Patents as a factor in manufacturing

Preface

The purpose of this volume, as indicated by the author at the outset, and emphasized again in the conclusion, is not in any sense to make the inventor or the manufacturer his own patent lawyer. It is rather to convey an idea of the nature of a patent, the protection it may afford, the advantages it may possess for meeting certain commercial conditions, the safety which may be secured in relations between employers and employees, and the general rules by which the courts will proceed in upholding the patent and in thwarting attempted infringements; to show the manufacturer, in a general way, what may be accomplished by patents, but not to lead him to attempt such accomplishment without legal advice.

The design is especially to lay down the fundamental principles so that they may be grasped clearly and fully enough to direct rightly the course of the inventor, patentee, or manufacturer in the early steps which are usually taken before the advice of counsel is secured. With these points clearly in mind, the procedure may be carried forward so as to avoid the most common pitfalls, and

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8 PREFACE

the reader may be clearly warned when and where it is necessary to call in expert advice.

In the preparation of the work the author has been guided by the results of wide practice, both in mechanical engineering and in patent law. The subject matter has been carefully prepared in view of his experience in patenting, litigating, and establishing many well-known inventions, and covers the points which leading cases have shown to be important and which conferences with clients have shown to be most necessary to establish in the lay mind. To the inventor and the patentee the most significant portion will be the clear outline of the precautions which should be taken in the preliminary steps, the rules and principles by which safe advance may be made up to a certain point, and the demonstration of the great advantage as well as the necessity of securing competent legal assistance in carrying the matter through -the Patent Office. To the manufacturer, equal or greater significance will appear in the demonstration of the great commercial advantages which may be secured by proper use of patents in the shop, in dealing with employees, in the sales office, and indeed in the creation and pre-emption of valuable markets.

THE EDITOR*

Chapter I. Influence Of Patents In Controlling A Market

How Patents Have Controlled Competition in American Industries — Their Importance Recognized by Framers of the Constitution — Examples of Great Business Successes founded on Patents — Patents the Only Legal Monopolies — Their Range as Defined in Leading Decisions — How They May be Effectively Employed — Importance of Having Knowledge of the General Principles — The Scope of the Present Book Outlined 13

Chapter II. Subject, Nature, And Claim Of A Patent

The Four Classes of Inventions for Which Patents Are Granted — Definitions and Examples of Each Class — Illustrations from Leading Cases — When New Elements or New Combinations Are Patentable — The Nature of a Patent — What is Required of the Inventor — Prior Use Explained — Legal Effect of Grant of a Patent — The Claims of a Patent — What They Are Required to State — Common Misconceptions— How to Make Claims Comprehensive — Examples of Good and Bad Forms — Essential Elements of the Best Form for a Claim — What the Courts Have Held — Essential Importance of Skill and Foresight in Drawing a Patent — Proceedings in the Patent Office. . . ..... 20

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CHAPTER III. WHAT PROTECTION A PATENT AFFORDS The Terms of the Grant of a Patent — Extensions Possible only by Special Act of Congress — Why Almost Never Granted — How the Grant Is Legally Construed — Separate Monopolies Obtainable for Making, Using and Selling a Patented Article — Examples from Actual Cases — How Rights May Be Restricted as to Territory or Time — Separate Rights to Same Invention May Be Sold in Different Industries— Patent Licenses May Be Restricted as to Price, Uses, Resale, etc. — Examples from Commercial Cases that Have Been Litigated — Far-Reaching Use of Patent Rights to Secure Monopoly by Licenses— Trade Combinations under Patents Are Legal — Striking Examples from Actual Practice 38

Chapter IV. Of Infringements

When a Patent Is Infringed — Presumption in Favor of Validity and Against Prior Use — Defenses Open to an Alleged Infringer — Defenses Which the Court Will or Will not Hear — Examples from Leading Cases — Interpretation of the Claim of a Patent — How the Courts Will Construe Favorably to the Patentee — Instances of Valid and Invalid Claims — Infringement by a Structure Equivalent to the Patented Structure but Avoiding the Terms of the Claim — Examples — Principles Adopted by the Courts in Such Cases — Avoiding Infringement by Limiting the Claim by the Former Art — Ruling of the Courts — Infringement by Improvements — Avoiding Infringement by Omitting an Element of the Claim — The Courts will Read an Element into, but Usually not out of, a Claim — What Range of Equivalents the Court' will Grant to a Patentee — Process Claim May Be Infringed even when Different Apparatus Is Used — Repair and Reconstruction

