Introduction to Patent Law

by

 

Michael Wogan, Ph.D., J.D.

 

 

 

Chapter 2

 

History of Patents in Europe and the United States

 

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            It took several centuries for patent law to develop from monopoly grants given by a ruler to the regular system of law, embodying rights and privileges open to anybody, which we know today.  As early as 500 B.C.E., monopolies or licenses were granted by the state or ruler to individuals for the exclusive manufacture, processing, or import of particular products.  In 337 C.E., the Roman Emperor Constantine granted artisans and certain tradesmen exemption from all civic duties.  Among the groups so privileged were locksmiths, chariot makers, engineers, workers in lead, and manufacturers.^[1]  This system of exclusive grants to individuals was still in use in England at the beginning of the 17^th Century.  The grants were used by the king as a way of raising money, and to show favor to particular individuals.  The system is still in use in many parts of the world today, where relatives or favorites of an autocratic ruler or ruling group may be granted monopoly rights in a particular crop, minerals, export, or trade. 

 

            There were no Greek or Roman laws which included any notion of intellectual property.  The ancient theft of writings or ideas was not considered theft of intangible property.  It was considered theft of honor, fame, or reputation.  The growth of commercial societies, which assigned value to marketable commodities, led to a process of reification by which objects were separated out of the whole as “things.”  The process began earlier for land and chattels, and developed later for intangible, inventive ideas.^[2]

 

            By the Middle Ages, monopolies were extended by the ruling councils of Italian city-states to guilds of artisans engaged in a particular trade.  In Florence and Venice, guild monopolies were well developed by the beginning of the 12^th Century.  In Florence, which was a center for the wool trade, carding, weaving, or dyeing of wool could only be performed commercially by a member of one of the guilds.^[3]  The guilds served as professional organizations, protecting the livelihood of the members, offering some aid to widows and their families, enforcing an apprenticeship system, and preventing others from entering the trade.  Guilds controlled legal workdays, judicial procedures, and election of guild officials.  Some quality control was exercised.  Selling stolen or defective products, or products not manufactured by guild members was forbidden.  Export of the craft or training someone who was not a member of the guild, especially a foreigner, was forbidden.   The guilds held a type of corporate or communal ownership of knowledge specific to the craft or industry.

 

            Guild monopolies also developed in Europe and England.  During the Middle Ages, guilds protected a wide range of commercial activities, including printing, working with silver or gold, trade in sugar, importation and dyeing of silks, mining, and the manufacture of pewter.

 

            Within a guild certain families were recognized for the exceptional quality of their work.  These families sought to protect tradecraft secrets, such as specific formulas or specifications, from those who were not members of the guild, and from other guild members.  There thus developed an awareness of the value of individual, as well as communal, knowledge or skill which served as the backdrop for the development of patent customs.^[4]

 

The Italian Renaissance

 

            By the 15^th Century, the city-states of northern Italy, particularly Florence and Venice, began to use monopoly grants to promote commerce.  In 1401, Florence offered a ten-year exemption from taxes to anyone who would introduce the art of using steel brushes in wool carding machines.  At the time, the art was unknown among textile manufacturers in Florence but was highly developed in Milan.  Guerinus de Mera, a Milanese, contracted with the wool guild of Florence to teach the art to guild members.  In return, those who learned from him could not practice independently for a period of years.  In 1409, the governing board of Florence approved the contract, giving Guerinus permission to reside in Florence free from taxation for 20 years, and exempting him from the necessity of belonging to any guild.^[5]  Guerinus’ contract is the first known example of a grant of monopoly in return for technical disclosure or “working.”

