Scientific American, v 46 (ns) no 7, p 96, 18 February 1882
The Relation of the Government to Patentees
In the recent decision of the Supreme Court in the case of James vs. Campbell, two or three points are incidentally touched upon which very materially affect the interests of patentees in their relation to the government, especially when their inventions are such as to make them useful or necessary to the government. One is a positive ruling that the government has no right to use a patented invention without compensation to the owner of the patent; another is a query as to the propriety and probable success of a suit against the officer using the invention; and the third is a plainly expressed doubt as to whether the Court of Claims has jurisdiction when a claim is based on an unauthorized use of an invention by a government officer.
On these points the opinion of the court runs as follows: "That the government of the United States, when it grants letters patent for a new invention or discovery in the arts, confers upon the patentee an exclusive property in the patented invention, which cannot be appropriated or used by the government itself without just compensation any more than it can appropriate to use without compensation land which has been patented to a private purchaser, we have no doubt. The Constitution gives Congress power 'to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries,' which could not be effected if the government had a reserved right to publish such writings or to use such inventions without the consent of the owner.
After mentioning certain classes of inventions useful only to the government, and the usual course of the government in dealing with their inventors, the court continues: "The United States has no such prerogative as that which is claimed by the sovereigns of England, by which it can reserve to itself, either expressly or by implication, a superior dominion and use in that which it grants by letters patent to those who entitle themselves to such grants. The government of the United States, as well as the citizen, is subject to the Constitution, and when it grants a patent the grantee is entitled to it as a matter of right, and does not receive it, as was originally supposed to be the case in England, as a matter of grace and favor."
But while the government, through its officers, has no right to use a patented invention without payment, there would appear to be no statute forbidding an infringement of an inventor's patent by an officer acting for the government, nor any statute to determine the mode by which a patentee may seek compensation for the use of his invention without his consent. The court said:
"The most proper forum for such a claim is the Court of Claims, if that court has the requisite jurisdiction. As its jurisdiction does not extend to torts, there might be some difficulty as the law now stands in prosecuting in that court a claim for the unauthorized use of a patented invention, although, where the tort is waived and the claim is placed on the footing of an implied contract, we understand that the court has in several instances entertained the jurisdiction."
The question of the jurisdiction of the Court of Claims has never been brought before the Supreme Court, and the court naturally declined to pass upon it until properly called upon.
If, however, the Court of Claims has no jurisdiction in such cases; and if, as the Supreme Court now intimates, the inventor is not likely to obtain redress by suit against the officer by whom the infringement is made (no statutory provisions having been made for such a suit), there would seem to be here an occasion for early Congressional action.
The country has need just now of inventions of use chiefly to the government, notably in the matter of coast defense; and it is not very encouraging to inventors to know that in case of an unauthorized use of their inventions by a public officer, there are no assured means whereby they can stop the wrong or secure redress.
Proposed New Patent Department
To the Editor of the Scientific American
The bill Mr. Phelps presented December 13, 1881, is calculated to supply a desideratum long felt and not disputed by those best qualified to form an opinion. It is substantially what has been recommended to the consideration of Congress by almost every succeeding Commissioner of Patents and repeatedly urged by you, and is, in brief, simply a permission to the one self-supporting bureau to extend its revenue on means, perfectly understood and defined, for the proper administration of its duties. One of the most important of these means is a completely indexed digest of industrial art. With such a repository at their disposal inventors (who constitute the principal contributors to the fund), would be able to concentrate their energies on untrodden fields of discovery, by informing themselves of what others had already accomplished. Manufacturers and users of machinery could at a glance, so to speak, inform themselves of the best appliances. The community at large, which is the chief beneficiary of invention, would in this simple act of justice be largely benefited by the increased discrimination exercised in patent grants.
