Mr. HAMILTON. Then did Hartford-Empire take any further steps in regard to their claims that your lehr was infringing their patent? Mr. GEER. Well, after we rejected the proposal, we returned to Pittsburgh, attempting to go on as we had in the past, charging a fixed price for the lehr and selling it outright, with no royalties, and they, of course, got busy immediately to make the sale difficult by threatening suit to the customers and other means of coercion which I could explain.

Mr. HAMILTON. What I am interested in more particularly, Mr. Geer, is any particular negotiations you had with Hartford-Empire or anyone else regarding your lehr and Hartford-Empire's claim that it infringed their patents.

Mr. GEER. After we refused the agreement, they sent two members of the British Hartford-Fairmont Co. to see us, at which time they offered us $10,000 for the British rights, agreeing to give us $2,000 cash for the drawings, which we rejected, and Mr. Amsler, a former member of our company who was then connected with the Hartford Co., made numerous visits to our office for the purpose of obtaining information as to the construction and—

Mr. HAMILTON (interposing). I take it you didn't give him any information.

Mr. GEER. They finally submitted us a questionnaire and on advice of counsel we signed

Mr. HAMILTON (interposing). That was relating to your lehr?
Mr. GEER. Yes. We answered about 30 or 40 questions.

Mr. HAMILTON. Did anyone offer to purchase your lehr business about this time or later?

Mr. GEER. Well, that wasn't until later.

Mr. HAMILTON. When was that?

Mr. GEER. We were approached by one Mr. Collin, of the CollinNorton Co., in Toledo, early in 1934. Mr. Collin made an appointment and came to see us the next day, making an offer of $200,000 for our glass business.

Mr. HAMILTON. That was just for your glass machinery manufacturing business?

Mr. GEER. That is right, and the patents.

Mr. HAMILTON. Did you accept that offer?

Mr. GEER. No; we didn't. We thought it was too low, and he raised the price to $260,000, and, in fact, he approached me privately because of my having a controlling interest in the company; he approached me on the basis of selling out for $200,000.

Mr. HAMILTON. That is your controlling stock interest.

Mr. GEER. Yes.

Mr. HAMILTON. Did you accept either his proposal to pay $260,000 altogether, or $200,000 for your controlling interest in the stock? Mr. GEER. No; we didn't.

Mr. HAMILTON. Did he approach you again with any other proposition.

Mr. GEER. Yes; the first visit was in January 1934, and

Mr. HAMILTON (interposing). Now you are referring to the original visit when he offered you $200,000?

Mr. GEER. Yes.

Mr. HAMILTON. That was January 1934?

Mr. GEER. Yes; and in February he called up and made another appointment, and this time he brought with him Mr. Hazelton, vice president of the Owens-Illinois Glass Co., and Mr. Frazier, president of the Simplex Engineering Co., a competitor and a licensee of the Hartford Co.

Mr. HAMILTON. That is a licensee of the Hartford Co. to make lehrs.

Mr. GEER. That is right. This time he told us that his company, the Collin-Norton Co., of Toledo, were the people that combined the Owens Bottle Co. and the Illinois Glass Co. together, and that he was then a director in that company, and he also combined the Ed. Miller Machine Co. in Columbus, the O'Neill Machine Co. in Toledo, and the Lynch Machinery Corporation of Anderson, Ind., to operate and sell equipment under the Hartford license.

Mr. HAMILTON. What was his proposal to you at that time?

Mr. GEER. He proposed to combine the Simplex Engineering Co. and the Amsler-Morton Co. He suggested that each of us be permitted to remove the cash from the corporation, that we would each receive one-third interest in the new corporation.

Mr. HAMILTON. By each? Whom do you mean?

Mr. GEER. Mr. Frazier and ourselves would each receive a third interest in the new corporation, and another party, whom he did not mention, would receive the other third.

Mr. HAMILTON. Did he make any reference to Hartford-Empire's claim that your lehr infringed its lehr patents?

Mr. GEER. Oh, that came up in the course of the conversation, but he went on to say that the person or interest obtaining the third interest in the combined corporations would put up half a million dollars to finance the combination; that he would guarantee us all of the construction work for the Owens-Illinois Glass Co. and others that he did not mention; and he would also obtain a cross-license from the Hartford Co. to build lehrs; and, in fact, we would be permitted to build all of their lehrs.

