Patents and how to Make Money Out of Them

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Preface

I

The main object of this book is to tell how to make money ont of inventions and patents.

It treats chiefly of the business side of inventions. Its authors have had a large experience in matters relating to patents, and believe that a little honest and reliable advice as to how to invent, to patent, to introduce, to sell and to protect an invention will be appreciated by all who have or are likely to have business in this line. Nearly all the literature on this subject has been in the nature of text-books on the law of patents, which are practically of no use to the business man, or in the form of adroit advertising matter, the object of which has been to transfer dollars from the pocket of the inventor to that of the advertiser. It is a recognized fact that many ingenious men waste their ingenuity by exercising it in the wrong direction. To such men it is hoped this book will be an aid. Others, through ignorance of the nature of patents and the proper method of procedure, fall into the hands of incompetent and unscrupulous attorneys and fail to secure that to which the law entitles them, and so see a competency slip from their hands. To such this book, if followed, will prove a blessing. Again, manufacturers and

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It PEEFAOK

other busineBS men often meet with loss in purchasing patents which do not cover the inventions to which they relate, or to which the title is in some way defective. To these the book will be of great assistance. Competent lawyers are often unable to advise their clients as to practical means of selling, licensing or introdacing a particular invention. It is hoped that this book will be a help to them. Finally, we commend this volume to all people having any connection with patents, and trust that the practical experience which is herein embodied may, in some way, be a help to alL

This book is not intended to take the place of an attorney ; it is not published to boom a patent agency ; it is not a collection of legal lore and decisions for the especial use of lawyers, but it is intended as a practical guide for inventors, manufacturers, lawyers and business men generally who have anything to do with patents.

We have avoided text-book form in this book and have refrained from using foot notes, as these, to the average reader, are confusing and disconcerting. The reader is asked to take our word for the facts herein, and as to matter of opinion and advice to take it for what it is worth.

Nbw Yobk, February, 1899.

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BOOK I. PATENTS GSNESAIiLT

CHAPTEB. PAOB.

I. Origin and Nature of Patents — Modem Application of the Term, ...••!

II. Importance and Value of Patents — Their Effect

on Trade, • 6

III. Patents in the Nineteenth Century— A Few

Bern arks to Manufacturers, .... 12

lY. What is Patentable, .20

Y. Caveats, .27

YI. Who May Obtain a Patent, . • • • 31

YII. Concerning Patentability, 38

t

YIII. Prior Use, Public Use, Bxperiments, . .46

Book II

I. The Application, .•••••• 50

III. Interferences, 64

lY. Disclaimers and Beissues, 71

Y. Abandoned, Forfeited, Bevived and Benewed

Applications, 79 vi CX)NTENTS.

YI. Infringement, Infringing Inventions and Acts

— Bemedies for Infringement, ... 82

yil. Trade-marks, Prints and Labels, ... 96

VIII. OopyrightB, 109

IX. Title, Assignment, Grants, Mortgages and

Licenses 128

X. Foreign Patents, . . . . • . .196

Chapter I. Obigin And Nature Of Patents — The Modebn Application Of The Term

Originally patents were monopolies and were more often granted to give the patentee a monopoly in large tracts of land for commercial, mining, manufacturing and general business purposes, such, for example, as the patents granted to the first colonizers in America for immense districts of land, to which the name of the original x>fttentee has, in many cases, been applied.

Often at the present time the Government grants to homesteaders and other persons patents for the land which they have preempted, purchased or otherwise secured. But in its ordinary application a patent is a Government grant giving an inventor the exclusive right to make, sell and use his invention for a term of years. In the United States a patent is granted for seventeen years.

• ••*-•• •

• • • •• • • •

2 ORIGIN AND NATURE OP PATENTS.

A patent, in its modem acceptation, is not a monopoly, bnt is a consideration offered as an inducement for a person to invent. In other words, it is a prize or reward for his ingenuity, and gives him the exclusive right to make, use and sell the invention for a limited term in consideration of the benefits of the invention to society.

To secure a valid patent, therefore, the Q-ovemment requires by law that the inventor shall file in the Patent Office drawings and descriptions of his inventions, sufficiently clear to enable persons skilled in the art to make and practice the invention, so that at the end of the term of the patent the public can have access to the invention through the records and so reap the benefits thereof.

As above remarked, patents were originally monopolies, but in the 21 James I., 1624, the Statute of Monopolies, so called, was passed, by which the granting of special and exclusive privileges in trade were prohibited, but the statute specifically excepted *4etters patent and grants of privileges for the term of one and twenty years or under, heretofore made for the sole work or making of any manner of new manufacture within this realm to the first and true inventor or inventors of such manufactures."

