Patent System in the United States

Patents, and the Patent System (United States)

The following information about Patents, and the Patent System. is from the Cyclopaedia of Political Science, Political Economy, and the Political History of the United States by the Best American and European Writers (1899).

The patent system has assumed during the nineteenth century an important office in the economy of modern industrial communities. Its development is closely interwoven with the phenomenal material progress and the immense extension of applied science which distinguish that period. Especially has this system been identified with the extraordinary development of the physical resources of the United States. The patent laws have been extended and improved to meet or anticipate the wants of the growing nation, and now, in its more modern form, the patent system may almost be said to be a peculiarly American institution. It is estimated that at present more than two-fifths of the world’s important inventions originate in the United States. The records of our patent office are sought for and studied by the inventors and the scientists of every nation, and the wisdom of our advanced patent policy is almost universally admitted. Sir William Thomson said, in 1876:

If Europe does not amend its patent laws, America will speedily become the nursery of important inventions for the world.

No feature of our federal system has been proven of greater economic importance than the patent system. It will be treated, as fully as the limits of this article will permit, under the following heads:

I. History of the System in England and America; II. The Existing American Patent Law, and the Procedure under it; III. The General Policy of a System of Patent Laws; IV. Changes in the Existing Law which would be desirable; V. Foreign Patent Laws.

History of the System in England and America

In England

See patent System in England here.

In America

A few of the earlier British patents, as Cumberland’s patent (1720), were granted for Our said Kingdom of Great Britain, called England, our Dominion of Wales, and Town of Berwick-upon-Tweed; our Kingdom of Ireland, and our Colonies and Plantacions in America.

Letters patent for inventions appear also to have been granted by the different colonies before the revolution. In 1641, Samuel Winslow, of Massachusetts, obtained from the general court of that colony a patent for his process of making salt; and in 1656 a son of Gov. Winthrop obtained a patent for another salt making process. Patents were similarly granted in Connecticut during the colonial period; but no organized patent system existed here until after the establishment of the federal government. The basis of the American patent system is the clause in the United States constitution which confers upon 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.

Patents thus became the subject of federal legislation, and in pursuance of the power so delegated, congress has passed a series of patent laws, commencing with the act of 1790. Under this act letters patent were granted upon any useful art, manufacture, engine, machine or device, or any improvement therein, not before known or used, for any term not exceeding fourteen years.

The application for a patent was made to the secretary of war, the secretary of state and the attorney general, and it required the concurrent action of two of those officials to issue the patent. The specification or description of the invention was certified by the attorney general, and the patent on its issue was sealed with the great seal and signed by the president. No distinction was made in this act between foreigners and citizens, and there was no examination of the novelty or patentability of inventions. In 1793 a second act was passed superseding the former one, and making changes in the system. Patents were issued only to citizens of the United States, and applicants were [126] required, before United States patents could issue to them, to surrender any patents that might have been granted to them by the different states before the federal government was established. This statute also provided that the application should be made to the secretary of state, and that interferences between applications should be decided by a board of three arbitrators. A government fee of $30 was established, and a penalty of triple damages imposed on infringers. Supplemental acts were passed in 1794 and 1800, the latter of which extended patent privileges to aliens who at the time of making application had been for two years resident in the United States, and required all applications made pursuant to that act to be accompanied by an oath to the effect that, to the best of the applicant’s knowledge and belief, the invention had not been known or used in this or any foreign country.

A few years later the constitutional question arose whether a state still had power to grant patents, notwithstanding the provision of the constitution giving power of legislation on patents to congress. In 1798 an act had been passed by the New York legislature granting to Robert R. Livingston the sole and exclusive right and privilege of constructing, making, using, employing and navigating all and every species or kinds of boats or watercraft, which might be urged or impelled through the water, by the force of fire or steam, in all creeks, rivers, bays and waters whatsoever, within the territory and jurisdiction of this state, for the term of twenty years from the passage of the act, provided that he should, within twelve months, construct a boat of at least twenty tons capacity to be propelled by steam, the mean progress of which, against the current or tide of the Hudson river, should be not less than four miles an hour. Livingston having failed to accomplish this, the same provisions were re-enacted in 1803, and again in 1808, securing like privileges to Livingston and Robert Fulton. Steam navigation having now become an accomplished fact through the efforts of these men, others undertook, without license from them, to use the same motive power in navigating the Hudson.

Livingston and Fulton then applied to the state courts for an injunction, which was at first denied on the ground that the act of the New York legislature was contrary to the clause of the United States constitution giving congress power to legislate upon letters patent. But upon appeal, Thompson and Kent, JJ., held that the act was constitutional, on the ground that federal jurisdiction over patents was not exclusive, and the injunction was granted (Livingston vs. Van Ingen, 9 Johns, 506.) Similar privileges were then granted in Massachusetts, New Hampshire, Pennsylvania and Tennessee, to citizens of those States. The question of the constitutionality of this legislation was subsequently raised in the United States supreme court, in Gibbons vs. Ogden, 9 Wheat., 1. The precise point was not decided, however, the New York act being held to be unconstitutional, because in contravention of the laws of the United States regulating commerce. Since that time, however, notwithstanding the eminent dissenting authority of Chancellor Kent and Judge Tucker, the opinion has prevailed that federal jurisdiction over patents is exclusive, and the question must now be regarded as so settled.

