Patents to the United Kingdom, with exclusion of the Colonies. This
change was desired by an influential and intelligent portion of the West
India Association. Their conduct contradicted, and their experience
proves the fallacy of, the allegation so confidently made and repeated
in spite of its futility, by some interested or else ignorant parties,
that inventions thrive most where Patents exist—_i.e._, where trade
is trammelled with prohibitions or burdened with royalties. The home
sugar refiners exclaimed against an exemption which, being partial,
operated against their trade. The following is an extract from one of the
petitions presented by that body:—
“That, so far as regards home manufacturers and producers, such
a change of the immemorial usages of the kingdom is virtually
a bestowal on parties carrying on the same businesses in the
colonies of a right to use patented inventions fourteen years
sooner than they.
“That if, at any time, the British Parliament might have put
home manufacturers on such an unfavourable footing, surely
this cannot be supposed under free-trade and equalised duties,
when they must task their utmost energies, and adopt every
improvement in mechanism and processes, in order to maintain
their ground.
“That the use of future Patents, at the rates that have been
freely paid by sugar refiners for Patents granted before now
would subject each sugar house, of average size, to a payment
of about £3,000 a year.
“That to exempt their competitors in the colonies from such a
tax (for tax it is, payable by order of, though not to, the
State) is really to give them a bounty of that very large
amount.
“That, in so far as patent fees may be considered a premium
for stimulating improvements, an equal share of the benefit is
enjoyed by the colonists, who, therefore, should bear a due
share of the burden.”
Soon after that time, protection having ceased, the unfairness of
burdening British manufacturers came more vividly into sight. How can
they compete with Prussia and Switzerland? Here is evidence regarding
those countries. From a Prussian witness:—
“I am a member of the Board of Trade and Commerce, and at the
same time a member of the Patent Commission.
“Will you be good enough to state what is the system adopted in
Prussia with regard to protection to inventions?—We have the
principle in our country to give as much liberty as possible to
every branch of industry and art, and, considering every sort
of Patent as an hindrance to their free development, we are not
very liberal in granting them. We merely grant a Patent for a
discovery of a completely novel invention, or real improvement
in existing inventions.”
From an important Swiss witness:—
“There is no want of persons to import them into Switzerland,
although those persons thus importing them obtain no
monopoly?—When a Patent is taken out in France or England, the
process is published; therefore it becomes the property of the
public in Switzerland; the Swiss have access to the French or
English Patents.
“In that way the Swiss have the benefit of the invention
without the charge of the licence?—Yes.
“And so far they have an advantage?—Certainly.
“When inventions in the watchmaking trade are made in France,
are they immediately introduced into Switzerland?—I should
think so, if they are useful.”
How, I ask, can British manufacturers compete with Prussia, which
prudently grants less than 100 Patents in a-year; or with Saxony, which
grants only about 134; or the Netherlands, which grant only about 42?
Rather, I may ask, how can they compete with other countries in general,
even those that grant Patents freely, seeing that it is not incumbent on
the British patentee to take a Patent in any other country whatsoever;
seeing also that, unlike some countries which grant Patents, we in most
cases do not terminate the currency of those we grant at the time when
the Patents taken elsewhere expire? Honourable members will understand
how serious is the disadvantage under which our manufacturers, and
with them, of course, the labourers and artisans who co-operate in
manufactures, are placed if they are precluded from using inventions
which their continental rivals may use. When licences are given by
patentees, the disadvantage is lessened, but not very greatly. The
House will agree when it hears how enormous are the royalties sometimes
exacted. For a set of inventions in the iron trade, which is not the
subject of Patents in Prussia, a single firm is said to be paying at the
rate of £16,000 every quarter. Let me quote from a leading article in the
_Engineer_:—
“Owing to the invalidation of his Austrian Patents, Mr.