Mr. HAMILTON. Did you accept that proposal?

Mr. GEER. No; we told him if he would give us 51 percent of the proposition, we would consider it, but not otherwise. We, of course, discussed the thing for probably 2 hours after that. We didn't change our opinion, and as Mr. Hazelton got up to leave, he said, "Boys, we have made a good offer to you now. You can make a lot of money out of this. I will give you 1 month to consider it. If you don't go in with us on this thing," he said, "we will enter suit against you and we will continue to sue you until you are out of business." And he made this statement, that "It is our plan that nobody in the glass industry should own one piece of glass-making equipment."

Mr. HAMILTON. At the end of 1 month after you had considered this proposition, did you accept Mr. Hazelton's proposal?

Mr. GEER. No; we didn't do anything about it, but the HartfordEmpire Co. entered suit against the Swindell Co. in Baltimore, one of our customers.

Mr. HAMILTON. Did you defend that suit?

Mr. GEER. We were obligated to defend it because we had written into the contract that we would defend and hold them harmless against any litigation.

Mr. ARNOLD. Why do you think they sued your customer rather than yourselves?

Mr. GEER. That is very simple. If they had sued us, we would have entered a counter-suit against them because we owned the prior patent that we still believe would have them tied up, and, suing Swindell as they did, we were obliged to enter the suit with the situation as we found it in that Swindell had previously brought three lehrs from the Hartford Co. in which they agreed, unknown to us, to not contest the validity of the Hartford patents. Entering that suit as we did, we had to defend it on the basis of noninfringement and were unable to have a fair fight.

Mr. ARNOLD. In other words, because of that license to Swindell, you were unable in that suit by any means whatever to bring your counter-claims for infringement.

Mr. GEER. That is correct.

Mr. ARNOLD. If it hadn't been for that license, you might have done it.

Mr. GEER. We would have. We may yet.

Mr. HAMILTON. What was the result of that suit in the district court? Who won it? That is what I want to know.

Mr. GEER. We won the suit in the lower court, principally because we proved that the Hartford patent was a reissue taken out 21⁄2 years after the original patent.

Mr. HAMILTON. Mr. Geer, then what happened when the case went up on appeal?

Mr. GEER. We received the favorable decision in the lower court, and when it went up on appeal the decision was reversed, and that is the way the decision stands today.

Mr. HAMILTON. You told us awhile ago, I believe, that your company had made in all 400 lehrs.

Mr. GEER. That is correct.

Mr. HAMILTON. And that was over a period of approximately 20 years?

Mr. GEER. A little over 20 years.

Mr. HAMILTON. Do you recall how many lehrs you made and sold in 1934?

Mr. GEER. It dropped precipitously at that time.

Mr. HAMILTON. The Swindell suit was filed in 1934?

Mr. GEER. In 1934. Now I am referring to the bottle industry. We had been selling approximately 20 lehrs per year up to that time, and in 1934 we sold 5, and in 1935 I think 4, and it has gradually gotten down to 1 at the present time.

Mr. HAMILTON. What do you mean by the present time-1938?
Mr. GEER. 1938.

Mr. HAMILTON. You have only sold one this year?

Mr. GEER. Only one this year.

Mr. HAMILTON. How many did you sell in 1937?

Mr. GEER. I don't believe we sold any in 1937.

Mr. HAMILTON. Can you tell me how much the Swindell litigation

cost your company?

Mr. GEER. Well, it was tremendous for a small concern.

Mr. HAMILTON. How much was it?

Mr. GEER. It amounted to close to $50,000, and that doesn't take into consideration the expense of our organization.

Mr. HAMILTON. Is that litigation terminated, or is the case still pending?

Mr. GEER. No; the case is still pending.

Mr. HAMILTON. Is the reason that your sales dropped the fact that your customers are apt to be sued if they buy?

Mr. GEER. That is true.

Mr. HAMILTON. Mr. Geer, can you tell me who Mr. Hazelton was, and Mr. Collin? What did you say their full names were?