 

            In 1421, the city of Florence granted a monopoly to Filippo Brunelleschi for the development of a "machine or ship" to bring merchandise, especially blocks of marble, from Pisa to Florence on the River Arno. ^[6]  Brunelleschi was the architect of the dome of the cathedral Santa Maria del Fiore in Florence, and was widely known and admired as an inventor of ingenious mechanical devices.  His machine, which became known as Il Badalone, or "the Monster," promised to benefit merchants generally, since it would save the time and expense of off-loading merchandise and re-loading it for transport on the river.  Under the terms of the agreement, any boat copying Brunelleschi’s design and infringing the patent was to be burned.  Brunelleschi’s grant of a monopoly required technical disclosure in return.  Although the ship was constructed, it never performed successfully and probably foundered in the Arno before reaching Florence.  No plans or designs survive.^[7]

 

            Brunelleschi’s patent, or Guerinus’ contract, were granted on an ad hoc basis to individuals, but they contained important policy elements that later patent systems would recognize.  Governing bodies realized that advantages could be gained for local trade and industry by developing and enforcing a reliable patent system.  It remained for the Most Serene Republic of Venice to develop the first system of laws and administration under which any citizen could apply for protection for his invention in return for certain concessions. 

 

            Venice was a powerful city-state in northern Italy.  With a favorable seaport on the Adriatic, it was a crossroads for trade with the eastern Mediterranean and from there to the Near and Far East.  Industrially, Venice was a leading center for shipbuilding, glassware, lace, and book-printing.  At a time when most parts of Europe were governed by an absolute ruler, Venice was governed by representatives drawn from some 500 noble families.  The head of the Republic was the Doge, who was chosen from among the nobles.  Policy was decided by two bodies, also composed of noblemen, the Council of Ten and the Senate.  While not a democracy, the government of Venice tried to promote a climate of fairness which would be favorable to finance, trade, and commerce.

 

            By the 1300’s, Venice maintained a special fund from which payments could be made to inventors.^[8]  Bartolomeo Verde received a payment in 1332 to build a windmill.  The money had to be refunded if he did not complete the installation and make it work within six months.  Other payments were made for new systems of millwork, and for improved ship designs.  Monopolies were given for building flour mills, cookstoves for dye shops, pumps to raise water for irrigation,^[9] methods of printing, and mills to grind corn.  Many other grants were probably not recorded.  The grants conferred exclusive rights for a limited period of time, prescribed forfeiture if the inventor failed to complete the invention, and included penalties for infringement.^[10]

 

            In 1474, a Venetian statute established the first regular system for granting patents for “new and ingenious devices.”  The right was a general one and not a matter of royal favor.  To be patentable, the device had to be new to Venice, made in Venice, registered with a General Welfare Board, and “reduced to perfection.”  A 10-year period of protection was granted.  The penalty for infringement, copying the device without permission, was a fine of 100 ducats and the destruction of the infringing device.^[11]  Usefulness was an implied precondition.  Before a patent could be granted, the applicant had to demonstrate the device or process to the satisfaction of an examining board or committee, which sometimes heard from experts.  A guild whose monopoly was affected also had the right to be heard.  In a precursor to what became modern interference practice, guilds often objected that the invention was not new but had been part of guild practice for many years. 

 

            Some of the applications dragged on for years before a satisfactory examination was held and the patent granted.  The device had to be newly made or used in Venice, but did not have to be entirely “new.”  An artisan could come to Venice bringing knowledge of a device or process used elsewhere and receive a patent for its use in Venice if it was previously unknown there.  Some patents were granted “without prejudice to concessions which may perhaps have been made before,” to insure they did not interfere with previously-granted patents.^[12]  Enforcement decrees were issued by the Council of Ten.  If a competitor brought evidence that the invention was not new to Venice, the patent could be revoked, either during the application process or after the patent was granted.  If it wished, the government of Venice could make use of the device without payment of a fee, a form of compulsory licensing.  Failure to use the patent would lead to issuing the license to another inventor who promised to use it.  Patents were granted for printing techniques, making mirrors, working iron, mining techniques, and especially for glass makers.  Grants were sometimes issued for mineral rights within a particular territory.

 

            The recognition of a patent as a property right developed slowly.  The holder of a Venetian patent could license others to use or practice his invention, but most early patents were personal rights, not property, and many were not heritable.  There were cases in which the grantee died shortly after the patent was issued, leaving others free to practice his invention and leaving his heirs in poverty.  Some patent grants included terminology and phrasing indicating that the patent conferred a right which was transferable inter vivos and mortis causa.  That is, the right could be licensed or transferred to another, and could be exercised by one’s heirs during the period of the grant.  The statutory period of protection was ten years, but the terms were negotiable.  Patents were recorded granting protection for five years, and for 25 years or longer, but some grants lasted for 50 years.  From 1500 until about 1550, grants were most often for 25 years.^[13]