Bessemer derives no pecuniary benefit from the working of
his inventions in that country. This is also the state of
things in Prussia, whose really iniquitously-managed Patent
Commission have refused to give Mr. Bessemer any Patent at
all. The great Prussian steel works there manufacture Bessemer
steel unweighted by any royalty. We regret this, not merely
for Mr. Bessemer’s sake, but also on public grounds. Our steel
makers are thus heavily handicapped in the industrial race with
royalties of from one to even three pounds per ton.”
See a confirmation of this in the following piece of a private letter:—
“The very heavy royalty payable under Bessemer’s Patent does,
to a very great extent, prevent English manufacturers competing
on the Continent for steel rails; but, from the accidental
circumstance of continental manufacturers being obliged to buy
a considerable portion of their raw material from this country,
we have not been exposed to competition in England, as the cost
of carriage backwards and forwards about equalled the benefit
which the Germans enjoyed of paying no royalty.”
The sugar-refiners, in a printed document before me, put the case,
convincingly no doubt to all who will consider how small is the
percentage margin of profit in great businesses:—
“If, for any invention, French producers of refined sugar
should have only royalties of one per cent. _ad valorem_, while
the British should have to pay royalties of five per cent., it
is obvious the Patent-Law may in effect impose on the latter a
most onerous differential duty.”
In that trade I myself, shortly before my retiring from commerce, paid
£3,000 for a year’s right to use a new process, which proved unworkable,
and had to pay a _solatium_ of £1,000 for leave to discontinue it.
The agricultural interest should not remain indifferent. Mark what was
told the Commission by Mr. Reeve, Registrar to the Privy Council. In
Mr. Bovill’s Patent there was charged a royalty of 6d. a quarter on all
the corn ground in Great Britain by millers who thought it desirable to
adopt his plan. Obviously the royalty in that case had the effect of a
protective duty leviable for individual benefit, and enabling foreigners
to undersell in the British markets. And what title to this power had
Mr. Bovill? He was not the inventor. Another case is exhibited in the
following extract from a private letter with which I am favoured, from a
highly respectable quarter:—
“Patents have become so numerous and so various, that it is
not safe to use any piece of machinery, or make any variation
without first making a careful search to ascertain whether it
is not protected by a Patent. The Patent-Law has also been
the cause of much litigation, there being very few Patents of
any real worth but have had to go through the ordeal of the
Law Courts, and there can be little doubt that injustice has
frequently been done both to patentees and to the public. A
case of considerable hardship connected with our own trade
occurred regarding the application of the exhaust to grinding
purposes. It was clearly proved at the trial that the machine
for which the patentee claimed protection had been in public
use in Denmark, where it had been seen by a Glasgow miller,
who erected a similar machine on his premises in Glasgow,
but hastily threw it aside without putting it to a proper
test prior to the date of the Patent, but it was held that no
profitable use having been made of the machine by the Glasgow
miller, the Patent was good and perfectly protected. In our
opinion a Patent obtained in such circumstances should never
be allowed to stand, and if some means could be devised for
ascertaining the circumstances beforehand, it should never be
granted. The trade suffered very considerably in consequence
of this Patent being sustained, and the consequence was,
that although the patentee was not the original inventor, he
pocketed a very large sum of money.
