaintiffs also argued that through its cross-license agreement with IBM in 1956 and settlements with a number of other large computer companies, that Sperry Rand had effectively eliminated any threat of a careful investigation and analysis of the ENIAC patent claims. It was from this position of immense strength, Honeywell contended, that smaller companies would be powerless to fight.

During the course of the trial two major points rose which tested the rights of Eckert and Mauchly to the ENIAC patent and proved fatal to Sperry Rand's claims. The first point was over where the basic ideals used in the ENIAC's design originated. Sperry Rand contented that the ENIAC was solely the invention of Eckert and Mauchly; however, Honeywell stated that Eckert and Mauchly had taken the idea from John Vincent Atanasoff and his assistant Clifford E. Berry. Building upon the basic historical view that all inventions are the result of the work of many people over time, Honeywell capitalized upon a visit Mauchly made in 1941 to Atanasoff. During this visit Atanasoff showed Mauchly a small electronic computer he had developed a few years before. Because there were some similarities in the design and operation of Atanasoff's machine with the ENIAC, Honeywell asserted that Eckert and Mauchly used Atanasoff's ideas for their own machine. The second major point concerned the filing of the patent in 1947. Because von Neumann had written a paper about the design of the ENIAC and circulated it a year before the patent application was filed, it was argued that the ENIAC had become part of the public domain and could not be patented.

On 10 October 1973 Judge Earl R. Larson presented his final ruling in the case. He determined that the ENIAC patent was invalid mainly because of the two points raised during the trial. He concluded that while Eckert and Mauchly may have created the ENIAC, they did not create the basic ideas used in the assembly of their computer. Judge Larson also believed that the antitrust charge was valid. He stated that the 1956 cross-license agreement between IBM and Sperry Rand was a technological merger and "an unreasonable restraint of trade - an attempt by IBM and S[perry] R[and] to strengthen or solidify their monopoly in the E[lectronic] D[ata] P[rocessing] industry." Though ruled as an anti-trust violation, the statute of limitations had run out and the charge had to be dropped. Sperry Rand chose not to contest this decision and the findings of the court became final.

(Historical note prepared by the University of Pennsylvania Archives)

From the guide to the ENIAC Trial exhibits master collection, 1864-1973, (bulk 1938-1971), (University of Minnesota Libraries. Charles Babbage Institute. [cbi])