 

            The period from 1400 to 1550 represents the peak of Venetian prosperity and economic power.  The fall of Constantinople to the Turks in 1453 aided this concentration, because it initiated a significant influx of craftsmen and artisans from the east into Venice and other Italian city-states.  The Venetian monopoly on trade with the east was broken in 1488 with the discovery of a sea route to the Far East around the Cape of Good Hope by Portuguese explorers.  Thereafter there would be an outflow of craftsmen and artisans from Venice and other Italian city-states to other parts of Europe, taking with them not only knowledge of a particular craft, but also an awareness of the Venetian patent custom.   All of the basic patent rules developed in Venice were preserved in subsequent systems, including that in the United States.

 

Germany

 

            The Holy Roman Reich of the German Nation - the famous “Thousand Year Reich” - was established by Charlemagne as part of the Holy Roman Empire in 800 C.E. and lasted until it was dismantled by Napoleon in 1806 prior to his invasion of Russia.  From at least 1484 onward, patents were granted by the Holy Roman Emperor and by various local sovereigns.^[14]  It is thought the German custom was influenced by Venetian practices and developed independently of English law.

 

Applications were inspected for novelty and operability.  The application required a clear statement of what was claimed, and prior art had to be distinguished.  Some grants were restricted so they did not infringe on earlier grants.  Injunctions, fines, and confiscation were ordered for infringers.  The terms varied between five and 20 years.  The grants were assignable and heritable. 

 

While it flourished, the German patent custom was as prolific as that of Venice, but the system was destroyed by the ravages of the Thirty Year’s War (1618 – 1648), which spread devastation and disease throughout the German states.  Almost all of the European powers were involved, but the war was fought primarily in Germany territory between Catholics and Protestants, each supported at one time or another by armies raised by other European countries.  The war was one of the most destructive conflicts in European history.  Entire regions were denuded and destroyed by marauding armies, which were expected to forage for food and supplies while they were in the field.  Entire villages were destroyed and there were widespread looting, pillage, and atrocities.  In the wake of the armies came famine, malnutrition, and disease.  Bubonic plague was spread; typhus and dysentery became epidemic.  It is estimated that 30% of the population of the German states was destroyed, although the losses varied by region.  Württemberg lost three-quarters of its population; Brandenburg lost one-half.  In some areas an estimated two-thirds of the population died.  Overall, the male population of Germany was reduced by almost 50%.  After six years of negotiations and a series of separate treaties, the war was ended in 1648 with the Peace of Westphalia. 

 

            By the end of the war, Germany was fragmented into more than 300 political entities, ranging from states the size of Bavaria and Prussia to loose alliances of single free cities.  These fell to quarreling among themselves.  It took more than 200 years for the Germans to recover from the exhaustion and impoverishment caused by the war.  During that time, each city, state, or confederation had their own system for protecting inventions.  For example in Prussia, the largest state, patents were granted in an arbitrary manner as royal privileges.  After great expense, the applicant might be given a patent which would last for a few months, or up to five years.  In some years 75 or 80% of all applications were rejected.^[15] 

 

            Germany was not politically united until 1871, under Otto von Bismarck – the last European country to achieve national unity.^[16]  During the first six years of the newly-formed German Empire, each state adopted its own patent policies.  Alsace-Lorraine favored a French-style system.  Hamburg and Bremen did not offer patent protection at all.  Although many German economists thought a patent law would be detrimental to commerce and argued against it, engineering societies and other inventors advocated for it and by 1877 the first German patent law was passed.^[17] 

 

            The German patent system was influenced by developments in the United States and itself became a model for Argentina, Austria, Brazil, Denmark, Finland, Holland, Norway, Poland, Russia, and Sweden.  The 1877 statute provided for the grant of a federal patent and established a centralized administrative office.  Unlike the United States, the Germans adopted a “first to file” system which remained in place until 1936 when the National Socialists introduced a first to invent system.  Applications were examined at the Patent Office by examiners who were expert in their field.  Applicatons were examined for novelty, nonobviousness, and for usefulness – whether the invention was capable of producing greater efficiency.