“A more recent instance has occurred, however, of a large sum
being pocketed by parties not the inventors of the article
patented. We can, however, only give you the figures as
popularly reported, without vouching for their accuracy, and in
relating the story we shall endeavour to reply to your queries
_seriatim_. 1st, The patented article is a machine for dressing
millstones by means of a black diamond, or piece of ‘bort,’
instead of by the hand with picks. It was originally patented
in France by the party said to be the inventor, and shortly
afterwards was patented by him in this country. 2nd and 3rd,
A Leith commission agent (a German) and an Edinburgh miller
saw the machine in the Paris Exhibition of 1867, and induced
the patentee to bring it over to Scotland for trial, and
ultimately they, in conjunction with a third party, purchased
the patentee’s right for the whole kingdom for £4,000. 4th,
These parties immediately put the machine in the market, and
it was at once seized hold of by speculators, who readily gave
most extraordinary sums for it. One party is said to have paid
£40,000 for the right for a dozen counties in England; another
£15,000 for three counties; and another £20,000 for some
counties in Ireland: the whole sum realised by the original
purchasers amounting, it is said, to upwards of £150,000. 5th,
The consequence is, that such enormous sums having been paid
by the speculators, the trade can only get the use of the
machine by paying a most exorbitant price, and hitherto it has
remained all but a dead letter. We cannot give you in round
numbers the amount expected to be realised by the speculators,
but the price originally charged by them would have yielded
four or five times the amount they paid if the whole trade had
become purchasers. This machine has not yet been the subject of
litigation, but there is every probability that it soon will
be.”
But I can reproduce a case where the effect was far, far worse,
communicated to me in a private letter:—
“The patentee of the Howard series of improvements in
sugar-refining granted licences to houses in Liverpool and
Hull, with a condition in each case that he would not grant a
licence to any party carrying on business within seventy miles
of either town. A sugar refiner of long standing, established
in Sheffield, applied for a licence, and was refused for the
reason above stated, Sheffield being just within the prescribed
distance. The consequence was, he had to carry on his
manufacture for nearly fourteen years on the old system; and
during this period sustained great losses by working, which he,
as well as parties cognisant with the facts, attributed to the
disadvantage he was compelled to carry on under. His fortune
disappeared, and he became insolvent.—I am, &c.
“Sheffield, December 17, 1863.”
This distressing result will, I trust, drive home the conviction that,
great as is the evil of multiplying Patents, it would be but a mitigation
not worthy of being looked to as a cure, to get the number lessened.
If in an earlier part of this address I have shown that the condition
not to produce “general inconvenience” has been preposterously set at
nought, surely these passages prove no less conclusively that there
has been equal disregard of the condition not to “hurt trade.” I will
satisfy myself, and I hope the House, with one extract only to prove what
I apprehend is the rule rather than the exception, that Patents offend
against the other condition, not to “raise prices.” It is from a paper
read by Mr. Lowry Whittle before the Statistical Society of Dublin:—
“I was informed lately of a case in the North of England where
a successful patentee produced a machine at the cost of £200
for working in the linen trade. On this machine his royalty is
£1,000.”
I may give one instance from my own experience, where the pretensions
of the applicant for a Patent were equal to about a farthing a pound on
all the sugar that the process perfected. The House may understand the
hardship this would inflict on the population when told that it was for
the use of a single process only, or rather of a machine invented by
another, an engineer firm, who had overlooked, and not included in their
Patent, its applicability to sugar. My experience in that case was very
instructive. Pardon my introducing a few particulars. I have no reason
to think the idea of applying the machine to the refining of sugar was
original; on the contrary, it had been already made practical on the
Continent. Nor was the idea patented by my friend alone; on the contrary,
to several persons it had occurred, by some (I forget how many) it had
been patented. One of my partners and I had a good deal of travelling
in England and Scotland, when we discovered the first patentee of the
application at length. We traced the indubitable priority home to a
good neighbour, whose office was within a bow-shot of a sugar-house of
which I myself was managing partner. He told me, when I called about his
Patent, that he had not attended to it for years. I regret to be able
to add that he was afterwards led, by representations which I will not
characterise, to part with his privilege—it was really a very valuable
one—for a most inadequate consideration, to a person who had applied
for a parasitical Patent for something, the value of which could not
be substantiated. Perhaps the worst of all is, that the really most
meritorious person, the patentee of the machine, got comparatively
little advantage from its new but natural application. A coalition was
formed whose terms violated one of the conditions to which I have called
attention, by charging an exorbitant price for the machines, and, what is
the greatest mischief of Patents as now administered, by further charging
high royalties proportioned to the quantity of work they did.