G. H. Knight
Cincinnati, January 30, 1882
Forty Years in the Patent Office
The last annual report of the Commissioner of Patents contains a comparative statement of the business of the office from 1837 to 1881 inclusive. Since 1840 the table shows the number of applications, the number of issues, the receipts, expenditures, and the surplus, where there has been any. Eight of these years (1837, '40, '41, '53, '54, '56, '57, '61) show a deficiency, the fees received being slightly less than the expenditures. Curiously the year 1855 shows a surplus of nearly $37,000, though the two preceding and two succeeding years were years of deficiency. In 1859 the surplus had risen to over $35,000. It dropped to $3,500 the next year, and the next shows a deficiency of $16,000. In 1862 the surplus was $33,000. It fell to $6,000 the next year; and in 1865 it leaped from $11,000 to nearly $75,000. This was nearly doubled the next year, and the year after (1867) it dropped to less than $8,000. Between '67 and '71 the surplus aggregated nearly half a million dollars. The next four years were lean, the surplus falling as low as $12,000 in 1873. Since 1876 the surplus has ranged from $100,000 to about $250,000, aggregating in six years nearly a million dollars.
The fluctuations in the number of patents applied for and issued have been much less marked, though considerable variations are noticeable. The number issued in 1837 was 435. The number of applications reached a thousand in 1844, and five years later the issues for the first time reached and slightly exceeded 1,000. The year 1855 saw the number of issues raised to 2,000. During the next ten years the increase was tolerably steady, rising to 9,458 in 1866. The number stood at thirteen hundred and odd pretty uniformly from 1867 until 1875, the number of applications varying not far from 20,000 a year. After two years of gain the number dropped off once more, remaining not far from 1,300 until 1880. Last year it rose to 16,584, with 26,059 applications.
The ratio between the number of applications and the number of grants has shown considerable variations. During the earlier years the proportion of rejections was much greater than at present, amounting to 1847 to two-thirds of the total applications. This, in the opinion of the Commissioner, is largely attributable to the fact that the earlier inventors had fewer opportunities for discovering what had already been done in the same fields of invention, and, as a consequence, presented a larger proportion of crude devices and repetitions of each other. Possibly the spirit of the Commissioner had more to do with the numerous rejections, some of them acting as though the business of the office was to restrain rather than to encourage inventors. During the past fifteen years, the ratio between the number of applications and the number of patents issued has been comparatively stable, and not far from three to two.
The total number of patents issued up to 1843 was less than three thousand. Ten years were required to raise the number to ten thousand. In the next ten years they rose to over forty thousand, and to a hundred thousand early in 1871. Since then the increase has been very rapid, more being issued between 1871 and 1880 than in the preceding thirty years.
To date about ten thousand patents have been reissued. The highest annual rate of reissue was reached in 1875 and 1876, when it exceeded six hundred. Since then there has been a marked decline, the number of reissues for 1881 being 471. The whole number of new patents issued last year was 16,113, of which 993 were taken by foreigners, chiefly citizens of Canada, England, Germany, and France. 4,638 patents issued during 1881.
Needs of the Patent Office
A considerable portion of the recent annual report of the Commissioner of Patents is properly devoted to a presentation of the urgent needs of the Patent Office for an increase in its working force and in the room provided for the transaction of its rapidly increasing business.
The receipts of the office during the past year were nearly $100,000 larger than in any previous year, and the excess of receipts over expenditures (nearly a quarter of a million dollars) was correspondingly greater than ever before. The Commissioner says frankly, "At the present rate of increase the number of applications for patents either the work must accumulate on the examiner's desks, or the quality of work done must be such as to bring discredit upon the thoroughness of official examinations."
The annual increase alone represents a number two-thirds as great as the annual number of patents applied for in 1861, when Congress appropriated money enough for the support of sixteen principal examiners, each with two assistants.
Now the office has twenty-six principal examiners, twenty-four of whom have three assistants each. Thus in twenty years the examining force has been just about doubled, while the number of applications has increased from 4,643 in 18161, to 26,059 in 1881, or nearly sixfold. Twenty years ago the examiners had to be familiar with 31,000 American patents; now the number of existing patents exceeds 250,000, and the examiners are expected to search them all, besides the largely increased number of foreign patents and scientific periodicals. The printing of specifications and the reproduction of drawings in convenient form have done much to simplify and expedite the work of the examiners; but the gain has not been at all proportional to the increase in the work to be done.
As the office was never designed to be a source of revenue to the government, justice to inventors requires that the fees charged for service shall be materially reduced, or else the surplus should be expended in making the work of the office more thorough and speedy. Public interest dictates rather the latter course. In view of these facts, the Commissioner's recommendation, that four additional examining divisions be created, each to consist of a principal examiner with three assistants, seems well within bounds.