CONTENTS 1 1

of Patented Devices — How Restricted — Contributory Infringements — How Enjoined — Patentee Protected Against Unlicensed Home Manufacture of his Invention for Sale Abroad — Against Unlicensed Foreign Manufacture for Import — Injunctions and Damages — Marking of Patented Articles — Design Patents 50

Chapter V. Patenting A New Product

What Protection Is Possible for Monopoly of a New Product— The Three Direct Forms and Two Indirect — Examples — Patents on the Product — Patents on the Process — Patents on the Machine Which Makes the Product — Patents on the Blank from Which the Product is Made — Protection by Tying the Product up with Another Patent — Effects and Desirability of Each Mode — Precautions to Be Observed — Investigations Necessary — Rights of Part Owners of a Patent — Avoidance of Claims of Older Products or Processes — Time Allowed before Patents Must Issue — Summary 69

Chapter VI. Patent Relations Op Employer And Employee

The Three Principal Points in These Relations- Employees' Inventions; the General Rulings of the Court in Leading Cases — When the Employer Will Be Held to Be the Inventor — In Whose Names Patents Must Be Taken — The Law of Inventions Made by an Employee — Examples of Valid and Invalid Contracts — Important Decisions Illustrating the Accepted Points — Contracts the Employer Should Make with Employees Covering Inventions — Employer's and Employee's Liability as to Infringements— Employees, if Vested with Discretion, May Be Enjoined — Liability of Foremen and Mechanics,

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How Limited — Summary of the Points upon Which a Manufacturer Should Be Well advised as to the Law of Patents 84

Chapter VII. Contests Between Rival Claimants To An Invention

Patent Office Contests Usually Decided by Early History of the Invention Before it Reaches the Patent Office — Inventor Should Understand General Principles and Direct His Procedure Accordingly from the Outset — The Elements of the Inventive Act — Mental Conception and Reduction to Practice — Illustrations from Well-Known Inventions — Diligence Necessary in Reducing an Invention to Practice — The Nature of the Conception of an Invention — Illustrations from Leading Cases — How the Date of Conception May Be Proved — Special Instructions for Inventors — Caveats; Their Use and Their Disadvantages— The Reduction of an Invention to Practice— How Made Safest and Most Complete — Danger of Discrediting a Reduction to Practice by the Inventor's After-Conduct — A Successful Working Model May Constitute Reduction to Practice — Physical Reduction to Practice not Always Essential — Illustrative Cases — Diligence; How Construed in Patent Clases — Interferences and Contests Between Rival Claimants — Guiding Principles Followed by the Patent Office— Preliminary Statements; What They Must Contain — Typical Cases Illustrated by Diagrams 103

PATENTS AS A FACTOR IN MANU- FACTURING.

Chapter I. Introductory; Influence Of Patents In Controlling A Market

PATENTS have been one of the most important factors in the growth of the United States from a group of poverty-stricken, non-manufacturing dependencies to the greatest manufacturing country in the world. In fact the late Senator 0. H. Platt of Connecticut, one of the profoundest minds in the United States Senate for the past thirty years, maintained that the American patent system has been the greatest factor in the material development of the nation.

The framers of the Constitution of the United States thought the encouragement of inventing of sufficient importance to provide in the Constitution for the granting of patents. George Washington gave his personal attention to the granting of at least one patent, and one is still in existence which bears his signature. Originally the President, the Secretary of State and the Attorney General, as a board, granted all patents, until patents became sufficiently numerous to require more attention than they could give to the matter. Patents are the subjects of important and exhaustively considered treaties between the principal countries. Almost all civilized countries have patent systems, even including Japan.

Patents are the best and most effective means of controlling competition. They occasionally give absolute command of the market, enabling their owner to name the price without regard to cost of production, as for example where they cover all known forms of devices for accomplishing a given purpose. There are a number of great companies whose position commercially is, or has been, due almost wholly to the possession of controlling patents.

Among such corporations are the Bell Telephone Company, which, while it does not now depend largely upon its patents, was able to control the situation absolutely for many years, and to get itself so well located that it now has a practical monopoly in many cities, because of its being the first to occupy the field. The United Shoe Machinery Company is today in control of the manufacture and sale, or licensing, of the bulk of shoe-making machines, because of its patents; and this control,

CONTROLLING THE MARKET 15

although several serious attempts to break it have been made by concerns heavily backed with money, the owners of the patents have been able to maintain. Ninety per cent of the welt shoes made in the United States are sewed upon machines which the United Shoe Machinery Company has been able to protect by means of its patents. The Westinghouse Air Brake Company built itself up on patents. Patents have played an important part in the development of the Westinghouse Electric and Manufacturing Company and the General Electric Company. They have indeed become so well recognized a factor in commerce that these concerns, and many others, keep a large corps of inventors at work with a view constantly to improve their product so that they will be able to offer a product that is at least slightly better than that of their competitors, and which is so protected by patents that they do not have to compete with an article of equal merit. The time when the patents on their present products will expire is constantly kept in view, and they endeavor to have new ideas, similarly protected and ready to put on the market when the patents under which they are at present working shall have expired.