Now will the House consider why it subjects the nation to all this
inconvenience, loss, and expense? It is not because without it we would
miss many important inventions. The groundlessness of such a fear has
already been indicated with sufficient plainness.
The House can hardly doubt, from its individual acquaintance with what
goes on in the world, and from the extracts I have troubled it with,
that whatever argument in favour of maintaining a Patent system may
be founded on the claims of inventors, the material interests of the
nation would suffer little from the cessation of Patents as a stimulus.
Unquestionably, if the system induces some inventions to be made and
published, it deters others. What we gain is a matter of doubt. That much
inconvenience is inflicted by it, and much disadvantage and very heavy
burdens, is no matter of doubt. It is a case in which we have to balance
the positive disadvantages against the supposed advantages. To enable the
House to weigh these, by seeing how few inventions we would lose by total
abolition, a few more quotations may be permitted.
Very significantly Mr. Richard Roberts answers:—
“Would the absence of Patents for inventions, in your judgment,
have any effect in producing secret trades; or have you had
any opportunity of judging whether non-patented inventions are
used much in secret trade?—I do not think there is much secret
trade, but I know this, that no trade can be kept secret long;
a quart of ale will do wonders in that way.”
Let me adduce Mr. Woodcroft:—
“Do you think there is any natural tendency or propensity in
inventors to keep to themselves their inventions, or have they
a natural tendency to make them known?—The natural tendency of
an inventive mind is to make the invention known.”
I now adduce the late able Mr. Fairrie:—
“You believe that the same energy of mind would be displayed,
and the same anxiety to make new discoveries felt, whether
there were this hope of protection or not?—I think so; in the
case of manufacturers certainly. I think the great bulk of
improvements proceed from the manufacturers themselves, and not
from mere inventors.”
Hear Colonel Reid, so well entitled to speak:—
“Supposing the law were so modified as to make the acquisition
of a Patent easy and simple, and to provide for the publication
at the earliest possible period, do not you think there would
be more inducement to the disclosure of the secret under such a
system than if all privileges of the kind were abolished?—I am
inclined to think that the advance in improvement in all our
arts would be greater by leaving them entirely unshackled.”
Sir W. Cubitt was asked—
“Have you ever been an inventor yourself?—Yes, of many things;
but a patented inventor of but one.
“You have taken out a Patent?—I took out a Patent in the year
1807.
“Has your attention been at all directed to the advantages or
disadvantages of the present system?—Yes, it has been drawn to
the subject very frequently indeed; but the more it was drawn
to it, and the more I saw of it, the less I approved of it; but
with that disapproval I could not satisfy myself how to devise
anything much better; whether to make alterations, or whether
to do away with Patents altogether would be best, I can hardly
determine.
“Will you state, generally, your objections to the present
system?—The objections to the present system are the very
advanced state of scientific and practical knowledge, which
renders it difficult to secure anything. The principles of
mechanism being very well known and very well understood,
inventions involving exactly the same principle and to effect
the same object may be practically and apparently so different,
that Patents may be taken out for what is only a difference in
form, intended to produce the same effect, without there being
any difference in principle.”
So Sir W. Armstrong:—
“My firm conviction is, that if there was no artificial reward
for invention you would have just as much as at present.”
Mr. Grove perhaps goes at least part of the way:—
“The Patent is to encourage invention; if, therefore, you would
get the same inventions as we now get without Letters Patent,
I would have no Letters Patent at all. I believe that, with
respect to the minor class of inventions, you would get them.”
Mr. Platt also has his doubts:—
“Is not almost every Patent which is now granted a Patent for
an improvement?—A great many Patents are granted for things
which are no improvement at all.
“I would simply limit the Patent-Law to that extent. I think
there are so many Patents granted that it is a great question
with me, I confess, if Patents for these combinations are
to be granted, whether it would not be better to abolish
the Patent-Laws altogether, as it becomes such a nuisance in
conducting a large business.”
