THINGS TO INVENT AND PATENT

 THINGS TO INVENT AND PATENT 

     THE closer your business comes to being a monopoly the surer you will be of success. Here in America there is a good deal of confusion over the meaning of “monopoly.” To some people it means taking advantage of small competitors by unfair practices. But since the days of Elizabethan charters and patents, a monopoly has meant protection against competition. Sometimes a monopoly was granted by the state in the form of a patent or grant, but more often it was obtained by the business man or tradesman by virtue of his membership in a “guild.” The last official act signed by Queen Elizabeth was to annul the British Monopolies Act. What forms of monopoly do we find in American business? First we have the “trust” or holding company which enjoys a monopoly by virtue of buying out all its competitors, thus giving itself a clear field to charge all the traffic will bear. Such monopoly is based on financial power. It is a pistol pointed at the heart of the small, independent business man. It is the type of monopoly which Theodore Roosevelt attempted to crush with his trust-busting activities. Some business men still believe his method is the answer to ruthless competition. The use of such power to obtain a trade monopoly is un-American in its conception, uneconomic if carried to its logical conclusion, and would inevitably lead to a monopoly of monopolies and finally monopolize the functions of government. But there is another kind of monopoly fostered by the government, which is just as much in the public interest as the other sort of monopoly is against it. Under that classification comes the monopoly of skill. That is the best monopoly of all. It is the monopoly that is enjoyed by the man who can build a better mouse trap or paint a better picture, write a better book, design a better dress or excel in any field. The very fact that you can do one little thing better than anyone else in the world can do it, assures your success. And although the monopoly granted for one achievement is limited as to duration, the success will continue so long as you make good your monopoly by keeping ahead of the imitators who are always found in the wake of success. Then, there is the monopoly that comes from location. For example, it is a well-known fact that on the Island of Bermuda, a certain group of people pretty well control the island. These “best” families protect native business men against the encroachment of newcomers who seek to exploit the island. How do they do it? Very simply. You go over to Bermuda on a trip, fall in love with the climate and decide to start an automobile agency there. It looks like an easy way to make a few thousand dollars. Statistics show that the number of inhabitants per automobile is higher in Bermuda than in any other place in or around the United States. It looks like a wide-open opportunity. So you get an agency and hang out your shingle in Hamilton. But nothing happens. The first thing you find is that only government officials are licensed to drive automobiles on the island, that residents there don’t want the smelly things rushing about killing people. Next you learn that it is not considered good form in Bermuda to patronize any business that has not the approval of the “best” families. Bermuda is a small place, and one who lives there feels the need of social contacts. People who patronize the “wrong” business men suffer a sudden social catastrophe. In that way a monopoly is granted to those whom the older families wish to have succeed, and failure usually overtakes those who try to “muscle in.” Another form of monopoly is to get an exclusive concession at a fair, or the exclusive local agency for some advertised product. When Eskimo ice cream bars were first put on the market, men paid fancy prices just for a local franchise to make these bars and sell them to the public. The “rights” to sell Neon signs in a territory were sold to eager salesmen at prices ranging from $1,000 to $15,000. The Coca-Cola Company is another well-known concern which gives exclusive franchises to sales agents. It is worth noting, however, that in nearly every case where the sale of franchises has been used to finance a business, a large part of the money received for the franchises was used to pay for the initial advertising campaign. While there are cases of men selling patent rights to raise money it is a difficult and usually a disappointing method of financing a new business. What Goes with a Patent Most inexperienced people feel that if they invent something and are able to get it patented, they can make a thousand dollars very quickly, either by selling the patent on a royalty basis, or by selling the patent outright. They assume that because they have a patent, they have the federal government back of them to keep off poachers and pirates. There is danger in placing too much reliance on, and attaching too much importance to, a patent until it has been tested in a high court. For example, a number of advertising men have “invented” trick mailing cards, letters which fold down from the top, or some other device, and have applied for, and been granted, patents on these things. In many cases they have, on the strength of such patents, collected royalties from printers and others for the use of the idea. One large lithographer paid several thousand dollars for a patent on a folded-down letterhead, the patent covering any letterhead which had printing under the flap. There was nothing wrong with the patent. But if this patent claim was appealed to the U. S. Supreme Court an infringement suit would probably be dismissed on the grounds that the patent covered an operation which was natural to a mechanic in the pursuit of his trade. English common law gives a mechanic definite protection, just as it protects business men from confiscation of capital without due process of law; and the question of whether a patent is for a real invention and not mere mechanical skill must be left to the judgment of the courts in view of evidence introduced on both sides of the controversy. There is also the possibility of somebody being able to show prior use of anything you may patent. A patent was recently granted for a “pop-up” idea in collection folders. It appeared to be a perfectly good patent, and hundreds of companies are paying the inventor a royalty for the use of the idea. Yet it is possible that this idea was used in valentines many years before its present use in folders. If somebody wanted to go to the trouble of searching among collections of old valentines and found a sufficiently similar idea, the patent could be invalidated by proving that it was not an original idea, and therefore the inventor was not entitled to the benefits of a government monopoly. Another hazard that goes with patents is the possibility of some person “improving” upon your patent or otherwise changing it just enough to get around your patent claims. The idea, of course, is to make the claim as broad and as inclusive as possible, but because of earlier patents or printed publications, the claims must be limited to only the advance in the art which the inventor had made. Sometimes the only thing that can be patented is an accessory. That is why in taking out a patent you should go to a reputable and experienced firm of patent attorneys and stay clear of quacks who