The Crisis in the American Patent System
Part I
This first section is part of a multi-part paper addressing the challenges presented by the American patent system. The first part is historical. The second part, to follow, addresses proposals pending before Congress in 2009 to improve the operation of the American patent law in the 21st century. A further part will provide a comparative analysis of the experience of Europe and Canada with the principles of “absolute novelty”, more precisely “absolute world novelty”, adopted in those jurisdictions in 1978 and 1989 respectively.
The Patent Crisis of the 1830s1
In the 1830s, the United States was undergoing a patent crisis. It is not the same patent crisis that it faces today, but something can be learned from what occurred in those most interesting years.
The Patent Act of 1790
On April 10, 1790, President Washington signed the first patent statute into law. The first patent statute did not create a Patent Office. It directed applicants to file a petition for a patent with the Secretary of State. Then the Secretary of State, the Secretary of War, and the Attorney General were to determine if they, or any two of them, thought “the invention or discovery sufficiently useful and important” to merit a patent.
The first officers given this duty were Secretary of State Thomas Jefferson, Secretary of War Henry Knox, and Attorney General Edmund Randolph. They called themselves collectively the “Commissioners for the Promotion of Useful Arts,” or the “Board of Arts,” although others called them the Patent Commission or Patent Board.
The Patent Act of 1790 did not satisfy applicants, and it did not satisfy those who were appointed to administer it. Applicants did not like the strictness with which the Patent Board determined who should and who should not receive patents. There was no appeal from the discretion of the Patent Board. The members of the Patent Board had high positions in the Government and did not have sufficient time to spare to run the patent system. Thomas Jefferson wrote a letter years later in 1813, stating that the investigations of patent applications had required more time than the members of the Patent Board could spare from their higher duties and that the applications had required a great deal of time to understand and treat with justice.
In a 1792 letter to Dr. Hugh Williamson, the chairman of a congressional committee to revise the patent law, Jefferson wrote that it distressed him to render crude and uninformed opinions on valuable and important rights without being able to devote the full attention that the petitions deserved. He drafted a bill to reform the patent law on December 1, 1791, and discussed it with Dr. Williamson. Mr. Jefferson’s bill would have eliminated all examination and made the Secretary of State the registrar of patents, with determinations of patent validity to be made by the courts.
While Mr. Jefferson’s bill as written was not introduced into Congress, some of its provisions were incorporated into a bill that was passed as the Act of February 21, 1793. It is likely that the primary reason for the Act of 1793 was not the dissatisfaction of inventors but was the inability of the Patent Board to administer the Act of 1790 while carrying out their other duties.
The Patent Act of 1793
The Act of 1793 continued in effect, with only relatively minor changes, through 1836. Meanwhile, the industrial revolution in America was well begun under this act, with all of its shortcomings.
The Act of 1793 went from the extreme of rigid examination to the opposite extreme of no examination at all. The Patent Board was abolished. The State Department was to register patents, and the courts were to determine whether the patents were valid after they had been granted. The State Department could not refuse to issue a patent. If a proper description and drawing were submitted, a model supplied, the proper allegations made in an affidavit, and the proper number of witnesses supplied, a patent would be issued.
About May 12, 1802. Dr. William Thornton was appointed as a chief clerk eventually designated as a Superintendent to be in charge of the patent work. When a patent was demanded, he was in the habit of doing a cautious examination of all that had been done in the same field before the receipt of the application. He recognized that these examinations were not required by law and were more duties of conscience than of office. He knew that the applicants did often not receive his resulting cautions with thanks, but he considered it proper to guard against deceptions. Inventors may begin by deceiving themselves as to the originality of their inventions, and end by deceiving their fellow citizens. He could not refuse a patent for lack of novelty, but could point out that lack.
There was no requirement that the applicant claim specific features of his device as the novel part of his invention. But Thornton still examined applications, comparing them with prior patents and with the large library of technology books kept for the purpose. When he found a good reference to anticipate an invention, he would write to the applicant, explaining the reference and pointing out how limited the patent on the invention would be if it were allowed to issue. Then, if the applicant still insisted on his patent, Dr. Thornton would write across the back of the issued patent the identity of the known references. If Thornton convinced the applicant to withdraw his application, he could return the payment (if the money sent by the applicant had had not already been paid into the Treasury).
On March 28, 1828, Dr. William Thornton, Superintendent of the Patent Office since 1802, died at his home in Washington, D.C. Upon Dr. Thornton’s death Dr. Thomas Jones was Superintendent of the Patent Office for two years, from 1828 to 1830, when he was succeeded by Dr. John D. Craig, who remained in office until 1835.