The reader will be able to recall many devices and processes which are now, or until recently have been, entirely within the control of a single concern. Take, for instance, the most successful forms of any of the following devices : the air brake, the cash register, the steel car, the most popular stopper for beer bottles, the form of shoe-lasting machine most in use, the process of making the best armor plate, the commercial process of making calcium carbide, from which acetylene gas is generated, as well as the commercial form of the carbide itself; the incandescent gas-lamp, the phonograph and the graphophone. Even if a patent covers only the single feature of a device which makes it commercially the most desirable of its kind, still such a patent, so far as holding the market at the old price is concerned, often gives a complete monopoly. A patent covering a process or a machine for making a staple article, which process or machine effects such a saving in the cost of production as to enable its owner to undersell all others at a fair profit to himself, is as valuable, while that condition lasts, as a patent on the article itself, for the effect is to give him control of the market.

Patents are the only legal form of absolute monopoly. And they are absolute so far as they go. In a recent decision the court said:

Within his domain, the patentee is czar. The people must take the invention on the terms he dictates or let it alone for seventeen years. This

CONTROLLING THE MARKET 17

is a necessity from the nature of the grant. Cries of restraint of trade and impairment of the freedom of sales are unavailing, because for the promotion of the useful arts the constitution and statutes authorize this very monopoly.

The possession of suitable patents is, therefore, of great importance to the manufacturer. On the other hand, it is equally important to the manufacturer whose competitor has patents, to understand what limitations, if any, there are to his competitor's advantage, and how, if at all, a counter-advantage may be gained.

If a manufacturer develops an invention of value, he should patent it, even though he might not care to be able to prevent his competitors from using it ; because, if he does not patent it, someone else may patent it and may then sue for an injunction to prevent his use of the invention, and it is much cheaper to patent an invention than to defend a suit for infringement of someone's else patent. This is not at all an impossible occurrence, but has actually happened.

Having shown from this brief sketch the importance of the subject, the purpose and scope of this book may thus be stated :

I have found, in my practice of the law, that many — in fact most — owners of patents and of patentable- inventions do not fully understand what their rights are under their patents ; what, for instance, can be accomplished by means of them; how they can be bought and sold; how, while getting all the benefit possible in their own arts, those who own patents can sometimes make money out of their patents by permitting others to use the invention in other and non-competing arts; to whom an invention belongs that is worked out by an employee; how to protect oneself from being supplanted by improvements made by one's own employees ; how to prevent a manufacturer's product from being used in a way not intended, or sold at a price below that desired by the patent owner.

As the rights to a contested patent — that is, a patent which is being contested for by two or more inventors — depend upon acts which took place before the inventor came into the patent office by his application for patent, it is highly important that he should know how to manage these previous acts so as to put himself in the best position to win the contest. It is, therefore, important that those interested in patents should know the principles upon which these contests are decided.

While I do not aim to make the manufacturer his own lawyer, I do wish to open his eyes to what it is possible to do in connection with patents, not for the purpose of his doing it unguided by legal

CONTROLLING THE MARKET 19

advice, but of suggesting to him to what ends to ask such advice. There are many manufacturers who could and would strengthen their position commercially through patents, if they but saw the neglected material at hand, or understood the fuller possibilities of material, of the availability of which they are already partially aware. With this introductory definition and limitation of purpose, therefore, I shall outline briefly and generally the nature and scope of a patent, the protection it affords, infringements and their remedies, the patenting of a new product, the patent relations between employer and employee, and contests ,_hftt.wppn rival claimants to an invention, with the principles settled in each case by rulings of the United States courts.

Chapter II. The Subject, Nature, And Claim Of A Patent

FIRST we must fix in our minds what things may be the subjects of patents. There are four classes of inventions for which patents are granted, viz, arts, machines, manufactures and compositions of matter. It is not intended to give exact definitions of these classes of inventions, but merely to illustrate their scope, so that a manufacturer may be led to inquire whether or not an invention that falls under his control is patentable. My observation has been that the mistake is often made of failing to patent inventions which might have been patented, but which the layman decided for himself were not patentable.