Seeing that any mistake in the Patent Office is liable to be followed by costly litigation or worse, neither individual inventors nor the public at large can afford to have such mistakes occur; certainly not the inventors, who, during the past six years, have paid into the treasury, through the Patent Office, a million dollars more than the service of the office has cost the government.
Proposed Patent Legislation
Several bills of general interests to patentees are now awaiting action by the Committee on Patents.
Senate bill No. 1,226, introduced by Mr. Call, February 16, proposes to introduce a novel and questionable practice designed to limit the rights of owners of extended patents. It provides that when letters patent for a valuable invention have been extended, owing to the failure of the patentee to receive reasonable compensation for his invention in consequence of poverty and inability to manufacture and introduce his invention, the extended patent shall not give any right to the exclusive manufacture and sale of the invention. The manufacture and sale must be open to the public, subject only to the payment, to the inventor, of a royalty not exceeding for the first year a net amount of 20 per centum on the cost of the materials used in the manufacture of the article, and diminishing in a regular ratio each successive year during the life of the patent.
The bill further provides that in all cases where letters patent shall be extended under the provisions of the act, the Commissioner of Patents shall advertise the application for the space of three months in some newspaper of general circulation, and a hearing be given to all persons objecting to the extension; the applicant is allowed the right of appeal to the District Court of the United States for the District of Columbia, on giving bond for cost. The cost of the advertisement is to be paid by the inventor if he is able; if not it is to be paid out of the fund subject to the control of the Commissioner of Patents, and remain a lien in favor of the government on the patent until the same is paid.
A bill introduced by Mr. Platt, February 17 (S. 1,238), to regulate practice in suits for infringement where the purchase is made in good faith for the defendant's personal use, provides that if the plaintiff does not recover twenty dollars or over he shall have to pay costs, unless the defendant had actual notice of the existence of the patent or disputes the plaintiff's right to recover anything.
It further provides that when suit is brought against the defendant other than a manufacturer or seller the plaintiff shall first deposit with the clerk of the court the sum of fifty dollars as security for the costs and expenses of the defendant. In case the defendant prevails the deposit (or a "reasonable" part of it) is to be allowed by the court for counsel to the defendant, and the plaintiff will have to pay the costs in addition.
The obvious purpose of this bill is to repress suits against actually or suspected infringing uses of patented inventions; and while it may be calculated to prevent certain alleged abuses its discrimination against patentees of small inventions is certainly not in harmony with the general spirit of the patent laws.
In the House Mr. Skinner introduced February 13, a bill to limit the reissue of patents (H.R. 4,353). It forbids the reissue of patents except within three months of the issue of the patent in all new cases, and within three months of the passage of the proposed act in case of all patents already in existence.
The principle of limiting the period during which a patent may be surrendered for reissue is good; but it may reasonably be questioned whether a three month's limit is not too brief.
A bill introduced by Mr. Vance, February 20 (H.R. 4,573), makes it the duty of the Attorney General to take legal proceedings in equity in the Supreme Court of the District of Columbia to secure the annulling of any patent which he has ground for believing to have been procured by fraud or misrepresentation. In case the party at whose complaint the proceeding is begun fails to establish the invalidity of the patent he will have to pay the costs incurred by the Attorney General in the litigation.
Proposed Amendments of the Patent Laws
Elsewhere will be found the text of a bill (H.R. 4,949), introduced in the House of Representatives, March 6, by Mr. Morgan R. Wise. Most of its features are highly commendable.
The first clause aims to prevent fraud upon "innocent purchasers of patent rights" by making it the duty of intending purchasers of such rights to take reasonable precautions as any intelligent business man would be sure to take, or would regard himself foolishly careless if he did not take.
This clause strikes at the root of much of the complaints against the patent system. Men who stupidly or with criminal intent purchase alleged patent rights without investigation should blame themselves and not the Patent Office when their ventures prove unprofitable. They have no right to pose as innocent victims of the law, or to besiege Congress for relief from their folly at the cost of honest inventors and patentees.
The latter part of the section provides a fine not exceeding $1,000, or imprisonment not exceeding three months, or both, for fraud in the selling of patent rights by the use of forged or altered patent specifications, claims, or drawings.
The second section of the bill provides corresponding penalties for fraudulent patent sales, wherein the seller pretends to convey rights or privileges which have previously been disposed of, wholly or in part, to others.