The first annual report on the condition of the Patent Office was issued in December 1829 by its then new Superintendent, Dr. John D. Craig. An examination of the record shows that Dr. Craig accomplished a lot during his tenure, but he was arrogant, subject to rages, disagreeable to patent applicants and their agents, and was a domineering tyrant toward the subordinate employees in the Patent Office.
By 1834, Congress was investigating the operation of patent office. In testimony given to a congressional committee Dr. Craig said that he did not take the trouble to read specifications. He believed interferences could occur only between applications that were filed or put in condition for allowance on the same day, which virtually never happened. Five years into his tenure, Dr. Craig had never submitted any applications to arbitration for interference. Craig believed that if an application was filed with all the proper papers and with the fees paid, a patent should issue, even if its contents were nonsense. The Act of 1793 intended that the courts should sort out such matters, not the Patent Office, and Dr. Craig had no intention of doing more work at the Patent Office than the law required.
The results of the investigation of the patent office and Dr. Craig were presented on March 15, 1834 by Mr. Aaron Dayton to the Secretary of State. Mr. Dayton found that Dr. Craig had indeed failed to declare interferences where it should have been done, that he had discontinued keeping the Caveat Book without which it would be impossible to carry out his duties properly, that he had unnecessarily and imprudently allowed correspondence of the office to be destroyed, that he had given applicants incorrect information from a misunderstanding of the law, and that he had been inattentive to duty in not reading specifications before issuing patents. The Secretary of State notified John D. Craig that he was dismissed. This was said to be because of his expressed belief that the rule forbidding clerks to receive money for assisting applicants was tyrannical.
Henry Ellsworth applied in January 1835 to be Commissioner under the Spanish treaty but instead was appointed Superintendent of the Patent Office. He took the oath of office on May 11. One of his early reports suggested that some revision to the patent law should be made to eliminate the need for signatures from so many officials, including the President. He noted that 50 patents were then awaiting the signature of the President.
John Ruggles was a lawyer who had been elected to the Maine legislature, rose to be Speaker of the Maine House of Representatives, and was later a Justice on the Maine Supreme Court. In 1835, he was appointed by the Maine legislature to be a U.S. Senator from Maine.
Based upon his own interest in obtaining a patent, on December 31, 1835 Senator Ruggles made a speech to the Senate to propose that a Senate Patent Committee be set up. He said that he had recently had business to transact at the Patent Office, and while there he had inquired into the causes of delays in issuing patents. His inquiry had revealed to him a number of defects in the patent laws, which had not been amended for nearly half a century except for extension of rights to certain foreigners.
Patents were issuing at the rate of 800 a year, with an increase to 1,000 a year expected within a year. Back when 50 patents a year were issued, it may have been appropriate to have each patent signed by the Secretary of State, the Attorney General, and the President of the United States, but by 1835 it took three months to get all of the necessary signatures to issue a patent.
Because the Patent Office officials had no discretion to refuse a patent for an invention that was not new or useful, applicants had been known to copy inventions on display in the model room and to request and receive a patent. This occurred despite knowledge of both the applicant and the Superintendent that the invention was not new. When the resulting patent was divided into license rights by states and counties, and the licenses for the fraudulent invention parceled out to ignorant buyers, who were shown documents signed by the President with the Great Seal of the United States, significant money could be made. Such fraudulent sales of licenses were estimated to amount to half a million dollars a year.
The proposed committee was set up, and Mr. Ruggles was made its chairman.
Mr. Ruggles made a formal inquiry to the Secretary of State for information on how the Patent Office should be reorganized. On January 29, 1836, Mr. Ellsworth as the then Superintendent of Patents wrote a long responsive letter to Secretary Forsyth, setting forth all of the defects and suggesting corrections. This letter was apparently derived from the suggestions that one Charles Michael Keller, a patent office machinist, had made to Ellsworth. Keller, then 25, had been working at the Patent Office since 1822 where he even as a boy had replaced his father as a machinist when his father died. By 1835 he was the longest serving employee in the Patent Office. Keller had been assigned the duty of advising applicants concerning requirement for novelty of their inventions, failing which their patents would be invalid and unenforceable even though granted.
The Act of 1793 had intended the Patent Office to issue any patent properly applied for, and to leave it to the courts to sort out who should have what rights. But matters had reached such a stage that, while 800 patents a year were being granted, there were currently more than 100 suits pending in court regarding the rights of patentees. Mr. Ellsworth predicted that such suits could only increase until some methods were provided to stop the frauds now openly practiced on the patent system.