-In 1819 a law was enacted by congress, giving the United States circuit courts original jurisdiction of all actions arising under the patent or copyright laws of the United States. The first provision for the reissue of defective patents was made in the act of 1832, which also provided for the annual publication of the lists of expired patents, and established a system of renewing or extending patents about to expire upon application to congress. Another statute, passed in 1832, extended patent privileges still further by permitting every resident alien who had duly made a preliminary declaration of his intention to become a citizen, to obtain patents on condition of introducing the inventions into public use in the United States within a year of the date of the patents.

More information about Patents, and the Patent System

Such was the earlier legislation of congress upon patents; and although many important inventions and discoveries were protected under these laws, the patent system as a whole remained as yet in a comparatively undeveloped state. It is stated that from 1790 till 1803 the whole business of issuing patents was practically done by one of the clerks in the department of state. In 1803 Dr. Thornton was appointed by Jefferson superintendent of this branch, and held the office until 1827. The whole number of patents issued from 1790 to 1836, a period of forty-six years, was only 10,020. The patent office now issues more than that number every year. During this period, however, the elementary principles of law governing patent rights were settled in the courts, and the foundation was laid in the decisions of Marshall and Story for the subsequent development of that branch of jurisprudence.

-The year 1836 marks an era in the development of the American system. In that year an act was passed which superseded the earlier legislation, and in an elaborate series of provisions, brought the patent system into something like its present condition The patent office was established as a branch of the department of state, and a staff of officials created, with the commissioner of patents at the head. The most important feature of the law was the provision requiring a preliminary examination to be made into the novelty and patentability of each invention before issuing the patent. This was a radical innovation, but it has proved a beneficent one. This law also made provision for the decision of interfering applications, and enabled aliens, after a year’s residence in the United States, and under the conditions of the former act, to take out patents. The government fee for citizens and resident aliens was fixed at $30, while for subjects of Great Britain it was $500, and for other aliens $300. The reissue practice was confirmed and extended, and provision was [127] made for the filing of caveats on incompleted inventions.

The recovery in suits for infringement was restricted to the actual damage proven, except in cases where exemplary damages were proper, when triple damages were allowed. Exclusive jurisdiction in patent causes was conferred upon the United States circuit courts, and a board, consisting of the commissioner of patents, the secretary of state and the solicitor of the treasury, was constituted for the purpose of hearing and passing upon applications for the extension of patents. In certain cases extensions of seven years were allowed. Provision was also made in this law for the record of assignments of patents, for the establishment of the patent office library, and for the exhibition of the models which had accumulated since the beginning of the system. In that same year (1836), however, the burning of the patent office destroyed the interesting collection of models, as well as many valuable records, of the earlier patent system.

A statute passed in the following year established a method of restoring or replacing the more important of the destroyed models and records, and also introduced the practice of filing disclaimers in cases where the original patents were void through inadvertently excessive claims. The act of 1839 provided that the existence of a foreign patent more than six months prior to application here, should not be a bar to obtaining a United States patent, except in cases where the invention had been introduced into common and public use in this country; but the United States patent was made to terminate fourteen years from the date of the foreign patent. A further provision of this act was that no patent shall be held to be invalid by reason of purchase, sale or use prior to the application for a patent, except on proof of abandonment of such invention to the public, or that such purchase, sale or prior use has been for more than two years prior to such application for a patent.

In 1842 provision was made for patenting designs for the term of seven years, and patented articles were required to be stamped Patented, with the date of patenting, for the neglect of which a penalty was imposed. The system was further extended by the acts of 1848 and 1849, which latter act made the patent office a branch of the department of the interior. Minor changes were made in the succeeding years, and in 1861 an important act was passed empowering the commissioner to establish rules governing procedure in the patent office. The term of patents for inventions was extended to its present length of seventeen years, and the former laws discriminating between citizens and aliens were repealed. A uniform scale of fees was adopted, like that now in force; and in interference cases witnesses were compelled to attend and testify as before a court.

A board of examiners in chief was constituted, intermediate between the examiners and the commissioner, to hear appeals from the former. Finally, by the act of 1870, the former legislation was revised and consolidated, and the system brought into its present condition. The provisions of this patent code are contained in some seventy sections, the effect of which will be considered under the statement of existing law. Meanwhile, the number of inventions has enormously increased. In 1837, 435 patents were issued; in 1860, 4,819; and in 1882, 18,467. These figures adequately represent the rate of the growth of the system and its present extent.

Existing Law and Procedure

Under the present act of congress any person who has invented or discovered any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement thereof, not known or used by others in this country, and not patented or described in any printed publication in this or any foreign country, before his invention or discovery thereof, and not in public use or on sale for more than two years prior to his application, unless the same is proved to have been abandoned, may, upon payment of the duty required by law and other due proceedings had, obtain a patent therefor.

Subject Matter

It will be observed that provision is made in the statute for patenting four classes of inventions or discoveries: arts, machines, manufactures, and compositions of matter.