Section 3 is designed to facilitate the work of the Patent Office, and enable it to comply with the terms of the law without antedating or reallowing patents the final fees for which are paid at the end of the six months' limit.
Section 4 makes it possible for the owner of a properly assigned patent to obtain a reissue without the signature of the inventor, who has ceased to be a party in interest.
Section 5 makes the life of an American patent absolute, and not as now contingent upon the life of any foreign patent upon the same matter which the inventor or another may have taken out. This is a proper and very desirable provision.
Section 6 contains two provisions, both commendable. The first is that a reissued patent shall not cover any machine or article the production of which was begun during the existence of the original patent, but not subject to it. When an inventor omits to claim what he might properly have claimed in a patent, it is fair that he be allowed to correct the oversight within a reasonable period; but it is not fair to allow him to make the correction the means of dispossessing or restraining another in an industry lawfully begun. The latter part of the section provides that the surrender of a patent for reissue shall not cause any forfeiture of rights which had accrued under the patent previous to its surrender.
Of the forepart of section 7 we cannot speak so favorably. It fixes a price for the Patent Office Gazette to American subscribers very much lower than its actual cost, and provides a higher rate for foreign subscribers. The office would receive no benefit from this discrimination, for the simple reason that the foreigner would buy through an American agent. The purpose of the diminished price is to diffuse mechanical knowledge and encourage invention. The diffusion of knowledge is no part of the function of the Patent Office; the encouragement of invention is; but the method prescribed by the Constitution for the carrying on of this desirable work does not include the publication at a loss of Official Gazette or any other literature, however valuable or useful.
The proposed reduction in the price of copies of patent specifications, claims, drawings, and related matters seems to be entirely reasonable. If incorporated into the patent laws the first section of the bill would create a largely increased demand for such papers, and the prices named would appear to be ample to cover cost.
The sections of the revised statutes which section 8 would repeal relate chiefly to the extension of patents granted prior to March 2, 1861 -- sections which expire by natural limitation this year.
The provisions of this bill, with the single exception noted, are so well calculated to "amend" the patent laws in the best sense of the word, that its early passage is much to be desired.
In place of the objectionable portion of section 7, we should be glad to see a clause making it the duty of the Commissioner of Patents to provide in the Patent Office better facilities for an examination of its records. The records are intended to be, and to a great extent are, open to public inspection; but in the absence of special provision for such work it is practically impossible for an inventor, an intending purchaser of patent rights, a manufacturer, a student of any department of invention, or other citizen, to make an examination of the records of the office that he can be sure is complete and thorough.
What is needed is a room or rooms set apart for the purpose indicated -- a place where the searcher could have brought to him for examination copies of every record relating to the subject which he is investigating: a room provided with complete indexes of all of the records of the office, in charge of attendants able to aid and advise the searcher, as a competent librarian aids the searcher for special information in a great library.
Something of this nature would be of great public utility, and the need of it must increase with time and the rapidly accumulating records of the office. The patents in many departments are now so numerous that even at the low price fixed for them in the bill at hand, few inventors could afford to buy them at all, and if they could it would in many cases be much more advantageous to search the records on the spot.
Nullification of the Patent Laws
Property, in law, has been defined to be the highest right a person has, or can have, to anything; and the labor of inventing, making, or producing anything is regarded as constituting one of the most indefeasible titles to property. Admitting this to be true, and that when letters patent are granted to an inventor he has a legal title given him for a specified term to the article or thing patented, which thus becomes his property, and that, in the words of the statute, an exclusive right is conferred upon him, his heirs, executors, and assigns, to "make, vend, and use" that which has been invented by him, it seems almost incredible that Congress should now attempt to put at defiance these plain principles of justice, and unblushingly assert itself the law-breaker as well as the law-maker, so far as the rights of inventors and patentees are concerned; nevertheless, such is literally the case.
A bill has recently passed the House of Representatives at Washington, nominally for the relief of innocent purchasers of patented articles, but virtually for robbing the patentee of the rights and privileges expressly awarded him by law. The bill reads thus: "That no action for damages or proceeding in equity shall be sustained, nor shall the party be held liable under Sections 4,919 or 4,921 of the Revised Statutes of the United States, for the use of any patented article or device, when it shall appear on the trial that the defendant in such action or proceeding purchased said article for a valuable consideration in the 'open market.'" This bill, fortunately, is not yet law, and there is little probability that the Senate will ever assent to so iniquitous a measure; but even if it should, there is not a question of doubt, but that the law would be declared unconstitutional by the Supreme Court.
