Practical Pointers for Patentees.
by Franklin Cresee.
PREFACE
The original conception and working out of an invention is usually a labor of love on the part of the inventor: having perfected his invention in every detail, he finds able and skilled counsel waiting to prepare and prosecute his application for patent before the Patent Office Examiner. When the patent is allowed or issued, the patentee"s real work begins--that of turning the patent into money. This is the business end of the inventor"s work, which is generally to his interest financially to undertake himself, or to have under his immediate supervision.
The object of this little work, based upon the experience and observation of the author and other successful inventors, is to give the patentee such information and advice as will enable him to proceed more intelligently, on the most successful and economical basis, to realize from his invention.
The American Government issues annually over thirty-five thousand patents, a large number of which are offered for sale by their respective patentees, who in many cases have no definite lines to pursue in negotiating their patents; many realizing little or nothing from their inventions through careless or bad management, while others, through incompetency, drift into the hands of unscrupulous patent-selling agents only to be swindled.
The numerous inquiries from patentees seeking practical, reliable, and up-to-date information as to the best and most successful methods of realizing from the product of their ingenuity, has led the author, after due deliberation, to prepare and present this work to the American inventor, with a view of supplying a long-felt want, with the hope that it will save them many expensive experiments in handling their patents, and advance them on the road to success.
It has been the endeavor of the writer to cover briefly every subject that is usually encountered by patentees in disposing of their patents, not only in the matter of selling, but also in the equally important and perplexing questions of arriving at the value of patents, legal forms, statistics, etc., etc.
Realizing that the work may be deficient in many respects, the hope that it will prove instructive, and the belief that it contains many practical pointers for patentees is still entertained by
THE AUTHOR.
CHAPTER I
DEMAND FOR INVENTIONS OF MERIT
That there is a demand for inventions of merit which can be readily disposed of at a reasonable profit to the inventor, there can be no doubt. There perhaps never was a time in the history of our country when the demand for meritorious inventions was so great as the present. The conveniences of mankind, in all his varied vocations and callings, require continual changes and improvements in the apparatuses and implements used in order to save time, labor, and expense, and to keep pace with the never-ceasing progress of civilization.
At no time in the past has there been so deep an interest manifested by the public generally in the inventions of our bright-minded men and women, and at no time has capital been more readily interested and ready to invest in any practical improvement which can offer a fair chance of monopoly under the patent laws.
Business men, capitalists, and manufacturers are ever on the alert for new and desirable inventions, which will supersede in utility those which are already on the market. By purchasing such inventions, they secure novelties which will not only enable them to avoid the keen compet.i.tion and to a great extent monopolize the trade in their own respective lines of business, but also to make sales more easily, and thus make their business more profitable.
[Sidenote: Monopoly in Patents.]
Every well-informed person knows that a monopoly is the desideratum of business men. The monopoly or protection of an industry afforded by the patent laws is, perhaps, the one monopoly that directly benefits the world. Were it not for the protection and monopoly offered inventors by governments, for a certain number of years, to disclose their inventions, inventors would simply keep them secret, or if used at all, would do so only in such a manner as would prevent the world at large from learning of or utilizing them, thus debarring the public as a whole from their benefits. This monopoly in patents has had much to do with the material progress of the world during the century just ended.
Anyone having a monopoly of a good trade article is a.s.sured of a fortune. If capitalists and manufacturers can secure the control of any new invention of merit for their sole use and purposes, which can be manufactured and sold more cheaply than those now on the market, and which will perform its work in a quicker and better manner than the devices now in use, they will be only too willing to pay patentees handsomely for patents covering such inventions.
There are numerous staple articles of commerce whose manufacture is open to all, and which every mercantile house in the country is handling at a profit, notwithstanding the great number engaged in their manufacture and sale in every section of the country. Now, if there can be supplied some better or cheaper article in any line of industry, the firm or person who secures the monopoly of its manufacture and sale, simply controls the market, and human endurance and energy are the only limits to the degree of profits such a firm or person can secure from the manufacture and sale of such an article, if adequately protected by a valid patent.
[Sidenote: Industrial Progress Based on the Patent System.]
In an official report the Commissioner of Patents clearly sets forth that from six to seven eighths of the entire manufacturing capital of the United States is either directly or indirectly based upon patents.
This vast amount of money, upward of six thousand millions of dollars, continually employing great armies of people, in industries based upon patents of every cla.s.s, supplies the country with improved articles of every description. It has been well said that, "Patents and trade go hand in hand."
The largest and most opulent manufacturers in the country will be found to be the heaviest owners of patents, developers of inventions, and patrons of the Patent Office. While all inventions are not telegraphs, telephones, sewing-machines, or electric lights; nor can all business houses be Westinghouses, Hoes, McCormicks, Bells, or Edisons, yet all over this country, and others as well, there are springing up a great number of moderately large growing firms who, ever on the alert for success, devise or secure control of some valuable patent, by which they can successfully invade and control to a certain extent particular lines of industry.
Nearly every leading factory in the world owes its commencement and success to the prestige and protection afforded by the possession of a good and valid patent.
