Patents and the Public
RECENTLY the Supreme Court of the United States rendered a decision in what is known as the Mimeograph Case, which not only reasserts a patentee’s undisputed right to impose extraordinary conditions upon the use of his machine, but affirms his equal right to control the supply of materials to be used in its operations. This radical extension of the patent right was the startling feature of the decision, but its plain restatement of a patentee’s dictatorial powers over his invention seems to have been even more effective in arousing the public mind to a sense of the alarming possibilities contained in every patent issued. The added prerogative falls rather as the proverbial ‘last straw’ upon an already intolerable situation, and the public rises to inquire, ‘ What is back of these grants, so freely handed over to inventors?’
The object of our patent system, as stated in the Constitution, is ‘to promote the progress of Science and Useful Arts.’ That is, in order to get inventions for public use, the patent laws were made for the encouragement of inventors. The community’s interest in new discoveries is, theoretically, the prime consideration; the reward to the inventor is no more than a just and agreeable means to attain the desired end.
But our patent law, as it has come finally to be construed, is singularly oblivious of the public. It devotes itself exclusively to the patentee. It does not reward the inventor and take over the invention; it awards him the invention itself for a period of seventeen years, and makes no demand upon him to administer it for the public good, or, indeed, to administer it at all. Instance any patented improvement: suppose manufacturers engaged in the particular line adopt the device in their machinery or process, in their desire to market a more perfect article, — the one attainment which really interests the public. The law interferes. But it does not say to the manufacturers, ‘ You must pay a reasonable tribute to the inventor before you may make this improved device’; it says, ‘You must stop making the device.’ And there it rests. In proclaiming a new and useful invention by publishing the patent, the government merely informs us of one more thing which we may not use. It leaves the public at the inventor’s doorstep, expectant, but unassured of admittance.
Then, in what manner, and to what advantage, we may participate in the discovery, depends on the inventor’s ability and disposition to provide adequate facilities for its production; to interest the necessary capital; so to perfect the device in details and workmanship that it may attain its highest usefulness; to secure for it adequate publicity and distribution throughout the country. The price is of his making; he may elect to sell it under any sort of restrictive condition his fancy dictates, or not to sell it at all, but rent it, on terms laid down by himself. If, as often happens, selfish interests are to gain thereby, he or his assignees may suppress the invention altogether, and it must remain legally buried for seventeen years, although published to the world in letters-patent.
No wonder we are a nation of patentees. The imagination of young America is fired by the prospect of easy fortunes under the seventeen-year monopoly. Untrained minds are led to imagine riches in fantastic contrivances, much as children see diamonds in glittering stones which their elders do not find worth picking up. So the flood of applications pours in upon the patent-office at the rate of two hundred per day. Nearly half are denied patents, and out of the hundred successful applications come possibly ten successful patents.
The average citizen is easily misled by this formidable record of inventive genius. He points with pride to a result made up of ninety per cent waste. It is as plain as daylight that the patent system encourages invention, but inventions are without value to the community except as they are set to work ‘ to promote the progress of Science and Useful Arts.’ We need to be reminded that for this end the patent laws were devised. We are so accustomed to regard the encouragement of invention as the complete function of the patent laws, and are so impressed by the bulky output, that only on special occasion, when one of our supposedly beneficent creations ‘shows its teeth,’ does it occur to us to ask, ‘Where do we come in?’
Take as the first case that of the independent inventor who devises a valuable improvement. He may realize his inability single-handed to serve a great country with his invention; if he attempts the feat, the country is dependent upon the one source, more or less feeble. He is confronted by the probability of infringement, with its attendant difficulties ; the law attempts to give him a control of his invention so absolute and so arbitrary that he, individually, cannot hope to maintain it. Almost invariably he does the best thing an inventor can do for his own interest, — he sells his patent to some company or corporation far better equipped than he to get the utmost out of his remarkable grant. The public rarely has an opportunity to reward an inventor; he gets a few hundred dollars, or a few thousand, from his assignees, and then the community pays tribute for seventeen years, not for the encouragement of inventors, but for the encouragement of men of extraordinary business ability who could not tell, offhand, the difference between a cotterpin and a crank-shaft.
