EXHIBIT No. 430 BAUSCH & LOMB OPTICAL CO. CORRESPONDENCE From Mr. M. H. Eisenhart. Το Mr. Edw. Bausch. #1549 No. 340 Jan. 11, 1927 I have read the following paragraph in August Lomb's letter of December 20, 1926: "We note that you have decided to give up all military work in connection with foreign countries, thus doing away with the supplementary agreement of October 28th, 1925. Its second paragraph on page 2 treats of instruments which you might be called to supply for foreign vessels built or equipped on American ship yards, as was the case for Argentine. We understand that, as this entire agreement is now canceled, you will renounce to bidding for such instruments hereafter." Is it your understanding from this that in the future we will not bid on any military instruments for use anywhere outside of the United States? As this is a change over our present procedure, I think we want to be sure of the definite understanding." (Signed) M. H. E. NOTE.-Write answer with carbon insert to retain copy of reply on reverse side of original. EXHIBIT No. 431 From Mr. E. Bausch To Mr. M. H. Eisenhart January 27, 1927 #1549 No. 340 It is my understanding, in accordance with the opinion of Carl Lomb, that we are not to bid on any military instruments for use anywhere outside of the U. S. The agreement is that if such inquiries come to us we are to refer them to Zeiss. If, on the other hand, any inquiries come to them which belong to this territory, they are to be referred by them to us. A condition may arise, as has been the case before, where a foreign government might want to place an order with us, this to be under supervision of Army and Navy officers and the inspection as well. The procedure then would be I should think-that we defer giving any definite answer until we had submitted the matter, according to agreement, to Zeiss, and await their disposition of it. (Signed). EDWARD BAUSCH. EXHIBIT No. 432 MATERIAL FOR BAUSCH AND LOMB [From the Literary Digest, vol. 122, No. 27, December 12, 1936, pp. 41-42] WAR MATERIALS: OPTICAL INSTRUMENT COMPANY WILL NOT SELL TO POTENTIAL ENEMIES OF U. S. "Millions of dollars of foreign Government orders for military optical instruments have been rejected by the Bausch & Lomb Co., of Rochester, New York, because they might conceivably be used against the United States or its interests in another War. "Proudly last week, vigorous, eighty-two-year-old Dr. Edward Bausch, founder and Chairman, declared that to be his company's settled policy, developed 'through a close understanding with the Departments of the Army and the Navy of our Government.' "Chiefly, Bausch & Lomb's rejected orders have been offered by England and France, have been for range-finders, periscopes, gun-sights, binoculars, artillery fire-control instruments. Business from those two Governments would have exceeded $1,500,000. Various smaller nations have also sought to make contracts and have been refused. Self-sufficient Germany, however, has shown no needs. "War-Time Seller-During the World War, encouraged by Washington, Bausch & Lomb made large sales to the Allies, built up an extensive business with Great Britain. Promptly with the reappearance of European war-scares several years ago, however, the policy of no supplies to potential combatants abroad was adopted. "They are not prepared for war over there,' a company officer gravely explained last week, and if we refuse to help them prepare, it puts it off just that much.' "Last week, Doctor Bausch traveled from Rochester to Manhattan to receive from the American Society of Mechanical Engineers the valued award of its annual medal, for 'inventions and improvements of great merit in the technical and public sense.' To the Society on that occasion he revealed his costly refusal to help modern Europe prepare for war." SIRS In reply to your letter of March 24, 1938, we wish to inform you that the instruments that we manufacture for the U. S. War Department are 4-meter Stereo Height Finders. Unfortunately we have to inform you that we are not in a position to take British Government orders at the present time. Very truly yours, WM: FCJ BAUSCH & LOMB OPTICAL CO. EXHIBIT No. 434 JUNE 20, 1938. BAUSCH & LOMB OPTICAL COMPANY, 635 St. Paul Street, Rochester, N. Y. GENTLEMEN: It has become necessary for our associated manufacturing company in England, the Standard Telephones and Cables, Ltd., to manufacture certain lenses and optical systems from British-made optical glass, and for this purpose we need the appropriate manufacturing equipment, together with specifications, and the services of one or two experts necessary to get us started. As the field of use is limited and of a confidential nature, I am unable to say at this time what types, sizes, and quantities of lenses would be required. However, I may say that the lenses required are not for cameras or eye glasses. Would you be interested in an arrangement whereby you would sell us the necessary equipment and also supply us with specifications and technique in return for a percentage on sales? We would of course expect to pay the salaries and expenses of any experts whom we might need. If you are interested in exploring the possibilities of making an arrangement of this kind, I should appreciate hearing from you as early as possible. Yours very truly, WEL.R W. E. LEIGH, Assistant Vice President, International Standard Electric Corporation. Mr. WILLIAM E. LEIGH, EXHIBIT No. 435 ROCHESTER, NEW YORK., July 1, 1938. International Standard Electric Corporation, 67 Broad Street, New York, New York. DEAR MR. LEIGH: One of the first steps I took in giving consideration to your proposition which we discussed yesterday was to look into the contractual arrangements to which we are already obligated which I spoke to you about in my conversation. Our attorneys tell us that we are absolutely tied up in a way that will prevent our giving you the type of assistance you need to get into the manufacture of optical fire-control instruments. My thought