CHAPTER II
INCOME FROM INVENTIONS
It has been aptly said that the products of all the gold, silver, and diamond mines in the world would not equal in value the annual income of American inventors. It has been carefully estimated that there are at least fifty patents in the United States which yield over $1,000,000 annually, some 300 that yield over one-half million, from 500 to 800 which bring from $250,000 to $500,000, and between 15,000 and 20,000 that bring over $100,000 annuities. Besides these, there are thousands upon thousands of patents which yield yearly more profit to their fortunate possessors than could be acc.u.mulated in a lifetime by a wage-earner.
[Sidenote: Independence through Successful Invention.]
There are thousands of patents sold outright every year by the patentees of the United States for thousands of dollars; and, to the already long list of successful inventors, each year adds many more, who have become independent through the proper handling of the product of their ingenuity. Indeed there can hardly be conceived a quicker way for the average person to attain independence and wealth than by inventing something of real worth and merit that can be quickly turned into money.
The inventive field is large, and each invention opens up a new field for improvements, and it is the "improver," without question, that reaps the greatest benefit from any invention. Owing to the ever forward progress of civilization, there is no limit to the possible improvements in the sciences, arts, and manufactures.
[Sidenote: Unprofitable Patents.]
It must, however, be borne in mind that all patents are not remunerative, neither are all gold mines productive of fortunes, and one may lose money in patents as well as in any other business. There are thousands of patents, many having merit no doubt, which have never been sufficiently brought before the public to test their merits, effect their sale, or manufacture; this in many instances is owing to incompetency, or bad management on the part of the patentee or his agents. There are thousands of other patents that do not prove remunerative because they do not supply a real want, while still others are such slight improvements upon existing inventions that they necessitate such narrow claims, which render the patent of little or no value. One has only to look over the weekly issue of patents to see many of the last cla.s.s.
As before stated, while there are many thousands of patents that do not pay--and many no doubt cause their owners disaster, as is the case in any other business or investment; on the other hand, the far greater proportion of patents granted are productive of handsome profits, if properly managed.
[Sidenote: Money in Patents.]
That the majority of patents taken out prove lucrative is evident from the fact that upward of seventy thousand applications for patents and designs are filed each year in the United States Patent Office, and approximately eight hundred are granted and issued each week. Probably about one-fifth of these patentees obtain their patents with a definite view of manufacturing their inventions, and the remainder obtain theirs with a view of realizing from the sale of the rights to manufacture.
It may be said, as a general thing, there is more money in small inventions than in larger ones, from the fact that they can be easily manufactured anywhere with but little outlay of capital; they usually fill a general need, and the profit derived from their manufacture is large, besides the patent is more readily disposed of; while with larger inventions it requires more money and ability in handling the patent, and the invention must be unusually promising to justify the erection of a plant costing thousands of dollars for its manufacture. However, when large and complicated inventions do pay, they usually pay well.
[Sidenote: Business Capacity of the Inventor.]
It must be remembered that the actual cash value of a patent is not in the patent itself, but in the sale or use of the monopoly it affords, and the amount realized from any invention frequently depends upon the business capacity of the inventor or his agents. Owing to his business ability, one person may make a fortune out of an unpromising improvement, while another, through bad or careless management, will realize little or nothing from a brilliant invention.
Speaking along this line in an official report the chief examiner of the Patent Office says: "A patent, if it is worth anything, when properly managed, is worth and can easily be sold for from $1,000 to $50,000.
These remarks only apply to patents of ordinary or minor value. They do not include such as the telegraph, the planing machine, and the rubber patents, which are worth millions each. A few cases of the first kind will better ill.u.s.trate my meaning:
"A man obtained a patent for a slight improvement in straw cutters, took a model of his invention through the Western States, and after a tour of eight months returned with $40,000 in cash or its equivalent.
"Another inventor in about fifteen months made sales that brought him $60,000, his invention being a machine to thrash and clean grain. A third obtained a patent for a printing ink, and refused $50,000, and finally sold it for about $60,000.
"These are ordinary cases of minor inventions embracing no very considerable inventive powers and of which hundreds go out from the Patent Office every year. Experience shows that the most profitable patents are those which contain very little real invention, and are to a superficial observer of little value."
Under the writer"s personal observation has come many instances where inventors have secured patents on improvements which to a casual observer would appear insignificant, yet through shrewd management they have been made to yield princely incomes. Among these one case worthy of note is that of a young man in Pennsylvania who secured a patent on a toy game which any person could have thought of, but few would have considered worth protecting by letters patent. He was offered $1,000 for the patent by one manufacturer at the outset which he refused, and afterward he placed it on royalty with quite a number of large manufacturers throughout the country. He receives but one cent on each one manufactured, yet his income averages over $12,000 a year. Another borrowed part of the money with which to obtain a patent on a railway tie plate, which was bought by a corporation for $25,000, after having manufactured it for two years on royalty. And many others, who have realized from one to five thousand dollars on such slight improvements on which few would have thought worth applying for a patent.
Patentees who would realize any considerable amount from their patents must not sit down and expect the other fellow to make money out of their inventions for them.
[Sidenote: Inventions as a Poor Man"s Opportunity to Advance.]
Invention is sometimes called the "genius of the poor," and it is a singular fact that there are a greater number of inventions made by men and women of limited means than by those whose wealth, education, and other advantages would seem to have especially fitted them for success in a field dominated so completely by "brains." This may be explained in a measure by the fact that people of moderate means are brought into closer contact with the arts and manufactures, and are thus the first to discover and improve their defects.