But the large majority of successful inventions do not even originate outside corporation influence. The real business of inventing is done, and will continue to be done, in increasing measure, within the industries. Here, also, the inventor rarely gets more than a small share of the tribute paid under the patent system. Workable ideas usually originate with workmen. While some of these inventing workmen are at liberty to take out patents independently, their inclination is to sell to their employers. But many of them are not independent.
It has become the custom among large employers to require of their employees a contract that any inventions they may make during their term of employment shall be assigned to the employer, under a stipulated reward in money or increased wages. In addition to this arrangement with their workmen, manufacturers engaged in work involving a knowledge of the sciences, such as the great telephone, electric, and chemical companies, almost without exception maintain extensive laboratories, presided over by salaried men selected for their originality and technical skill, who devote their entire time to the development of new devices and processes. Every idea evolved in these laboratories, and by the subsidized workmen in the shops, the employer makes the subject of a patent, in the endeavor not only to perfect his own product, but to prevent his rivals from perfecting their product.
In this contest the community suffers. Each manufacturer in a given line may use only such patented improvements as he himself controls; for the other portions of his machine or process he must confine himself to unpatented principles, or to combinations on which the patents have expired. The machine of each manufacturer has its good features, but no single machine may have all the good features. The product cannot rise to the standard of which the industry is really capable. Our patent system thus obstructs the approach to perfection. It is easy to imagine the owner of a meritorious idea so handicapped in his choice of necessary mechanism as to make his machine unmarketable, and thus a valuable improvement upon a given machine may be forever lost in the mediocrity of its remaining parts. In this instance the law defeats its own purpose.
The anomalous situations imposed by conflicting patents have led logically to great combinations of manufacturers, — combinations originally entered into, perhaps, for the purpose of perfecting machines and processes by a union of patents, but which, having incidentally added to their monopoly of patents the advantage of lessened competition, have borne heavily upon the public.
Unlike the monopolies which maintain their advantage by the abuse of well-intentioned laws, the patent owner’s is a strictly legal monopoly that cannot be investigated and need not be reasonable.
A single circumstance of doubtful virtue intervenes to prevent untold excesses on the part, of patent owners, — the possibility of infringement by other manufacturers. So clumsily designed and administered are the laws against infringement that no sooner is the value of a patent recognized than it is infringed upon, if its owner’s manipulation of it gives opportunity to make the adventure profitable; but a wise patent owner knows that the nearer he confines his demands to a competitive basis, the less he will have to contend with infringement. Thus the public profits by his selfish discretion. A strict enforcement of the patent laws would be a national calamity; but we may hardly pride ourselves on this escape from extortion through the violation of laws.
Some may wonder why we continue a system so imperfectly serving its intended beneficiaries, the inventor and the community. We suffer in this, as in other respects, from laws which have outlived the conditions that made them necessary. Some of our land laws were kept alive by land speculators long after their constructive usefulness had ceased. The great ‘protected’ manufacturers now threaten to strangle us with the very line that we threw out to them in their struggling infancy. Among these survivals, the patent laws are the most ancient. In the essentials they remain as originally drafted from the patent systems of Europe.
Doubtless there was once a time when the simplest way to encourage an inventor was to give him the exclusive right to make the device for his neighbors. Until comparatively recent times every important discovery necessitated the founding of a new industry. Exclusive privileges were properly granted to encourage the investment of capital in untried enterprises. But in the present highly-developed state of the industries, these conditions have ceased to exist. Scarcely an invention is now made that would not fall naturally within the lines of some established industry, equipped and eager to serve it to the public. Is it reasonable to suppose that the industry and eighty millions of people are going to await the uncertain movements of one man for their participation in the discovery? Experience has shown that they do not. It is very true that we have profited immensely from inventions, even if at a great disadvantage, and we owe much to the patent law for the inspiration it has been to inventors; but beyond this single virtue, our patent system works directly against the natural, effective, and economical delivery of new inventions to the community, and holds for the inventor no certainty of reward in proportion to the value of his discovery. Both are at the mercy of the middle-man.
Now suppose we were to get away from ancient traditions, and construct a patent system adapted to the present day. The inventor wants compensation for his discovery; give him compensation,— not the discovery. The community wants the discovery; although the plain teaching of our patent law makes it heresy to say so, the community is entitled to it. Both ends can be attained at once by making the discovery public, in fact, as well as in letters-patent, to all who may wish to make use of it, with the single obligation that they shall pay to the inventor legally determined royalties during the life of his patent.