With this explanation, I may say that an art may be any process, or series of steps or operations, for accomplishing a physical or chemical result. As examples may be mentioned : the art of telephoning by causing undulations of the electric current corresponding to the sound waves of the spoken voice; or of casting car wheels, which consists in causing a jet of molten metal to enter the mold in a tangential direction to give the metal a whirling motion, so that the heavy sound metal will flow to the rim of the wheel and the cinders and bubbles will thus not occur on the rim. J The patentability of a process does not depend on the apparatus with which it is carried out. The apparatus may be old, and the process may consist in a new way of using old apparatus. The fact that no new mechanism may be required in practicing the process is apt to mislead the manufacturer into thinking there is no patentable invention present. In the case of the process of casting car wheels, the same old mold and ladle could be used, and the invention consisted in holding the ladle so that the metal would strike the mold tangentially and thus get whirling motion in the mold, instead of simply pouring the metal straight in, which would mix the cinders, bubbles, and sound metal together.

A manufacture is anything made by the hand of man that is not an art, machine, or composition of matter. A safety pin, a tooth brush, and a whistle are all articles of manufacture.

A machine is any assemblage of mechanical elements having a law of action of its own. A steam engine and a jack knife are both machines. The distinction between an article of manufacture and a machine is not important.

A composition of matter is any mixture or combination of chemical elements, whether solid, liquid, or gaseous; such as calcium carbide, from which acetylene is made, acetylene itself, a soap, or a tool steel.

A new combination of old elements may be patentable, if it produces a new or improved result, or an old result in a new way. For instance, a lamp making an annular flame with a central draft was old. Lamps with a solid flame using a chimney were old. The chimney on the lamp with the annular flame produced a highly beneficial result, and this new combination of old elements was patentable.

A combination of elements may be patentable as a whole, and some of its sub-combinations may be patentable. For instance, if a machine formed staples out of wire and inserted the staples through the eye of a shoe button and fastened the button on a shoe, the machine as a whole might be patentable, and the sub-combination of elements which formed the staple might also be patentable by themselves, so that if anyone used this sub-combination to make staples for use in fastening carpets to the floor, the sub-combination would be infringed.

A new form of an element of a combination that is old as a whole may be patentable. Improvements and attachments on old machines may be patentable. Edison, Blake, and Berliner all improved the Bell telephone and all received patents for their improvements. As later pointed out, however, merely improving the invention of a prior patentee does not give the improver a right to use the principle of the earlier invention without permission from the patentee.

A new use of an old device or machine or process may be patentable, if the new use is so different from the old use as not to be obvious to an ordinary skilled workman in the art. There was no successful machine for attaching stays to the corners of paper boxes. Such a machine was invented and patented and suit for infringement brought; the defense was that the machine was almost identical with a machine for addressing newspapers, and that it did not require the genius of an inventor to make the changes necessary to adapt it to attach box stays instead of strips having addresses on them to newspaper wrappers. It was shown that several of the addressing machines had been on the market for many years. The Supreme Court said, notwithstanding this fact :

It never seems to have occurred to anyone engaged in the manufacture of paper boxes that they could be made available for the purpose of attaching strips to the corners of such boxes. This very fact is evidence that the man who discovered the possibility of their adaptation to their new use was gifted with the prescience of an inventor. While none of the elements of the new machine taken separately or perhaps in a somewhat similar combination was new, their adaptation to this new use and the minor changes required for that purpose resulted in the establishment of practically a new industry and was a decided step in advance of any that had heretofore been made.

***** with all the anticipating devices before us, it is apparent that the mere change in the shape of the die was a minor part of the work involved in so changing the addressing machine as to make it perform a wholly different function, the invention consisting rather in the idea that such change could be made, than in making the necessary mechanical alterations.

In such a case, and with all subjects of patents, the courts require that the alleged invention or discovery be one that is not obvious to the ordinary skilled workman in the particular art, and they hold it must be so far from obvious as to require the exercise of the inventive faculty. The new use must be so far from obvious from a knowledge of the old use of the machine, that it would not occur to the ordinary skilled workman in an art.

The substitution of one old material for another may be patentable, although ordinarily it is not patentable. The substitution of rubber in the stud of a stocking supporter for metal or wood, was held to be patentable, because it made a successful supporter which would neither let the stocking slip nor tear it, and this, although everyone knew that rub-

UNIVERSITY ber clings to cloth and would not tear it as readily as metal. This was an exceptional case, however, because the invention although greatly desired and long striven for, had not before been produced.

The Patent Office recently held it to be patentable to substitute forged steel for cast steel in a one-piece body of a safe. It may be patentable to use an old process for a new purpose, just as much as to use an old machine.

