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 accumulated 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 class.
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 illustrate 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.
A self-made millionaire, recently speaking to the writer about patents,
said: "I know of no business or vocation requiring so small amount of
capital, and yielding such immense profits as that of invention.
Certainly no person of inventive genius can employ his time and
ingenuity to better or more profitable advantage than to invent
something that is really needed. Many poor men, through the art of
invention, have risen from poverty to reputation, fame, and honor, and
taken high places among noted men of all times.
Our moneyed kings may have enriched themselves by stock jobbing, but
this precarious procedure requires large capital, and the few enormous
fortunes accumulated are merely the monuments marking the graves of
thousands of foolhardy unfortunates caught in the vortex of
speculation."