This statute marked the beginning of modem

MODERN APPLICATION OP THE TEEM. 3

patent laws for the protection of new and useful inventions.

In France the first patent law was passed in 1791. In the United States the patent system has grown up nnder a positive grant in the Federal Constitution and by reason of Statutes, the first of which was passed in 1790, and others from time to time to the present day.

A patent is wholly a creature of statute, and other nations have been somewhat slow in following the lead of Great Britain, the United States and France, and even at the present time there are some countries which have no patent law. Nearly all the civilized nations, however, recognize the importance of a patent system to foster and encourage inventions, and, at the present day, there are patent laws in nearly every civilized country.

As a rule, the laws are such that an alien may have practically the same protection for his invention as a native, though in many countries it is stipulated that the invention must be worked within a certain specified time or the patent forfeited.

It is contended by many that a provision of this nature should be made in the United States, so as to prevent large corporations from buying and controlling numerous patents for inventions which are never marketed, thus depriving the public of the benefit which it

4 EFFECT OF PATENT SYSTEM.

shonld receive, but it is a question whether the time is ripe for such a change. ^ It is as true now as of old that '^ nothing succeeds like success/' and it is a fact beyond dispute that the patent system of the United States has brought inventions to a wonderful state of efficiency, so that the country leads the world in valuable improvements.

t

CHAPTER IL

IICPOBTANCE AND VALUE OF PATENTS — THBIB

EFFECT ON TRADE.

Visit an oculist and, whatever your bodily ailment, he will probably tell you that the difficulty originates with the eyes. A skilled surgeon will likewise conclude that the supreme remedy for every ill is the knife. So, politically, one set of people will attribute the prosperity of the United States to its natural resources, another to the policy of protection, another to certain financial systems, and so on dd infinitv/m.

But we believe it is a demonstrable fact that the patent system of America has done more to promote its commercial supremacy, its wonderful prosperity and general well-being than any other cause.

The workings of the patent system are quiet and unobtrusive. The inventor does his work, and is, as a rule, comparatively unknown. He is not greeted with the applause of the fighting man or the orator, but he does and has done

6 IMPOETANCE AND VALUE OF PATENTS.

more for the world than any other man or set of men.

The patent system of America is more liberal to the inventor than that of any other conntry, and it has been the policy of the Government to do what it could to encourage inventions, notwithstanding the fact that the agricultural communities have usually opposed patents as being in the nature of monopolies.

The men who have made American manufactures famous and have, by their improvements, brought the United States to the front rank as a manufacturing and commercial nar tion, would not have brought out their improvements and could not have found money to exploit them were it not for the fact that the Government has provided reasonable protection.

People do not work for the love of working. It is not human nature. There must be some sort of encouragement and stimulus. The patent system of the United States has provided this stimulus, and has opened almost the only avenue of success on which the poor man can successfully enter.

It is generally recognized that patent law forms an important branch of American jurisprudence, still' the real value of American patents and of the American patent system is appreciated by comparatively few people, and few know the boundless benefits the world has

IMPOETANOE AND VALUE OF PATENTS. 7

derived from the achievements of American inventors. Many of them have cut niches in the temple of industrial fame that will last forever.

When it is remembered that the richest nation in the world is now the United States, that her improvements and manufactures are fast taking the lead, and that the whole volume of manufacturing business in America is or has been based on patents — ^that is, that the articles made or the machinery for making them are or have been subject to patent — then the enormous value of patents to the public begins to be appreciated.

The principle of our patent system was early recognized ; for instance, before the patent law of 1790 Massachusetts granted in 1786 a cash subsidy to Alexander and Robert Barr, of Scotland, and Mr. Orr, of East Bridgewater, Mass., to encourage the introduction of cotton-manufacturing machinery. This was done to carry into effect the wonderful inventions of Hargreaves and Arkwright. Aid was also granted later to Almy, Brown ' and Slater, who first manufactured cotton goods in Bhode Island, and subsequently the inventor Lowell, whose monument is one of the most thriving manufacturing cities in the Union, made his first loom, the model being completed in 1812. This he patented, and it marks an epoch in the manufacturing history of America.