advertise for “suckers.” You will pay a reputable patent attorney a little more than the quack’s advertised price, but the reputable attorney will tell you frankly if your invention is practical and may even be able to help you to market it. Strangely enough, most of the outstanding inventions were made by “outsiders.” The principle of the steam engine, as everybody knows, was discovered by James Watt, who got the idea watching the lid of a teakettle jump up and down. It suggested to him the existence of power in steam, and he set about in his crude way figuring out how that power could be harnessed. Out of that invention came our present industrial system. Benjamin Franklin was not an electrician, but he invented the lightning rod. The Eastman Kodak Company paid a hundred thousand dollars to a man who invented the device which enables you to write on the back of a film after it is exposed. And even the humble brake on a baby carriage was not invented, as you might suppose, by a carriage manufacturer, but by an advertising man in search of an “exclusive” feature to advertise. So do not feel that just because you do not know all there is to know about a particular product that you cannot find ways to improve it. Strangely enough, a person who is using a thing is often the one to think of an improvement, rather than the man who makes it, and the maker is eager to pay him either a lump sum of cash for the patent or a royalty on it. Improving the appliances and things that you use in your daily work is perhaps the easiest and most practical way to make money on patents. It is not much of a trick to get $1,000 from a large manufacturer for any worth-while improvement which you develop and patent. There are a hundred ways to make a thousand dollars right in the kitchen of your home. In spite of the thousands of existing patents there is still a need of a better can opener, a better clothespin, a better bottle opener, and other simple everyday things that are in daily use. As a rule, simple inventions are the most profitable. The hump hairpin is a case in point. For years women had been using and losing straight hairpins. The pins fell out of the hair because there was nothing to hold them in. Then some bright fellow thought about putting a little kink in the wire. It was so simple it seemed unimportant. Yet a great business has been built up in Chicago, and millions of dollars have been made on “hump” hairpins. On the other hand, this same chap might have spent years inventing a dishwashing machine, only to find after inventing it that people had to be educated to wash dishes by machine and that there were already a dozen on the market. If you are of an inventive or deductive turn of mind, and have an ambition to make some money on a patent, first be sure your market exists before spending time and money on an invention. Of the large number of patents issued annually, many are taken out by corporations to protect their development work in improving upon their products, or their production methods and apparatus, which have already been more or less approved in the market. Often corporations will also take out patents on alternatives or substitutes which they do not intend to exploit, but merely to hold, to forestall competitors adopting them. But of the other patents—those issued to “free lance” inventors—perhaps nine out of ten patents are on inventions which prove to be of practically no commercial importance. Generally, this is not so much because the invention lacks merit as because there is an inadequate commercial field for it. There are many reasons why the commercial field for an invention may be inadequate. Expense of manufacture may be too great to bring the selling price of the invention down to profitable production. The cost of merchandising may be too great in cases where the article invented cannot be standardized and requires too large an assortment of stock. Often the invention involves a meritorious idea for the particular situations for which it was designed, but the possible users are too few and too scattered to make it practicable to contact and sell them economically. This is particularly true of accessories usable only on particular makes and models of automobiles or on certain types and makes of domestic boilers. In other instances the cost to a manufacturer of taking over an invention and developing it until it is ready for production may promise to involve so much expenditure that it is difficult to get a manufacturer interested. It is often the high cost of development (which along with the royalty to the inventor must come out of the manufacturing profits) which reduces the revenue an inventor might otherwise get on his patent. Thus, in inventions where the probable cost of development is the least, the inventor has the best chance of realizing a large royalty or lump sum payment for his patent. These difficulties are reviewed not for the purpose of discouraging you from making money by inventing something, but rather to point out other factors than the merit of the invention itself or how well it works, in deciding whether you are going to devote your time and money to a particular invention you may have in mind. The Cost of Taking Out a Patent The cost of securing a patent is one factor of expense which ought to be balanced against the probable reward for your efforts in the event of success, and you must take into consideration that an invention is something of a gamble until the merit of the invention has been demonstrated, and your patent upheld in the courts. To a certain extent the cost of securing a patent depends upon how complicated the machine or device is. But, on the other hand, the very simplicity of some inventions makes them more expensive to patent because the attorney has to spend more time in presenting arguments to the Patent Office to overcome the objection that because the invention is simple it is seemingly obvious. It is seldom possible to have an attorney prepare and file an application for you for less than $100, including the cost of the Patent Office drawings and the government filing fee of $30. A worthwhile patent nearly always involves some cost of prosecution in getting the patent through the Patent Office after it has been filed, and before the patent is finally issued another $30 must be paid to the government as a final fee. The total cost of securing a patent, on even the simplest inventions, will be at least $140 or $150 in most instances. Even the average invention will be a little more expensive than this to patent, and if the invention is unusually complicated, the cost of the Patent Office drawings and the time which the attorney will have to devote to the proper preparation of the application and claims, may increase the total cost of securing such a patent to $300 or even more. Because your income from the invention will probably be due almost entirely to the patent protection you get, it is well to have the services of a competent patent attorney in procuring your patent, as often the value of the patent depends largely upon the skill of the attorney. It is wise to have your patent procured by an attorney of recognized ability, although some other attorney might prepare your application for a lower fee. Incidentally, you will find that being able to confer directly with your patent attorney is going to be of considerable value to you.