 

            Patent applications were opened for public inspection for eight weeks before the patent was granted, during which time an opposition could be filed challenging the validity of the patent.  Both the claims and specification were published before the patent was granted.  The patent fees were deliberately high, including fees for renewal, to discourage trivial patents.  The initial term was for 15 years, extended in 1923 to 18 years.  A patent could not be obtained for food products, pharmaceuticals, or chemical products, but the process of manufacture could be patented.  It was thought this would encourage efficiency and productivity by encouraging inventors to “invent around” existing manufacturing processes.  The German system included an early application of the “work for hire” doctrine that allowed employers to claim the rights to inventions developed by workers as part of their contract of employment.

 

            German courts interpreted patent rights broadly.  The penalties for knowing infringement included fines as well as the possibility of imprisonment.  The patent could be revoked if the invention was not worked within three years, if the owner refused to grant licenses for an invention that was deemed in the general public interest, or if the invention was being exploited primarily outside of Germany.  Rather than revocation, in most cases a compulsory license was granted.

 

            In 1891 the Germans introduced a weaker system of utility patents, sometimes called a “petty patent,” which was granted for three years with the option of a single three-year renewal.  The invention could be represented in drawings and required only a slight degree of novelty.  About twice as many utility patents were granted as examined patents.          

 

France

 

            The French had a system for granting non-exclusive trading and import rights by the early 16^th Century.  Patents were granted by the king, whose acts had to be approved by the Parlement de Paris to acquire binding force.  Patents required utility and novelty, that is, following the Venetian practice, novelty within France.  The patent was transferable.  Terms were from five to 30 years. 

 

France was a major beneficiary of the migration of artisans and craftsmen from Venice and other Italian city-states.  In 1536, Etienne Turquetti obtained a privilege for the production of silk from the municipal government of Lyons, which was subsequently approved by the King.  Earlier attempts to encourage silk production in France had failed.  The grant allowed Turquetti to import foreign workers, who were given loans and exempted from taxes.  Official papers indicate that Turquetti lived to see 12,000 persons employed in the silk industry that he had created.^[18]  In 1551 a monopoly was granted to an Italian from Bologna “for glassware according to the manner of Venice.”^[19] 

 

            But the French had an inconsistent history for protection of foreigners which discouraged immigration.  The Albigensian Crusade was a 20-year internal campaign instigated in 1209 by Pope Innocent III, to eliminate the heresy of the Cathars of the Languedoc region of France, who refused to accept Catholicism.  The Pope enlisted noblemen from northern France to campaign against the Cathars, promising them the Cathars’ properties when they were overcome.  It is estimated that 200,000 people died during the crusade, which lasted from 1209 until 1229.^[20] 

 

            Between 1562 and 1580 there were seven religious civil wars between French Catholics and French protestant Calvinists, called Huguenots.  Both sides had private armies and conducted assassinations and massacres.  The most extensive conflict began in Paris on St. Bartholomew’s Day with the assassination of a Huguenot leader by French soldiers, followed by widespread killing which soon spread to outlying regions.  The pogrom lasted for several months; as many as 100,000 French Huguenots were murdered.^[21]  Eventually King Henry the IV of France issued the Edict of Nantes in 1598 granting substantial rights to French Calvinists, including the right to work in any field and the right to bring their grievances directly to the King.^[22]  The Edict did not include Jews or Muslims.  Muslims were expelled from France in 1610. 

 

            In 1648, in a revolt known as the Fronde, French magistrates and businessmen revolted against burdensome taxes which had been levied originally to pay for the French part in the Thirty Year's War.  The populace came onto the streets of Paris to support the revolt, and Louis XIV, the boy king, his mother, and cardinal Mazarin, who acted on the King’s behalf, were forced to leave the city.  There followed a period of internal division and civil turmoil in which the central government lost control of some parts of the country.  In some areas crops were destroyed and famine resulted. 

 

            In 1685, Louis XIV, now king in his own right, renounced the Edict of Nantes and declared Protestantism illegal in France. 