-The statute term art is intended and construed to cover cases in which the essence of the invention consists in the mode, process or art of doing a thing or accomplishing a result, and not the particular machinery, apparatus or device employed. A mere abstract principle can not be the subject of a patent, nor is the function or abstract effect of a machine patentable. But the statutory expression covers and protects a comprehensive class of inventions which are combinations of arrangements and processes to work out new and useful results, and which are thus patentable irrespective of the particular forms of the instrumentalities used.

-Inventions included within the term machine are obviously those which consist of a particular mechanism or device, or a combination of mechanical devices or parts, as distinguished from a tool or instrument. To sustain a patent for a machine it is only necessary that the combination to produce certain effects be new, whether the separate devices or elements be new or old, provided that the combination is of such a nature that the inventive faculty was exercised in devising it; and, generally speaking, a machine is rightfully the subject of a patent whenever a new or an old effect is produced by mechanism new in its combinations, arrangements or mode of operation. (Curtis’ Law of Patents, 20.)

-The term manufacture is construed in the sense in which it is popularly used, to mean the product or fabric of a machine or of human art or industry. To be properly the subject of a patent as a manufacture, the product must itself be essentially new. Thus, an article in common use can not be patented as a new manufacture merely because it is fabricated by the use of new and improved machinery; nor is a product patentable under this head merely because a machine makes it more perfectly than it can be made without [128] a machine.

-The term composition of matter includes patent medicines and all compounds or mixtures of substances, as articles of food, etc. The resultant article or composition must, of course, be new, to be the subject of a patent, but the question is not, whether the ingredients or components are new, but whether there is novelty in the combination, and the novelty may consist in combining, in new proportions, ingredients which have already been in extensive and common use for the purpose of producing a similar composition.

-Besides the foregoing classes of the subject matter of patentable inventions, the statute provides for patenting improvements, and the larger number of patents are issued for improvements. It was early decided that a patent for the improvement of a machine is the same thing as a patent for an improved machine, but of course the patent can only be taken for the new combination. It should be noticed that the patent office does not undertake to determine whether the improvement will infringe an existing patent. But if the improvement is novel, the patent is issued and the question of infringement left to the courts. The test of the validity of a patent for an improvement of an existing machine, is to ascertain whether there has been actual and substantial change, or merely formal alteration requiring no invention. If no substantially new element has been added to the old machine, the patent can not be sustained; but if some really new feature has been introduced into the old mechanism, which causes it to operate differently or produces a new or better effect, then such addition will properly be the subject of a patent as an improvement. Two classes of questions therefore arise in passing upon the validity of a patent for an improvement of a machine. First, where the effects produced are the same, the inquiry is, whether the modus operandi of the improved machine is substantially the same as that of the old machine, or whether the difference in operation is sufficient to sustain a patent; second, where the effects produced by the improved and by the old machine are different, then the nature and quality of the effect will be the criterion of the validity of the patent. It should be added, that there is no distinction between an improvement on a patented machine and on one that is not patented.

The Role of Intermediaries in the Patent System

Patent intermediaries can play a useful social role. Inventors and buyers of patents (such as a
manufacturer who can commercialize patented inventions) may have a difficult time finding each
other because the potential usefulness of a patented technology is often not obvious, and often
depends on the complementarity between the protected technology and the buyer’s own
portfolio of technology.

In principle, illiquid markets such as the one for patents may benefit from specialized
intermediaries. These intermediaries bring value to society by more efficiently matching patent
holders to patent buyers, thereby fostering transfer of technology from inventors to those who
can use the technology to make products that are valuable to consumers. For example, an
individual inventor might sell a patented battery technology to an intermediary, who then sells or
licenses the patent to a cell-phone manufacturer who has both the equipment to make the battery
in large scale and the ability to market the advantages of the new battery when combined with
that phone.

This arrangement allows inventors to specialize in innovation and benefit from the specialized
commercial knowledge and connections of an intermediary. Similarly, it can be costly for
technology users to find all potentially-relevant patents. Effective brokering of patents by
intermediaries can therefore increase the value of patents, fostering greater incentives to
innovate. And finally, potential inventors may not have the resources to protect their patents from
infringement; their incentives to invent may be increased if they can sell their patents to firms that
specialize in litigation and other means to collect license fees from those who are using the
patented technology.

On the other hand, patent intermediaries may also act in ways that reduce innovation. Recent
years have seen the rapid emergence of PAEs, or “patent trolls.” These firms “use patents
primarily to obtain license fees rather than to support the development or transfer of technology”
(Chien 2012). Obtaining these license fees in practice often means aggressive litigation practices,

The LEAHY-SMITH AMERICA INVENTS ACT (AIA)

In September, 2011, President Obama signed into law the Leahy-Smith America Invents Act, historic patent
reform legislation designed to help American entrepreneurs and businesses bring their inventions to market
sooner, creating new businesses and new jobs. See more in this entry.

Qualities of Patentable Inventions

See information about the Qualities of Patentable Inventions here.

Patents in the U.S. Code

The United States Patent Code appears in Title 35 of the United State Code.