SECURING CAPITAL
It is a curious but well demonstrated fact that people who have
inventive genius often lack the means to carry out their ideas. An
inventor who has ample means can secure his patent and proceed to turn
it into money without the necessity of being compelled to solicit
financial aid from anyone. This, unfortunately, is not generally the
case with inventors; indeed, many are often barely able to stand the
expense incident to taking out the patent. Patentees laboring under this
disadvantage are frequently tempted to part with a small interest in
their patents for the sake of securing sufficient funds to carry on the
promotion of their inventions and sale of the patent; and in doing this
the inexperienced patentee is apt to make the fatal mistake of assigning
to another an undivided interest in his invention.
[Sidenote: Danger in an Undivided Interest.]
Such an assignment may appear well enough on the face of it, and many
patentees have been misled, supposing that under the assignment the
proceeds from the patent should be divided _pro rata_, according to the
several interests. This, however, is not the case in such assignments,
and joint-ownership of a patent, or interest therein, does not of
itself, without an express agreement to that effect, make the parties
partners. They are merely tenants in common, each having the right to
separately make, use, or sell the invention so assigned without
liability to account to their co-owners for any part of the profits
derived from the invention through their own efforts.
In an assignment of an undivided interest, the assignee is afforded an
opportunity of manufacturing, using, and selling to others to be used
the article covered by the patent; also, to grant territorial grants,
such rights being unlimited by the terms of the assignment, and it is
actually of little consequence how small an interest is thus conveyed,
the assignee can proceed with the patent in much the same way as if he
were the sole owner; therefore, whenever it is intended that the
relation of co-partnership shall exist between the patentee and the
assignee of an undivided interest, and that the profits arising from the
invention shall be equitable, for their joint benefit, there must be an
express agreement between them to that effect, otherwise the assignee
will have a decided advantage over the inventor, if he is inclined to be
dishonorable, and there are numerous cases on record where patentees
have virtually lost their patents by such assignments. Patentees should
especially guard against strangers who offer to purchase an undivided
interest in their patents.
[Sidenote: A Better Plan.]
A better procedure to secure means necessary for the development,
introduction, and sale of an invention is to borrow the money from a
friend contingent on the sale of the patent, sell a State or county
right, or enter into a contract with a party willing to furnish the
means for a certain proportion of the proceeds derived from the
invention. Generally speaking, it will not be hard to find a party
willing to advance sufficient means to promote an invention which is
protected by a patent for a certain percentage of the net receipts
arising from its manufacture, sale, or territorial grants, and the
patentee will probably find a person among his own acquaintances who
will not only be glad to furnish the means necessary, but also be of
value to the patentee in realizing from his invention. In any case,
whatever is agreed upon should be put in the form of a contract, or an
agreement, couched in such terms as will leave no doubt as to the
understanding between the parties. The following form secures both
parties, and will be suggestive of others:
[Sidenote: Form of Agreement.]
_Whereas_ I, Richard Doe, of Philadelphia, County of
Philadelphia, and State of Pennsylvania, have invented
certain new and useful improvements in Telegraph Keys, for
which I have obtained Letters Patent of the United States,
bearing date January 1, 1901, and number 000,000, and
whereas John Roe, of Camden, County of Camden, and State of
New Jersey, is desirous of obtaining an interest in the net
profits arising from the sale or working of the said
invention covered by the said Letters Patent.
Now, therefore, this indenture witnesseth, that for and in
consideration of one dollar by each of the parties hereto
paid to the other, the receipt of which is hereby
acknowledged, it is stipulated and agreed as follows:
First, That the said John Roe shall pay all moneys necessary
to the construction of a suitable model to represent the
said invention; that he shall pay all necessary expense in
advertising and bringing said invention before interested
parties (and such other clauses as may be deemed necessary
and agreed upon, such as the expense of constructing a
working model, or carrying out a process, etc.); that he
shall make diligent effort to promote the said invention,
its manufacture, and sale.
Second, That the said Richard Doe, sole owner of said
invention and Letters Patent, in consideration of the
payment of the moneys above mentioned, agrees to pay the
said John Roe twenty-five per cent. (or other amount agreed
upon) of all the net receipts in any manner arising from
the sale or working of the said Letters Patent, during the
term for which said patent is granted.
Witness our hands and seals this tenth day of January, A.D.
1901.
RICHARD DOE,
JOHN ROE.
In the presence of:
JOHN SMITH,
THOS. JONES.
[Sidenote: Perfecting Inventions.]
Should an inventor defer the filing of his application until his
invention is fully developed as regards the detail construction and
arrangement of the parts? The best opinion seems to be in favor of the
prompt filing of the application. The final form of the details can best
be determined by the manufacturer and expert machinists and designers,
who appreciate the matter of economical manufacture, which is quite as
essential as the efficiency of the device or machine. Clearly,
therefore, the inventor cannot decide as to all the details; why then
should he delay his application?