 

            During this time intellectual property rights developed slowly.  In 1666, the French Minister of Finance, Jean-Baptiste Colbert, established the Free, or Parisian Academy, which later became the French Académie des Sciences.  The Academy was modeled after academies founded in Italy during the previous century.  French kings now started to consult their scientific advisors on patent applications, creating a routinized system of patent examination to determine whether or not the invention was new and useful.  Applicants submitted drawings, models, and specifications to the Academy in support of their applications.  Special examiners were also appointed by the Parlement to investigate the “value” of inventions.  While the Academy examined an invention for novelty and utility, the Parlement was most interested in the potential commercial success of the invention and the prospective tax value of the enterprise. 

 

            In 1699, the King gave the Academy written regulations, the first law incorporating an examination system for patents.^[23]  After 1730, the government began to appoint scientists to work within the Bureau du Commerce to examine inventions.  By the end of the 1700’s, it was common for French grants to contain a clause requiring the inventor to deposit a model of his invention in a public repository which was established for that purpose.  By 1750, more than 500 patents had been granted under the examination system. 

 

            In 1762, a statute fixed the patent term at 15 years.  The statute provided that a patent would lapse if the patentee had failed in attempts to put the invention to use, or had not used it at all in the year following the grant.  Drawing on the parallel with rights in written works and designs used in silk making, subsequent statutes and legal thought in France developed the idea that property rights in inventions were entitled to the same legal protections as other forms of intangible property.^[24]  In this respect, the French patent laws of 1787 went beyond the first American patent law of 1790.  The system was sufficiently rigorous that innovative thinkers, such as Pascal, Huygens, and Leibnitz, found it difficult to obtain patents.  During the 17^th and first half of the 18^th Century, France was the most technologically advanced country in Europe, although it was soon overtaken by the Industrial Revolution in England.

 

            By 1791, patentees could file through a simple registration system.  The inventor decided whether to obtain a patent for five, ten, or fifteen years, depending on the fee.  Renewals were costly and could only be granted by the Parlement.  Until 1844, patents were voided if the inventor attempted to patent the invention in another country.  On the other hand, the person who introduced a foreign patent into France enjoyed the same “natural rights” as a native inventor.  Patentees had to put the invention into practice within two years, or face a tribunal to explain the delay.  The working requirement could not be satisfied by importing the device, even if the patentee had it manufactured in another European country.  Patent rights were restricted if the invention was related to processes controlled by the French government, such as printing or the manufacture of firearms.

 

            Patentees were expected to describe the invention in terms that would enable someone skilled in the art to practice the invention, but no provision was made for publication of these descriptions.  Until 1902 printed information was limited to brief titles in patent indexes.  Specifications were only available in manuscript form in the office in which they had originally been lodged and restrictions were placed on access.  Viewers had to state their motives, foreigners had to be assisted by French attorneys, and nothing could be copied from the manuscript until the patent had expired.

 

            To further encourage industrial development, the French government established the Sociétié d’Encouragement pour l’Industrie Nationale, which awarded medals each year to stimulate new discoveries in areas they thought worth pursuing.  At times the Sociétié purchased patent rights and placed the invention in the public domain.

 

            Contracts for assignment of patent rights were slow to develop.  Assignments were filed in the office of the Prefect of the district, but there was no central source of information so it was difficult to trace the records of assignment.  The annual fees for the entire term of the patent, which could be paid in installments by the inventor, had to be paid in advance if the patent was assigned to another party.  Assignments and licenses were issued with a caveat, stating that the French government could not guarantee the validity of the patent or the contract.

 

Netherlands

 

            Monopoly patents were established in the Netherlands by the middle of the 16^th Century.  The Italian connection is evident.  During the period from 1533 to 1580, some 117 Italians became citizens of Antwerp, then part of the Netherlands, and established a number of new industries.  Between 1560 and 1580, of 23 patents issued, five were to Italians.^[25]  The early patent custom in the Netherlands in the 16^th and 17^th Centuries was both advanced and prolific.  During the 16^th, 17^th, and 18^th Centuries, 574 patents for invention were granted by the States General and 283 were granted by Holland.  By the early 17^th Century, Holland had become one of the most advanced industrial regions in Europe, with industries in sugar refining, brewing, tobacco cutting, silk throwing, pottery, glass, armaments, printing, and paper making.  An applicant was required to clearly delineate the subject matter covered by the patent.  The application was examined by a committee appointed for that purpose.  The claim was used to provide evidence as to the nature of the invention in case of later litigation, rather than for public education.  Novelty was required, either for invention or importation.  The invention had to be worked within a specific time, typically one year, or the patent lapsed.^[26]