8 SOME FAMOUS INVENT0B8.

Eli Whitney, whose name has for generations been a household word, was a poor lad ignorant of the cotton industry, and yet he invented the cotton gin in 1793, which made it possible to prepare cotton cheaply for manufacturing purposes, to supply the previously invented spinning-jenny and the subsequently improved loom, so that thus early, through the aid of the States and the protection of the patent system, was inaugurated an industry the importance of which can scarcely be realized. The history of the cotton industry is substantially a duplicate of all the other important manufactures of America.

The names of McCormack, Heines, Ketchum, Manny, Wood and others are familiar wherever mowing and reaping machines are known and the inventions relating to mowers and reapers and other agricultural instruments which have been fostered by the patent system would not probably be brought to public notice except for it and by reason of this protection. America now supplies agricultural machinery to the world, and not only that, but is able to produce crops at a price which defies competition and which enables American products to be sent to the four comers of the earth.

The career of Fulton in connection with steam navigation is well known, and the importance of his inventions is understood by every school-

SOME FAMOUS INVENTORS. 9

boy. All know how Singer, Howe, Wheeler, Wilson and others have made the sewing-machine known in every hamlet, not only in America, but in Europe; how modem processes, every one of which is or has been patented, have enabled America to ship iron and steel even to Great Britain, as well as to all other parts of the earth ; how American locomotives are now rolling through the wildernesses of Siberia and over the mountains of Japan ; how American boots and shoes are sold everywhere, and how every one of these industries has been made what it is by reason of improved machinery. Comparatively young i)eople can remember how boots and shoes were made by hand in scattered country districts until the introduction of the McKay machines subsequent to 1860, and immediately thereafter how important cities sprung up because the machinery made it possible to turn out the manufactures cheaply and in small localities.

It is as familiar as A, B, C how Morse and Bell and Edison and Thomson and other lesser lights have made the electric phenomena serviceable ; have ** harnessed the lightning'' and have made what was formerly a superstitious wonder a common vehicle of every-day use.

Most, if not all, of the men referred to above, together with others who are well known, would have lived and died poor were it not for the fact i

10 EFFECT OF PATENTS.

that the patent system has opened to them a laudable source of wealth. It must be remembered that while the patent system has been a blessing to these men, still the chief blessing has, after all, been to the American public, to whom the inventors have turned over the wonders of the nineteenth century, and by whom what were formerly luxuries are now brought to every household.

It cannot be contended that these industries would have been promoted by the expenditure of years of toil on the part of those individuals and the expenditures of vast treasures unless the patent system had offered reward for such endeavors and for such expenditures. From these sources have resulted the wonderful manufacturing conditions in America, and it seems clear that the patent system has been of more value to Americans than any other one thing.

Not only this, but the beneficent effects are felt in war as well as in peace. Every manufacturer and almost every firm now knows the difference between the work of a clodhopper from darkest Russia and that of an intelligent native American. The vast difference is due, in a great measure, to the fact that almost every American is at the present time more or less familiar with mechanics, owing to the wide distribution of mechanical inventions. As long

EFFECT OF PATENTS. 11

ago as the civil war it was found that every company contained men who could, when occasion required, rig up a locomotive, repair a telegraph line, send telegrams if necessary, run a printing office, or do anything which the occasion demanded. So, likewise, in the recent Spanish war, the great superiority of the American navy is said to lie principally in the fact that it was manned chiefly by mechanics who were familiar with mechanism and who could handle with effect machinery constituting a modem fighting navy.

It is, of course, understood that the part any one of the various industries plays or has played in American development is in many instances subject-matter for a volume itself, and the matter is only referred to here in a general way to illustrate the immensity of American manufactures and the fact that these manufactures have been introduced primarily by the American patent system.

Chapter III. Patents In The Nineteenth Centtjby And A Few Remarks To Manufa0tubeb8

We are apt to forget, surrounded as we are by the many comforts and inventions of the last few generations, that the dawn of the Nineteenth Century found mankind in about the same condition, so far as industrial development is concerned, as he was when the pyramids were built or when Phidias adorned Athens with the artistic treasures which were a copy for posterity.

The diflference was merely one of degree. The carrying trade of the world was done in ships which were the same in principle as those the hardy Norsemen navigated in their early trips to Newfoundland and the American Continent, and with which Columbus made his memorable voyage across the Atlantic. The student did not *'bum the midnight oil," but with difficulty perused his after-dark studies by the light of a pine knot or a tallow dip. One modem steamship like the *' Kaiser Wilhelm Der Grosse" will carry more merchandise in a year than peri

PATENTS OF THE NINETEENTH GENTUBT. 13

haps the whole commerce of America amounted to at the beginning of the century. Steam did not affect the ocean carrying trade, the land carrying trade or passenger traffic ; New York and Boston were far distant municipalities; Philadelphia was as far from New York as Denver is now. Communication was so slow and uncertain that only the most important events were attempted to be transmitted and the result was often disastrous. As late as the war of 1812, the most important battle was fought long after the treaty of peace had been agreed to. Our late war with Spain was fought and finished in two hemispheres in less time than it took to get a message to Europe and return. Practically everything consumed was of hand manufacture and mostly homemade.