The safest course for an inventor is to file his application for a
patent as soon as his invention is complete in its principal features,
so as to conform to the requirement of the Patent Law that an invention
be sufficiently complete to be theoretically operative. The mechanical
details are rarely of great importance as far as the patentable
features of the invention are concerned. Still, it is well to give the
attorney full particulars of whatever details the inventor has in mind.
[Sidenote: Exhibit of the Invention.]
Under the security thus afforded for the main features involved in his
idea, the inventor can proceed more deliberately in perfecting and
improving his invention, and can then file an additional application if
necessary, to secure special protection on particular improvements or
the improved invention as a whole. The early filing of an application
may turn out to be important in securing to the inventor his right of
priority. When the inventor comes to exhibit his invention, with the
idea of bringing it to the attention of the public in general, there is
no question that he should then have his invention in the best form he
can, and in as attractive shape as possible.
[Sidenote: To Avoid being "Squeezed."]
The patentee who proposes to realize from his invention should never let
it be known that he is in want; of course, in some cases he cannot help
himself, but he should endeavor to obtain the necessary assistance from
his acquaintances, and under no circumstances let those with whom he is
trying to deal get an insight into his financial condition, as
capitalists and others will very often take the advantage of an inventor
when known to be in straitened circumstances, and the patentee probably
would not realize as much from his patent as he otherwise could.
Therefore, it is advisable in all cases for the patentee to manifest no
impatience, remain silent as to his financial condition, and strive to
impress those with whom he is dealing that he is in no condition to be
"squeezed."
[Sidenote: Value of Record of Invention.]
Inventors, while working on a complicated machine, should not overlook
the value and importance of keeping a record of the progress of the
development, illustrating it with sketches, signing and dating them with
each new addition, and, when practical, having it witnessed by one or
more persons. This plan is preferred by many inventors to filing a
caveat. Such a record will be found very valuable in case of an
infringement, as it enables the inventor to ascertain the various steps
of his invention, and is a sort of evidence that cannot be impeached.
Such a record of a complicated invention, when the inventor has put much
time and study upon the subject in perfecting it, will also be found
valuable in effecting sales, and in fixing the price of the patent.
[Sidenote: Prejudice against Patents.]
It cannot be denied that at the present time there seems to be in many
sections of the country a strong prejudice against patents, which
sometimes makes it difficult to get people sufficiently interested to
take hold of any patent; especially is this true when the patentee
endeavors to sell his patent piecemeal; that is, by county, township,
shop, or farm rights. No matter how important or valuable the invention
may be, there seems to be a disposition on the part of the public to
look upon such rights as a fraud, and to be very cautious how they
invest in them.
The public is not wholly to blame for this, as in recent years there has
been a class of men who have canvassed the country with patent rights,
not caring what representations they made so long as they were able to
effect a sale; consequently, many people have been lured into purchasing
patent rights for a small territory which in many instances were
worthless or not as represented, causing them to be more or less
skeptical of all patents, as well as to bring this manner of selling
patents generally into ill repute. With manufacturers and capitalists,
this prejudice does not exist to any great extent, as with them the
patent rests solely upon its own merits.
[Sidenote: Newspaper Notoriety.]
Many inventors overlook the importance of interesting newspaper men in
their inventions. This is a matter of great consequence to the inventor
in exploiting his invention, and should be given some attention.
Newspapers desire items of interest of every description, and readers
are usually interested in brief accounts of any new invention
possessing novelty or merit; so that when the inventor once gets his
invention into the newspapers it is generally copied by other papers,
with the result that the invention gets a large amount of free
advertising and publicity. These items frequently attract the attention
of capitalists, manufacturers, and others, and at once put the invention
in a favorable position before the public as could be done possibly in
no other way--certainly in no cheaper way.
Many of the trade journals and other periodicals are also open to
receive technical descriptions of inventions of merit concerning
industrial improvements. Such articles should be written in good form,
containing not over five hundred or a thousand words, and if admitted to
this class of publications will be of the utmost value and importance in
creating favorable public opinion, and in advancing the inventor's
interests.
With hardly an exception, if an invention strikes editors favorably and
is adjudged to be of sufficient interest to form an article of news in
newspapers, or of sufficient merit to warrant a description in the trade
papers, it is pretty certain to prove a success and bring the inventor
large returns.
If the invention is of such a character as to strike newspaper men
unfavorably, the inventor can resort to the advertisement columns;
using the large daily papers, or such publications which in some way
relate to the industry to which the patent appertains, and such as have
the largest circulation among the class of people it is desired to
reach. See about advertising on page 46.