was that events over the last few years had changed our foreign relationship in a way that might allow us to work with you, but I am definitely satisfied now that such is not the case. Because of this situation, there is no need for us to delay you any further in your plan. I enjoyed very much your visit here and perhaps at some future occasion I may have the opportunity of meeting you again. Reference: Your letter N/18911 of June 22, 1932. Jena, Germany. (Attention: Mr. Neuffer.) GENTLEMEN: We wish to confirm that in the spring of last year tests were conducted at Aberdeen Proving Ground with your 4-meter Height Finder, a 4meter Height Finder built by us, and a 4-meter Height Finder built by the Société Optique et Précision de Lavallois. Our 4-meter Height Finder was built principally according to your design with only minor modifications. However, it was mounted on a quite different type of stand, the specifications for which were received from Frankford Arsenal. The stand comprises a tripod and cradle which during transportation is disconnected from it. The cradle is equipped with electrical transmission systems for the azimuth and elevation, and also the height of the target which is read on the outside scale and cranked into a transmitter motor by the man who reads the height scale. The stand of the Lavallois instrument is built on the same principle and, we are quite positive, according to the same specifications that we received from Frankford Arsenal. It seems to us that the idea of having a French instrument compete at the tests was originated during the visit of Major Welch to France two years ago. The French equipment was not purchased by the Arsenal; however, for no other reason than that there was no appropriation available, and the Arsenal was not authorized to such a purchase because of the recent law requiring that military equipment which can be produced in this country must be purchased here. The French Range Finder proper is sectionalized in three parts. It is equipped with end reflectors which consist of mirrors held against a metal (apparently steel) housing. The height values are developed out of the slant range and the angle of elevation apparently in very much the same manner as in your and our instruments. However, the compensators, instead of being arranged one on each side of the instrument, are both on the right-hand side. At least that is what the writer, who had an opportunity to see the instrument at Aberdeen, has been able to find out. We have been wondering whether the measuring mechanism of the French instrument, in spite of the fact that the compensators are arranged on one side of the instrument, does not infringe your American patent No. 1,638.190. and have come to the conclusion that the patent must be infringed, provided that the French instrument is equipped with four compensator wedges for the purpose of measuring the height of the target out of the slant range and the angle of elevation. We would like to receive from you at as early a date as possible a confirmation of our above stated opinion. This matter is of the greatest importance to us right now, because Frankford Arsenal is contemplating the purchase of a small number of Height Finders (possibly between six and ten) and it is their intention to refrain from specifying a definite type of instrument and to have bidders send with their bids their own drawings, together with specifications of accuracies which they guarantee. The undersigned has been able quite recently to find out with certainty that the Keuffel & Esser Company, of Hoboken, New Jersey, has entered into a tentative agreement with the Levallois Company, according to which the latter company will furnish Keuffel & Esser the design of the Levallois Height Finder against payment of a certain royalty. We do not know if the agreement refers also to any other military or nonmilitary instruments, but are inclined to believe that so far it has only reference to the particular type of instrument in question. Although we have no definite data regarding the outcome of the competitive tests at Aberdeen Proving Ground, and are not in a position to procure such data because they are kept strictly confidential, we have been given to understand that the Levallois instrument and ours give practically the same accuracy, whereas yours-furnished in 1928-falls slightly behind in performance against the two new instruments. This being the case, we are sure that for the new prospective Height Finder order we will have to face very keen competition on the part of the Keuffel & Esser Company. As a matter of fact we are quite positive of this, because the information regarding the agreement above referred to was obtained in a discussion of the merits of the French instrument and of the possibility of its competition in connection with the prospective order. Bids for this new prospective order have not yet been received by us. It is at present our intention after the bids have been received to wait until a few days before the opening of the bids and then call the attention of the Keuffel & Esser Company to the fact that we are controlling patent No. 1,638,190, which prohibits their furnishing the Height Finder in question. In this manner we hope to be able to make them afraid of touching this business. You will understand, therefore, how anxious we are to receive your opinion that the arrangement of four compensator wedges on one side of the Range Finder infringes your patent. We hope to receive the requested information promptly, and remain, Very truly yours, OHW/RDW. BAUSCH & LOMB OPTICAL COMPANY. EXHIBIT No. 437 JANUARY 17, 1936. CARL ZEISS. Jena, Germany. GENTLEMEN: We have given consideration to the suggestions which you have made for further clarification of the interpretations of the existing contract which was the subject of our letter of October 14, 1935. We are, therefore, restating the points covered in that letter, as follows: 1. We accept your position with respect to the date of the termination of the existing contract, namely, that such contract will terminate on April 30, 1941, unless we shall have agreed upon an extension thereof or a new agreement prior to April 30, 1939, it being contemplated that negotiations with respect to an extension or a new agreement will be entered into sometime before April 30, 1939. 