 

            During the Middle Ages guilds were strong and only weakened gradually.  Guilds opposed the granting of monopolies which threatened their exclusivity.  Guilds regulated trade, prices, working conditions, and wages.  The most powerful of the merchant guilds was the Hanseatic League, which was founded in trading centers on the coasts of the Baltic Sea near the beginning of the 13^th Century.  By the end of the 14^th Century, 64 major cities were members.  London was the only English port admitted to membership, but most English commerce was controlled by the League until the 15^th Century.^[27]

 

            During the mid-1800’s a strong anti-patent sentiment developed in Europe.^[28]  In 1863 the Congress of German Economists declared patents to be “injurious to the common welfare.”  The movement had its greatest success in Holland, which abolished patents entirely in 1869.  It is not clear whether during this time there were improved or deteriorating rates of innovation and invention.  The patent system in Holland was reinstated in 1912.

 

England

 

            Guilds developed in England during the 11^th Century.  They flourished during the 13^th and 14^th Centuries and continued in existence, although in gradual decline, into the 18^th Century.^[29]  The earliest English guilds were merchant guilds, chartered to have an exclusive right to sell particular goods within a particular town.  Each member of the guild could compete with other guild members, but the charter prohibited competition by non-members.  The 12^th Century saw the formation of craft guilds, which gradually became preeminent over the merchant guilds.  In return for monopoly rights, the craft guilds regulated prices, wages, working conditions, the quality of the goods manufactured, and the right to practice within the jurisdiction.^[30]

 

            English foreign trade was regulated by the Hanseatic League during this period.  The trade was mostly for the export of wool and the import of various manufactured goods, and certain foods, including wine.  The local agent of the Hansa was the Merchants of the Staple, who controlled the trade in wool for two and a half centuries.  With the development of cloth manufacturing, however, the role of the Hanseatic league was gradually replaced by the formation of chartered trading companies which were given exclusive rights to trade in certain products.  The final withdrawal of the Hanseatic trading privileges was accomplished during the reign of Elizabeth I.^[31]

 

            English kings did much of their state business by means of charters, letters patent (open letters), and letters close.  Letters patent were used to set forth public directives.  Letters close were used to provide private instructions to individuals.  Charters were used for more solemn acts.  Royal charters and letters patent were similar in content and differed only in form.  Separate records, or “rolls,” were kept for each of the three types of state papers.  The Charter Rolls extend from 1199 to 1515, after which royal grants were made in the form of letters patent.  The Patent Rolls begin in 1202 and extend to the present.  The Close Rolls began in 1205.  The Patent Rolls contain grants, proclamations, and commissions of all sorts and were open to public inspection.  There were no subdivisions as to content.  The Rolls were kept in more or less chronological order and stored in one of three offices.^[32]  In England, when a patent is granted, it is said to be “enrolled.”

 

            English industry was far behind the rest of the world during the Middle Ages.  As late as the 16^th Century, England was composed mainly of pastoral and mining communities, with manufacturing controlled by local guilds.  The Crown was often in conflict with the guilds over major questions of taxation, religion, and foreign policy.  English sovereigns were eager to attract skilled artisans to England to develop manufacturing industries.  King Edward II (1284-1327) and Edward III (1312-1377) deliberately fostered English industry, inquiry, and invention.  Edward II was the first monarch to establish colleges in the universities of Oxford and Cambridge.  He invited skilled German miners to come to England and gave them his protection.  In return they were to teach Englishmen how to practice their art.  His son, Edward III, took special steps to protect and develop the cloth industry, linen weaving, clock making, and the silk trade.^[33]  While the guilds continued to exercise an important influence, as the number of patents to individuals increased, guild power declined.   In time, cloth making, mining, metal working, coining, ordnance production, glass making, engineering, clock making, sugar manufacturing and paper manufacturing developed into mature industries due to the introduction of foreign artisans.