The great industries of modem times were as yet undreamed of. It is said that the steel output of the United States for 1898 was greater than the steel manufacture from the time of Tubal Cain to the beginning of the Nineteenth Century.

Not one of the great enterprises of the present era had been inaugurated. The standard of living was low. Armies could be moved no quicker than in the days when Hannibal marched his legions from Spain to Italy, or when Julius Csesar made his wonderful march across the Alps. The telegraph, the telephone,

14 PATENTS OF THE NINETEENTH OENTUEY.

the electric light, the typewriter, the sewing machine, the mowing machine, the locomotive, the modern weaving machinery, in fact nearly everything of common and necessary use in the industrial arts, was as yet undiscovered.

Alfred Russell Wallace, who cooperated with Darwin in formulating the doctrine of the ** survival of the fittest'* and who is conspicuous as a writer of natural history and a great and scientific observer, says that the Nineteenth Century marks the most important epoch within the whole historic period or, perhaps, since the stone age. He calls it **The Age of Invention" and compares the beginning of this era with the introduction of fire.

To enumerate in these pages the many wonderf ul inventions or more than hint at their importance would require more space than could be given in a book of this character. The importance of the Nineteenth Century inventions, scientifically, industrially and socially, are well understood. But what is not understood and what has been generally overlooked is the fact that this supremely important period is due largely to the beneficent patent system of the most progressive nations. Naturally we find the most liberal patent system in the country which leads the procession in inventions.

It may be said that the patent system follows inventions, and while it is true that one is de-

STIMULUS KEGESSABY. 15

pendent on the other, still it is certain that nearly all the inventions which have done so much for the world and which have raised the standard of living and general intelligence would never have been commercially and practically developed were it not for the iniHal protection of the patent system.

It is not necessary to quote authorities to show that man is inherently selfish, and while he loves approbation, still he would never go to the extent to which most great inventors have had to go, would not have denied himself and his family, would not have labored for years at great expense and at great suffering in some cases, merely to secure the honor of bringing forth a great invention. It has required something in the nature of a pecuniary reward or, at least, something to hold out the hope of reward, to induce the inventor to properly develop his inventions and to exercise his ingenuity to the utmost.

It is common to laud the orator or the great general or some philanthropist far more than the inventor, but the real inventor is the king among men. He does not always invent a machine, but his breadth of mind and his sweep of view comprehend everything between heaven and earth. He fears nothing, not even ridicule, but has a mind open to discover truth whereever it may be found. He does not always in-

16 LITTLE THINGS.

vent a macMne. He may, like Homer or Milton, exercise Ms mental characteristics to -poxir forth songs to delight the ages. He may, like Galileo or Columbus or Copernicus, change the human idea of the universe, or he may, like Fulton or Morse, use his ingenuity to industrially help the race, but in every case the mental attitude and characteristics are the same.

It is to such men that the world should do homage.

Perhaps it may not api)ear at first view what this has to do with the commercial value of patents, but on an instant' s reflection it will be seen that these inventions, which really constitute the modern industrial fabric, have all been the means of colossal fortunes for those interested in them, especially in view of the fact that every great invention, instead of closing the avenue of inventive work along that line, has always opened a field which has been filled immediately by lesser inventions worthy, however, of commercial exploitation and, as a rule, profitable.

The smaller inventions are frequently in fact the most profitable to one whose means are somewhat limited, because they can be developed and exploited for a comparatively small sum, while the larger affairs usually require modest fortunes to show their worth or the lack of it.

LITTLE THINGS. 17

The "little things" are often *^the big things " in the aggregate.

Everyone knows how fortunes have been quickly made out of glove fasteners, shoe eyelets, and a hundred other "little things." A match is a little thing, but yet the match industry is large enough to absorb the attention of one of the great trusts of the country. And the industry is paying dividends on $18,000,000.

Everyone may not know that even the wooden toothpicks which are apparently so insignificant are made and sold in carload lots, and that all the machines for making them have been patented, while originally the toothpicks themselves were subject to patent. Clothespins, shoe nails and even peg wood for boots are all sold in immense quantities.