2. Notwithstanding the termination of the agreement, however, we shall nevertheless have a continuing but nonexclusive licence as at present until May 1, 1946, to manufacture and sell under any of your inventions, whether patents thereon have been issued or are pending, which we have used prior to October 31, 1940, and shall be required to pay to you a royalty of 6% of the invoice price of any instruments, the manufacture of which involves one or more of such patents or applications, unless the patent only refers to secondary parts, in which case the royalty shall be reduced and we shall come to an agreement as to a suitable reduction in the rate of royalty. We may continue to manufacture and sell under any of your said inventions after May 1, 1946, and throughout the remaining life of the patents upon a royalty rate which is to be mutually agreed upon with respect to each patent so in use by us on October 31, 1940, you agreeing that the rate of royalty after May 1, 1946, on any instrument involving one or more of your said inventions, shall in no case exceed 10% of the invoice price. 3. You are to assign to us all unexpired United States patents and all pending applications for United States patents in the military field now standing in your name or the name of any company controlled by you through stock ownership or otherwise, or in the name of any individual in the employ of your company or any company so controlled by you. You are also to assign to us all applications for patents in the military field which are filed prior to October 31, 1940, on inventions made by any individual or individuals employed by you or any company so controlled by you. You are to file and prosecute such applications and pay all expenses and fees therefor. With respect to such pending and future applications, we suggest that you execute the proper assignment and send it to us as soon as you receive the notice of allowance in an application. We will promptly record the assignment in the United States Patent Office and notify you so that you may pay the final fee in due time so as to have the patent issued in our name as assignee. We shall assign to you or your nominee all your United States patents or pending applications which have been taken out in our name, or caused to be assigned to us under the provisions of said agreement prior to April 30, 1941, reserving to ourselves only the license to manufacture thereunder upon the payment to you of the royalty as agreed under 2 hereinabove. We trust that our understanding is in accord with yours, in which case we will appreciate a prompt acknowledgment to that effect. DEAR AUGUST: In our proposal of settlement there are a number of thoughts which I would like to express and have you communicate to Zeiss in any manner you see fit. As you know through correspondence, and also will remember in the conference which you and I had with Zeiss on the matter of settlement, we have all along had the idea that we should not permit this difference of opinion to be settled by arbitration, believing that if we have a real desire to amicably settle it we should be able to do so. As you will see from W. Drescher's letter, after receipt of the letter from Dr. Straubel of October 6, we four older executives have proposed to make a compromise offer. You will remember, too, that I was very pronounced on several occasions and expressed the opinion that we would under no condition consider the matter of interest, but we who have been party to the former friendly relations, and with a real desire to establish them, have given way in our attitude, after considerable deliberation, and are making this final offer, which at the outset we had no idea of doing. Our position here was identical with that of the people in Jena-that we of the older generation, having enjoyed the pleasant relations which existed for so many years, would naturally have a desire to reestablish them, and now that the younger element in Jena has given way to this view and make their compromise proposal, our younger generation has fallen in line and given way to our judgment, showing thereby a splendid spirit of cooperation. But it is very pertinent to ask just what this future relation shall be? The mere fact of friendly handshakes and talks is pleasant enough, but it seems to us that there should be a substantial background. What I mean by this is that there should be, in our future operations, a common desire to foster the interests of both concerns and a leading motive not to injure the interests of one another. This, I am afraid, does not exist at the present time. There may be, on the part of the Zeiss people, causes for complaint; and if so, we would be glad to have them mention what these complaints are, and we, on the other hand, be free to do the same. As you know, at the present time our only identity of interest is in the military line. The contract covering this field was, of course, entered into with wholehearted good faith on both sides and a conviction that it would prove mutually profitable. However, almost immediately after its execution we were faced with our government's armament reduction program, and following that with intensive domestic competition, constantly lowering prices and a loss of business and profit to us both. As matters now stand, with a greatly reduced volume, there has been little development work and little occasion for us to call upon Zeiss for technical assistance. As a result the royalties which we have paid to Zeiss, and they now total to nearly $200,000, must, as we see it, have been practically all clear profit to them. While they have produced for us a net |