 

            The initial invitations to foreign workers did not grant exclusive monopolies.  They merely offered foreign artisans the King’s protection and certain privileges if they came to England to practice their trade.  Over time, however, patent letters came to be used to grant monopoly rights.  The first such letter was granted by Henry VI in 1449 to a Flemish man for a 20-year monopoly on the manufacture of stained glass, which was destined for Eton College. 

 

            The first petitions for monopoly rights were presented in England in the mid-16^th Century by Venetian immigrants.^[34]  Queen Elizabeth I (1533-1603) recognized the value of rewarding inventors.   During her reign she granted at least 51 monopoly patents for industries and invention. As many as 2/3 of them went to aliens or naturalized subjects for the importation of new industry.^[35]  Foreign grantees were expected to introduce the new art, train native artisans, and practice the art for a period of time in England until it became well established.  The patentees could not prohibit the use of methods of manufacture which were already established in England.  The practice had to be “new” to England – that is, not practiced in England within living memory.  Quality and price requirements were often written into the grants.  The goods produced had to be made available for a lower price than would result if the same commodities were imported.  Some provisions required periodic inspection for quality, or fixing a minimum manufacturing output. 

 

            The crown could revoke a patent for “inconveniency,” which included interference with existing trade, increased prices, or infringing the exclusive manufacturing or trading rights granted to towns, guilds, or trading companies.  No patent could be granted if it would interfere with any of the monarch’s existing sources of revenue.  There was almost no requirement for a description or specification of the art to be covered.^[36]  Mere improvements were not patentable.  During this period, patent disputes were resolved by the Queen’s Council, or in the Court of Star Chamber, which were crown courts controlled by the sovereign.  It was thought that submitting patent disputes to common law courts would result in encroachment upon the exclusive right of the sovereign to issue patent grants, a right the English sovereigns uniformly sought to preserve.

 

            Unfortunately, to raise money, Elizabeth also granted “odious monopolies,” exclusive grants which restrained established trades or industry.  In return for payment, monopolies were granted for common goods, such as salt, sulfer, paper, soap, playing cards, ale, sweet wine, or cloth.^[37]  A patent granting an exclusive right to sell wine led to street riots in London.  Annual “rents” on the patents had to be paid to the Crown, or to the Queen’s favorites.  Elizabeth frequently granted the right of supervision; the patentee had the right to search, arrest, or fine supposed infringers.  Instead of contributing to the common good, patentees raised prices, harassed their competitors, and attempted to restrain trade. 

 

            Aggrieved competitors had very little avenue for complaint or redress.  The infringers could not take their case to common law courts since Elizabeth asserted the absolute right of jurisdiction in disputed cases.  The crown courts were apt to regard non-compliance with the requirements of the patentee as showing a lack of respect for the Queen’s authority.  Whenever the issue was raised in Parliament, it was similarly regarded as an attack on royal prerogative.  The abuses resulted in hindrance to trade and manufacture, high prices, inferior goods, and unemployment.^[38] 

 

            In November, 1601, Parliament debated “An Act for the Explanation of the Common Law in Certain Cases of Letters Patents,” which opened a powerful diatribe against the “monopolitans.”  Elizabeth responded by sending a message to the House of Commons in which she granted that errors might have been made in individual cases but explained that they were not deliberate.  Elizabeth opposed the Act, since it failed to address interests both she and her subjects wished to protect.  She suggested that if the bill were withdrawn, she would submit her existing patent grants to “a Tryal according to law,” i.e., disputes about existing patents could be tried in common law courts.  The Parliament quickly withdrew the bill.^[39]  Although Elizabeth’s proclamation was clearly limited to existing grants, subsequent English cases interpreted the agreement to apply to subsequent patents as well.^[40]  The courts held that monopolies were against the common law and personal liberties because they damaged those working in a trade, as well as other subjects by raising prices, reducing merchantability, and reducing employment.  An exception was made, however, for monopoly patents given to anyone who brought a new trade into the realm.