Mr. GEER. Everybody knows him as Ben Hazelton, but I think his full name is Benjamin.

Mr. HAMILTON. Can you give me the full name of Mr. Collin?
Mr. GEER. Harry Collin, I believe.

Mr. HAMILTON. You told us awhile ago that you were offered $260,000 in the first part of 1934 for your glass-manufacturing machine business.

Mr. GEER. That is correct.

Mr. HAMILTON. You say the litigation has cost you $50,000 already? Mr. GEER. That is correct.

Mr. HAMILTON. I would like to ask you this: You also told us, I believe, that you have sold only one lehr so far this year.

Mr. GEER. That is correct.

Mr. HAMILTON. That you sold no lehrs last year. What would you say the value of the glass-manufacturing machinery business is now? That is, your business.

Mr. GEER. I will give you a comparison. In '28 we were doing $800,000 worth of business and last year we had $18,000 worth of business in the glass industry-quite a drop.

Mr. HAMILTON. You are still continuing the fight?

Mr. GEER. We are going to continue as long as we can. We believe we are right and we are going to stick to it.

Senator KING. Was Mr. Hazelton identified when he came to see you?

Mr. GEER. He was vice-president of the Owens-Illinois Glass Co. Senator KING. Is he still?

Mr. GEER. I can't answer that.

Mr. HAMILTON. Did the Hartford-Empire Co. circularize the glass machinery purchasing trade after they filed their suit against Swindell?

Mr. GEER. They circularized them sometime after that. I can't say exactly when, but they had previously circularized the trade, advising that we were infringing their patents long before that. Mr. HAMILTON. Thank you very much.

Mr. GOODRICH. At this point, Mr. Chairman, in connection with this last witness, I offer to you and ask that it be taken into the record. and printed, a copy of the decision of the fourth circuit court of appeals in the case of Hartford-Empire Co. versus Swindell Bros., Inc., and the Amsler-Morton Co., intervenor, which is found in 39 U. S. Patent Quarterly, 87, and the decision on rehearing and the argument which is found in 96 Fed. (2) 227.

The CHAIRMAN. Mr. Goodrich, we have been trying to keep the record down as much as possible. You have observed that I have excluded many of the documents presented by the Department of Justice. In this case if you will be good enough to file the citations of

all of the cases I think they will be available to all the members of the committee. We each have libraries and the Supreme Court Library is available and the Library of the Senate, and it probably would be unnecessary to put it in the record.

Mr. GOODRICH. I am sure that is so, Your Honor, but this record goes out to a great many people who are not members of the committee, and if this patent case is to be retried before this committee, certainly I would like to have the decision there.

The CHAIRMAN. I think the patent case is not being retried.

Mr. ARNOLD. The statement is in the record that the lower court was reversed, and that is all you really want, isn't it?

Mr. GOODRICH. Coupled with the statement, Mr. Arnold, that there was a rehearing before the circuit court and the decision again upheld.

Mr. ARNOLD. I think we can show that and you can give the citation in the record now.

Mr. GOODRICH. 96 Federal Reporter (2d) 227, and the first report was found in 39 U. S. Patent Quarterly 87.

Senator KING. Have you extra copies of your brief?

Mr. GOODRICH. These are not the brief, Senator; these are the decisions. I will be glad to leave these. We have extra copies.

Mr. Cox. I should like to make a vigorous objection to any characterization of this testimony as a retrial of the patent case.

The CHAIRMAN. It was stated by the chair as not a retrial.
Mr. GOODRICH. I didn't mean to start a controversy on that.
The CHAIRMAN. I understand that, Mr. Goodrich.

Are there any other questions?

Mr. HAMILTON. I have none.

The CHAIRMAN. Do any members of the committee desire to ask Mr. Geer any questions?

Mr. GEER. I think I ought to make a further statement here before leaving, and that is during the trial they brought out the importance of their design of lehr and at the same time they were getting ready to offer to the trade a cheaper and more inexpensive lehr, amounting to $2,500, and $2 per day royalty.

The CHAIRMAN. The committee will stand in recess until tomorrow morning at 10 o'clock.

(Whereupon, at 4:20 p. m., an adjournment was taken until Friday, December 16, 1938, at 10 a. m.)