In order that our readers may fully comprehend the character of the bill, we would state in plain English that it proposes to give any individual or corporation the right to use and hold, as against the real owner, property bought from a third party who had no title or claim to it, and who was unauthorized, either directly or indirectly, to dispose of it. This is simply to give "protection" to a purchaser who has unfortunately, or imprudently, by not exercising due diligence or making proper inquiries, bought from an irresponsible party that which did not belong to the vender. If patented articles can be thus bought and held, so should real estate, for both have equal rights as property. The law distinctly gives a patentee or his legal representatives the exclusive right to use as well as to make and vend the patented article; and no other person has the right to use it without the patentee's consent, no matter whether he be an innocent or a guilty purchaser. Were it otherwise, how easily might innocensy be assumed, and what latitude would be presented for the perpetration of fraud.
In the discussion of the bill, much stress was attempted to be laid by its advocates upon the purchasing in "open market" of the thing patented, as a ground of exemption from loss to the purchaser, and right to use and hold that which had been unlawfully sold; but when asked to define the term "open market." it was not found convenient or possible to do so. According to the theory of Mr. Burrows, of Michigan, it was "open market" for a set of men to go through the country with wagon-loads of gates and dispose of them to the farmers, who, after carelessly buying from these irresponsible dealers, find that they are amenable to the real owner by virtue of the patent which he holds. Denouncing these illegal venders and rightful patentees alike, this same gentleman concludes his tirade by stigmatizing them as insatiate vampires. Such language is much more emphatic than elegant or truthful.
We cannot do better than close these remarks by the following extracts from the speech of Mr. Reed, of Maine, who cogently though unsuccessfully opposed the bill: "The Constitution," said he, "has a right motive in protecting those men (the patentees), because the public get value received, and unless you pay the inventors, men will not invent. If you rob them of the proceeds of their invention after they have invented, you stop the business. And every man knows that notwithstanding the thousands of dollars that are taken away from innocent men by fraudulent practices, such as are complained of, there are millions of dollars conferred upon the public by this very inventive faculty. It is because inventors furnish a quid pro quo, it is because it is for the interest of the entire country to encourage invention, that the patent laws exist, and if you strip a man of his reward for his invention, you strip him of all incentive to exertion. What would this country be without the inventive faculty? Without the patent laws today it would be poor instead of being rich. We owe the cheapness of everything that enters into the production of our daily bread, of everything that we wear, of everything that we use, to the inventive power. Do not strike it down. It is not wise to do so."
The Patent Bill now before the Senate
To the Editor of the Scientific American:
It is said that a portion, at least, of the Senate Committee on Patents will report adversely on the H.R. bill No. 6.018 -- which aims to deprive patentees of remedy against "the user of any patented article or device that has been purchased for a valuable consideration on the open market" -- but that the measure will, nevertheless, probably pass the Senate under the same pressure which got it through the House. Different opinions seem to be entertained of the working of this measure, should it become a law. To the "Granger" and kindred organizations that have been instrumental in its and kindred origination and passage, and whose political influence it is intended to propitiate, it is supposed to seem the embodiment of legislative wisdom. These worthy citizens who are accustomed to exact the last penny for the usufructs of their special skill or industry may, possibly, not find the provision as plain sailing as they anticipate. For example, even admitting that the clause codicils all previous legislation which it contravenes, can be law be made to operate retrospectively? Can Congress abridge franchises already granted? See 4,884 Revised Statutes. Will then the contemplated statute -- in effect -- create two classes of patents, viz., those granted before and those granted after its passage? Will it or not be held conformable to the constitutional clause which says, "Congress shall have power ... to promote the progress of science and useful arts, by securing for limited times to authors and inventors the EXCLUSIVE RIGHT to their respective writings and discoveries."
For advocates of "the progress of science and useful arts,: whether inventors or not, the occasion seems opportune to memorialize Congress, and if need arise, the Executive, against precipitate action. Fairness and public expediency alike demand that the creators of conveniencies and their representatives be given a hearing in committee.
George H. Knight
Cincinnati, O., June 6, 1882