How emphatic was Mr. I. Kingdom Brunel:—
“Do you think that there would be an equal inducement for a
man to turn his attention to improvements if there were no
Patent-Laws, as compared with the present state of things,
which lead him to the expectation and hope that he will obtain
some exclusive advantage from the discovery of some new
improvement?
“I feel certain of it; I have felt it very strongly, and
it always struck me as surprising that it was not seen by
everybody else; but we have so long been in the habit of
considering that the granting of an exclusive privilege to a
man who invents a thing is just and fair, that I do not think
the public have ever considered whether it was, after all,
advantageous to him. My feeling is, that it is very injurious
to him.
“My impression is, that in every class of inventions you
would practically in the end have a more rapid supply and
increase of inventions than you have now; I believe that men
of science, and all those who do it for pleasure as well as
for profit, would produce more, they would be less interfered
with by existing Patents, and they would really produce more; I
believe that the working class, the smaller class of inventors,
would introduce very much more. With respect to that class
of inventions, which I believe to be very few in number,
though they are talked of very much, which really involve
long-continued expenses, I believe they would probably be
brought about in a different manner. I wish, however, to have
it understood that I limit my observations to the present state
of things. I do not wish to express any opinion as to what
might have been formerly the effects of Patents, or whether
they did originally encourage inventions or not. I believe that
in the first place they are very prejudicial, on the whole, to
a large class supposed to exist of inventors, and principally
from these circumstances: the present state of things is this,
that in all branches, whether in manufactures or arts of any
sort, we are in such an advanced state, and every process in
every production consists of such a combination of the results
of the improvements which have been effected within the last
twenty or thirty years, that a good invention now is rarely a
new idea.”
So likewise Mr. James Spence:—
“The evils of the present system are serious. There is a charm
in the name of a Patent which entices large numbers of men to
neglect their own affairs in pursuit of some phantom. Where
intellectual power exists of an inventive character, it will
develop itself without any spur; it is, indeed, irrepressible
in its nature. To such minds the stimulus of a Patent is
superfluous.
“Besides the progress of the arts, another change has occurred
which affects this question. Formerly improvements made slow
progress, and unless an inventor were protected for many
years he had little chance of recompense. Now the power of
advertising is so great and intelligence is so diffused, that
any really useful invention can be brought immediately into
operation and profit. Were Patents abolished, any one with an
invention of value could find a manufacturer to take it up. It
is true it would be open to the rest of the world as soon as
found out, but the manufacturer would obtain the first start
of all others, in itself a profit. Under the present system
the legal protection breaks down in practice. The moment a
specification is published, competing manufacturers strain
their wits to contrive how to reach the same result through
other means or modifications; in other words, how to infringe.
Against this the patentee has no remedy, except proceedings at
law of the most costly nature.
“No change can be proposed in Patent-Law that will not be open
to objections based on individual cases of hardship; but, on a
comprehensive view of the subject in all its bearings, I hold
that it would benefit the country to abolish the system _in
toto_. Manufacturers would be relieved from present perplexity,
delusions would no longer be kept up by excitement, an enormous
waste of money would be stayed; and whilst the mass of
worthless Patents would disappear, any of real value would be
taken up on its merits and produce sufficient remuneration to
the inventor.”
The Report of the Commission, founded on the evidence of which I have
shown the general character, contains the following just observations:—
“The majority of witnesses, however, decidedly affirm the
existence of practical inconvenience from the multiplicity of
Patents. It is clear that Patents are granted for matters which
can hardly be considered as coming within the definition, in
the Statute of Monopolies, of ‘a new manufacture.’ It is in
evidence that the existence of these monopolies embarrasses
the trade of a considerable class of persons, artisans, small
tradesmen, and others, who cannot afford to face the expense
of litigation, however weak the case against them may seem to
be; and a still stronger case is made out as to the existence
of what may be called obstructive Patents, and as to the
inconvenience caused thereby to manufacturers directly, and
through them to the public.