There was a peculiar construction of tooth which had been used in a horse rake. A tooth of like construction was used in a weeding machine, but in the weeding machine it had an action which, if present in the horse rake, would have been a disadvantage. It was held that it was patentable to use the old tooth in the weeding machine.

In finishing diamonds of the larger sizes and poorer colors, it is customary to divide the diamond into a number of pieces to make several smaller diamonds, because the poor color is less noticeable in a smaller diamond than in a larger one and because there is little sale for large diamonds of poor color. A patent was obtained for a process of dividing the larger diamonds into smaller diamonds, by which a considerably larger weight of smaller diamonds was obtained than by the previous processes for this purpose. In defense to a suit for infringement, it was shown that the same procedure was old in sawing up wood for certain purposes, and that the old wooden procedure was for the purpose of saving material. The court, however, held that diamond cutting and wood sawing were so far from being analogous arts, that the old wood process did not invalidate the diamond process.

There is no rule by which all cases can be judged, but each case is decided on its own merits. If an invention has long been sought for without success, the courts will usually sustain the patent, no matter how obvious the invention appears after it has been disclosed.

THE NATURE OF A PATENT.

A patent is a public grant, in the nature of a contract between the Government and the inventor. The inventor on his part is required to disclose fully a new and useful invention or discovery which he has made himself. If the invention is not new to the public at the time the inventor makes his invention, then the inventor has given nothing to the public which it did not already have. If the inventor has kept back some essential part of the invention, so that he has not fully put the public into possession of a knowledge of the invention; if the invention is not operative, or is injurious to the public health or morals, so that it is not useful ; if the patentee did not invent or discover the invention, but learned of it from others — then in all these cases he has not given the public a proper consideration for the patent, and the patent is invalid.

The law also requires that the invention shall not have been described in a printed publication or have been in public use or on sale for more than two years before the inventor filed his application.

While a prior public use of an invention will invalidate a patent, a prior secret use of an invention will not invalidate a patent to a subsequent original inventor. The reason is that the public, not having had access to the secret use, may never know of it, and is no better off than if the invention had never been made, and that knowledge of the invention may pass out of existence by the death of those who practice it secretly. Therefore, the law rewards the subsequent inventor, who not only makes the invention but gives a knowledge of it to the public. For instance, there was a man who invented a shoe-making machine, and he not only invented it, but he built a number of the machines and stored them away. His machine was useful only in connection with another machine on which the patent (which belonged to someone else) had not yet expired. He therefore could not sell his machine until the patent on the prior machine expired, and if he took the patent out on his own machine before the expiration of the earlier patent, the portion of the life of his patent overlapping the earlier patent would be unproductive. Restored his machines away, intending to wait the expiration of the patent and then to patent his machine and put it on the market. While, however, he was concealing his machines, another inventor invented the same machine and applied for a patent. In a contest which subsequently arose, the second inventor was awarded the patent.

A patent consists of a deed, signed and sealed by the Commissioner of Patents, granting to the inventor the exclusive right for seventeen years to make, use, and sell the invention, and referring to the attached specifications and drawings (if there be drawings) for a disclosure and definition of the invention.

The grant of a patent purports, as just stated, to give the inventor the right to make, use, and sell the invention; but in legal effect it really gives him only the exclusive right to prevent others from making, using, and selling the invention. If his invention happens to embody the principle of some invention that is covered by a previous patent, the owner of the previous patent can prevent the making, using, and selling of any embodiment of the later invention using the earlier principle, and the later patentee must either make terms with the earlier patentee or wait until the earlier patent is dead. But the later patentee can prevent the earlier patentee or anyone else from using the later invention during the life of the later patent. This situation arose when Edison, Blake, and Berliner improved the Bell telephone. Their telephones were immeasurably better than Bell's telephone, and yet they all embodied the principle which Bell had patented. Therefore, none of these improvers could use his telephone without Bell's permission, and the result was that their patents came under the control of the owners of the Bell patents.

THE CLAIM OF A PATENT.

As some, and even the greater part, of the machine, or other device shown in a patent may be old and not patentable, and the part invented by the patentee may be, and usually is, less than the whole, the patentee is required to state in terms just what his invention consists in, and such a statement or statements are called " claims. " This is so that the public may know what it is free to make, use and sell, and what it must let alone. In the early days of our patent system there was no way by which it could be told from the patent itself what was public property and what was not, and the patent was held to cover all that it showed, minus whatever the defense showed to be old. This was so unsatisfactory a method that the patentee was afterwards required to point out the part, improvement, or combination to which his improvement related, and it is the clauses in which he thus delineates his invention that are called "claims."