Under our present system, the most fortunate inventors are those who succeed in establishing their patents on a royalty basis. The law might as well bring this opportunity to every inventor, with the added advantage to him and the community that, instead of being restricted to one licensee, both would do business with an entire industry. The royalties, carefully graded to provide just compensation, would be paid to the inventors, and a penalty for not so paying them would enforce this reasonable exaction. New inventions, at once engaging the attention of experienced manufacturers throughout the country, would automatically come before the public in their most perfected form, through well-established channels, and under conditions assuring competitive terms, plus the royalties. The inventor would not of necessity be forced to go into business, or to sell his rights for an arbitrary price. His inclination would be to retain his patent, supplement its publication by advertising it to the industry likely to be interested, and gather direct from it such reward as his invention might merit.
Various objections may be made to the proposed plan. It may be contended that with the right to manufacture conferred promiscuously, many would be able to evade the payment of the royalty. Lawlessness under no system could exceed the present riot of infringement. Infringement is encouraged not only by the inadequacy of the laws against it, but even more by the impossibility of securing on any terms the right to use improvements patented to rival concerns. With that right granted by law to all manufacturers alike, and the royalty fixed by law, the royalty would generally be paid, and it is safe to assert that the penalty for non-payment need not even be severe.
The difficulty of devising just royalties may be interposed. No more rigid and arbitrary compensation can be conceived than the present unqualified grant of the discovery itself for the set term of seventeen years. Far more equitable would be a scale of royalties based upon classification, cost of article, and other obvious factors. A study of the numerous instances in which inventions are now being worked on a royalty basis, would greatly assist in devising a satisfactory scale. To provide for special cases in which the royalties might work a hardship, either to the inventor or to the community, there could be a commission to which either might appeal for a proper readjustment.
Perhaps the most plausible argument that may be urged against the proposed system is that in some instances a new device needs to be practically demonstrated before the public will awake to its merits,—an expensive undertaking, inadequately met by the prospect of future royalties. Under the new encouragement given by the legal right to make use of any patent, very rarely would a valuable idea escape interested manufacturers; and if a certain amount of demonstration were necessary, that, expense could be undertaken with a view to the later general adoption of the discovery, and regarded as one means of advertising it. Then would follow the inventor’s reward, in proportion to the real value of his invention.
If the objection be raised that manufacturers would cease to subsidize their workmen, discharge their salaried investigators, and close their laboratories, if the discoveries made were to be placed at the disposal of their rivals, a sufficient answer is that the business of inventing among them is little dependent upon the patent laws. Patent laws bring forth patents galore; necessity is still the mother of invention. It is safe to say that, such are the exigencies of modern manufacturing, not one laboratory would be closed, nor a single inventive workman disregarded. Each manufacturer would secure to himself the advantage over his rivals of the fixed royalties upon his patents, — a just compensation for his encouragement of invention, but not an exclusive monopoly.
Under this system of compensation by royalty, the rights granted in a patent would be less preposterous, less attractive to dangerous exploiters, yet far more certain to bring returns to the inventor. Now, if we can thus easily provide a more just reward for the inventor, and a more advantageous participation for ourselves, why — except that the custom of ages holds us — should we sit by while men who never invent make invention their tool for getting a non-competitive grip on the community?
The road to this reform is a rocky one, for it leads directly through the sacred preserves of the patent-protected monopolies. They will put up a tearful plea for the inventor, and point out cases in which inventors themselves have succeeded in reaping enormous profits for the full period of seventeen years. But extortion at the hands of an inventor is not a bit less unpleasant and unjust than at the hands of a combination of men. The killing monopoly latent in every patent issued is the thing aimed at, no matter who develops it. It merely happens that, for reasons already set forth, nineteen twentieths of this evil are due to assigned patents.
So changed are the conditions now surrounding invention and industry that it has become a public duty to reconstruct our patent system so that it shall primarily ‘ promote the progress of Science and Useful Arts,’ and also provide a reward for invention which the inventor himself may reasonably hope to secure.