The issuance of patents to pirates was a common occurrence, and indeed the Patent Office furnished every facility to aid them. Copies of models of previous inventions were made in the model rooms and used to demand patents for similar inventions next door in the Superintendent’s Office. Even when an applicant was told that his invention was a direct copy of a previous invention, as had happened the previous week, he demanded and obtained his patent for the same invention. With the Great Seal and the signature of the President on his pirated patent, the pirate patentee could sell state, town and county rights all over the country to people who thought that the Great Seal and the signature of the President actually meant that the patent was valid. The present system provided a rich harvest for lawyers, but ruin for many an honest mechanic.
Jefferson had suggested in 1813 that the head of the Patent Bureau be given discretion to prevent the issuance of a patent which interfered with an earlier patent or which was destitute of novelty. Mr. Ellsworth repeated the suggestion. He wanted scientific men to be induced to take positions in the Patent Office as Examiners of Patents, to have a suitable library to aid them in their examination of applications to detect interference with other patents or want of novelty. Mr. Ellsworth had recently found in a German book a complete anticipation of a recently issued U.S. patent. He wanted the Patent Office to have a good library to aid in examination of patents.
In a comparison of the merits of the United States patent system with that of England, Mr. Ellsworth pointed out that in the last 60 days he had issued more than 200 patents, which was greater than the annual average in England for the last 10 years. England allowed patents for newly imported inventions, but Mr. Ellsworth considered that the reading spirit of the people of the United States was such that it was evidently better to confine patents here to new discoveries. The temptation to patent in this country was such that it might be well to compel each patentee to publish, if not his entire specification, at least his specific claim of novelty.
Mr. Ellsworth recommended that a small portion of the surplus money obtained from patent applications be used to publish all specifications of patents, or at least the claims under the patents. If the material thus published were distributed to the different states, the public would be well capable of guarding against spurious patents.
Working with this letter and their own ideas, Senator John Ruggles and Patent Office machinist Charles M. Keller labored together late into the night for many weeks to write a new patent law. Mr. Ruggles, as a former Justice of the Maine Supreme Court, taught Mr. Keller a new respect for jurisprudence that led later to a career in patent law. Mr. Keller, experienced for years since childhood in dealing with inventors visiting the Patent Office, must have taught Mr. Ruggles some of the intricacies of dealing with inventors and inventions.
By late April 1836, the select committee had prepared its report on the Patent Office. After reviewing the history of foreign patent laws and of the current U.S. patent statute, they discussed the frauds being committed because of the inability of the Patent Office to refuse applications without merit. They recommended examination of patent applications and the raising of the new organization above a mere clerkship.
The select committee presented a draft statute to establish a Patent Office under the Department of State, to be headed by a Commissioner of Patents, to have an extensive library of scientific works and periodical publications, and, in addition to the necessary clerks, draftsman, machinist and messenger, to have an examiner of patents, the first anywhere in the world, to read patent applications, compare them with what was known in this country or contained in a printed publication anywhere prior to the applicant’s discovery, or in public use or on sale apart from cases with the applicant’s consent prior to the application, and to reject those applications in which the invention was not new.
A statute as requested by the select committee was passed by Congress and signed into law on July 4, 1836. In the first part of the year 1836, under the old system 625 patents were granted, while in the last of the same year, under the new law, there were only 97, more than two- thirds of all the applications made being rejected for either want of novelty or usefulness.
This statute, sixty years to the day after the original Declaration of American Independence, was a second such declaration. Some historians have said it was the most important thing to happen in the country between the War of 1812 and the Civil War. The first Declaration of Independence led to America’s political independence from England. This second Declaration led to America’s industrial independence from Europe. It gave America such an overwhelming advantage in national industrialization that European nations did not at first understand what had happened.
American industrial progress was attributed to the native mechanical abilities of Americans. But as Abraham Lincoln was later to say, “the patent system added the fuel of interest to the fire of genius.” Now, much more than ever before, it was possible for an inventive genius to profit by making and promoting an invention, which of course induced men to do so. By the beginning of the twentieth century, most of the industrialized countries in the world had copied significant parts of a statute which was written by a lawyer with an interest in his own invention and by a boy genius who started working in the Patent Office because his father could not afford to give him a good formal education and had to teach him by example.
David J. French
Ottawa, Canada
www.CanadaPatentBlog.com