Several fortunes were made in the manufacture of pai)er collars. A good toy will usually reaUze a fortune for its promoters in a season or two. And so we might go on indefinitely. The point is that, if there is a reasonably large sale for an invention and it is properly protected, it is worthy of attention. If it is not or cannot be patented, it is not ordinarily worthy of attention for competition then reduces the price to practically the cost of the labor and material of which it is made.

A device, machine or process which is patented and which to any appreciable extent decreases

18 VALUE OF PATENT SYSTEM.

the cost of making any staple goods is of selfevident valae. Competition is so close that a small saving in cost of goods, or a means of making better goods at a given cost, is of great value, the value depending, of course, on the line of goods and the relative quantity consumed.

Nothing in the manufacturing line is so good as a good patented invention. Suppose, for instance, that the leading manufacturers in a certain line have pooled or formed a trust. Such a trust can easily, by their well-known methods, crush any outsider having only its facilities. But if the outsider gets control of a better article or a cheaper or better machine or process of manufacture, then the trust must make terms with him.

It will be seen that the patent protection offers alniost the only means of securing large profits on a reasonable investment so far as ordinary industrial business is concerned, that is, business ontside of the great monopolies which have absorbed certain lines of commerce.

There are only a few ways of avoiding this destructive competition. One is by combining or pooling all the industries of a certain kind in the form of a trust and another is to manufacture some articles on which there can be patent protection, or which have become known

VALUE OF PROPER PROTECTION. 19

and favored by the trade and are recognized by a lawfnl trade-mark.

This fact shonld make the manufacturers — and does make them — eager to take up a good invention and it should also cause them to be very careful to see that the invention is properly patented so that they can safely enter into its manufacture.

The alert inventor will also strive to invent along practical lines as pointed out in another chapter.

The manufacturer or inventor will likewise be on the lookout for the opportunity which may show itself but once and then momentarily ; and both knowing the many elusive qualities of patent rights and that a patent is a creature of statute, shaped in every instance more or less according to skill, should be careful to see that their interests are properly safeguarded. This can only be done by those skilled in such matters, and many an inventor, when the vaUdity and scope of his patent has been assailed or he wishes to sell his patent, has found that he has little or nothing of value for the reason that his application for a patent was not properly prepared and prosecuted while pending in the Patent Office.

Chapter IV. What 18 Patentable

In the United States patents are issued for a machine, an article of manufacture, an art or process, a composition of matter, a design.

Machine.— The Standard Dictionary defines a machine as any combination of inanimate mechanism for utilizing or applying power. This broad view is the one adopted by the Patent Office and the courts.

Any new and useful machine is patentable. As to utility, this may be nominal ; that is to say, if the machine is at all useful and is new, it is patentable, but the machine must be new or an improvement on existing machines. As to novelty, this does not usually consist in a wholly new machine, for it is very seldom that a machine is made with new parts. In fact, it is doubtful if one is ever made in which all the parts are new.

Usually a machine consists of a combination of elements old in themselves, but combined in a new way so as to accomplish a new result or

MAKUFACTUBE. 21

to accomplish an old result in a new or better way. The one essential is that there must be some new operative change fai the machine.

If the difference in construction between the new machine and the old is slight but the difference in results is obvious, then there is invention and the novelty contained in the structure is patentable. But let the machine be ever so new, its parts or operative means and not its principle must be claimed, and while a skillful attorney will draw claims broad enough to cover all analogous structures and so secure the field to the inventor, still, within the meaning of the United States Patent Law, one cannot claim a principle, as a principle is too indefinite and intangible to come within the scox>e of the claim.

Let it be borne in mind in connection with this subject and those immediately following, that an invention is not necessarily a new creation, but the inventor may simply perceive a means or a way of bettering mechanical contrivances and accomplish the result by improved means which involve sufficient novelty to come within the scope of the term invention and to entitle him to a patent. That is, the improved means involve something more than mere mechanical skill.

A Manufacture. — A manufacture is anything made by industrial art or processes or

22 CX)MPOSITION OP MATTBE.

skill, whether it be made by hand or by machinery. Generally speaking, an article of manufactore, as contemplated by the patent law, comprises any vendible article of trade or commerce which is not a machine or a composition of matter ; for example, a bag, a chadr, or a shoe is an article of manufacture.

.Composition of Matter.— Within the meaning of the patent law, a composition of matter is a combination of two or more substances making a substance which has some useful function. A well-known example of this kind is an explosive, a plating compound, a polishing substance, a substance for removing hair from hides or grease from leather, et cetera.