According to The Adventurous Life of a Versatile Artist:
It being a disgrace for Schutzman Werner Graff to have this punishment on him, with the assistance of the police, he took it to the highest court in Germany, ” Oberlandesgericht, ” and there [Third Trial] the learned judges again gave Houdini the verdict from which there is no appeal.
According to Kellock:
Werner Graff took an appeal to the highest court. There was much legal argument. Houdini, the Schutzmann admitted, had indeed opened certain cell doors and handcuffs, but Houdini advertised also that he could open safes, and he had not opened a single safe in Germany. Therefore, Werner Graff contented, the libel should be dismissed. Houdini’s attorney ridiculed this argument. Houdini, he said, had opened all of the Werner Graff’s locks, and he could open safes as well.
Finally the justice wearied of the argument. He declared that he had a safe in his chambers, which offered an easy means of settling the dispute. If Houdini could open it, obviously Werner Graff had lost his case. If Houdini failed to open it, there was merit to the Schutzmann’s contention.
Houdini was in a dilemma. He had never tackled a German safe, and he suspected that this untested strongbox might have a secret in its combination that would prove beyond his skill. There was nothing to do, though, but accept the test. He requested that he be permitted to work at the safe alone, and this plea was granted.
The justice himself led the way to his chamber, and indicated a heavy steel chest of German make against the wall.
Glancing significantly at his watch, he said: “You will summon the court as soon as you are ready.” Then he closed the door as soon as you are ready.” Then he closed the door and Houdini was alone in the room.
For a minute or so, Houdini dared not take a step toward the formidable box. Was his continental career to end ignominiously in that room? He forced himself to cross the room, and he gave a vicious yank at the safe door. It swung open — it had not been locked.
After a decent interval he called in the court to reveal his task completed.
Werner Graff was fined thirty marks, as well as all costs of the three trials, but most humiliating of all, he was compelled to publish a public apology, “in the name of the Kaiser,” in all the principal German newspapers, and Houdini was permitted to insert notices of the verdict in all the newspapers in Cologne at Graff’s expense. German judges had a sense of the realities.
Thereafter in Germany Houdini was more than a handcuff king and distinguished Ausbrecher. He was the young man who had actually whipped the Polizei in a court of law.
So was there a third trial and did it include an escape from a safe?
FWIW: Silverman does not mention the third trial with the safe.
That said, the definitive answer is most likely in the Houdini’s German Slander Trial Archive, 1902 that sold for $26,000 at the Potter and Potter auction on Aug 23, 2014.
No Houdini biographer to date (which includes Silverman) has had access to this folio. Hopefully the next major Bio will include any new information from this folio and answer any unanswered questions.