 

            James I ascended the throne in 1602.  He began his reign on a note of caution, issuing a proclamation which suspended all grants and monopoly charters until they could be reviewed and affirmed by his Privy Council.  But he soon fell into the practice of issuing monopoly patents to court favorites.  In 1606 the Committee on Grievances of the Parliament petitioned for relief from the monopolies that had been granted.  James did nothing and the matter was again taken up by Parliament in 1610.  James responded by issuing a declaration, which came to be known as the Book of Bounty, in which he declared that monopolies were against the law of the land, but reserving to the crown the right to reward “projects of new invention.”  Parliament again deferred action and James continued to issue monopoly patents for the next decade.^[41]

 

            Public outrage at “odious monopolies” finally became so great the Parliament was forced to act.  In 1620 - 1621, an extensive review was conducted in the House of Commons.  As many as 80 petitions of grievance were presented to the Committee on Grievances.  A bill was passed in the Commons revoking monopolies, but died in the House of Lords.  James responded by revoking 18 patents and declared that disputes regarding 17 others might be taken to the common law courts.  James’ response was little more than a repeat of Elizabeth’s actions, but this time it did not satisfy the complaints.  In 1623 the Parliament passed the Statute of Monopolies and James assented.^[42]  The Statute was a recapitulation in statutory form of existing common law, and became the basis for English patent law for the next 200 years.  The Statute liberalized patent law, restricted the royal perogatives, and refused a patent for mere “selling or using.”  It allowed monopoly rights for 14 years to “the first and true inventor,”^[43]  including an importer of foreign discoveries.

 

            The statute declared that henceforth, patents would only be granted for "new manufactures," with the validity of all monopoly grants to be determined by the common law courts.  An aggrieved party had the right to recover treble damages and double the costs of litigation.^[44]   On its face the Statute of Monopolies outlawed all monopoly licenses, but it was interpreted as permitting patents as an exclusive license for new inventions.   No patents could be issued for improvements.^[45]  There is no mention of the patent as a property right which might be traded or sold, nor was the crown obligated to issue a patent as a matter of right.  For the next 200 years, patents would be issued at the discretion of the crown and the courts construed patents narrowly.  In the subsequent climate of hostility to monopolies, significant inventions were denied patents, including an invention for armor plate, the water closet – a health measure which was not brought into general use for another 150 years – the stocking frame for knitting, and a method of land reclamation.  The inventor of the stocking frame took his invention to France, where it was accepted and patented.^[46]

 

            Although the Statute of Monopolies declared patent disputes to be under the jurisdiction of the common law courts, in practice for the next 100 years the crown’s Privy Council continued to exert exclusive jurisdiction.  For example, in 1626 a glass maker sought to challenge a patent granted to Sir Robert Mansell and prepared to bring suit in the common law court.  The Privy Council intervened, first declaring Mansell’s patent to be valid under the terms of the Statute of Monopolies, and then withdrawing the case from the jurisdiction of the law courts.  It was not until 1752 that the Privy Council voluntarily gave up the authority to oversee patent cases.  For the next century there were few common law cases and almost no evolution of English patent law.^[47]  Between 1750 and 1799, only 39% of common law cases were decided in favor of the patentee.^[48]  Patentees were reluctant to bring suit for infringement when there was a good chance their patents would be invalidated as a result. 

 

            Under the British system, applications were registered rather than examined and the requirement for disclosure developed slowly.  Patents during the reign of Elizabeth required at least minimal disclosure.  The practice of disclosure developed partly at the initiative of patentees themselves.  In 1611, Simon Sturtevant, a manufacturer of tiles and paper, applied for the grant of an exclusive right to the use of coal in industries in which wood was used.  Sturtevant promised to provide an explicit statement of his invention once the right had been granted.  He suggested the value of doing this included: 1) it would show his invention was new and not stolen; 2) it would show the limits of his invention – other persons would not be prevented from making related inventions which lay outside the boundaries of his; 3) it would show that no one else had petitioned the King for the same invention.  Sturtevant perceived that he could protect the validity of his invention by defining its scope in a complete specification. 

 

            During the reign of Queen Anne (1702-1714) lawyers of the English Court under the offices of the Attorney General and the Solicitor General, developed the requirement that a written description of the invention, ascertaining its nature “and the manner in which it is to be performed”^[49] be submitted with the application.  Initially the description served to distinguish the prior art and to map out the limits of the invention being claimed.  Gradually the requirement changed from one requiring almost any type of description the inventor wished, to one requiring disclosure as the consideration for the patent grant.  A patent of 1718 to James Puckle for a machine gun was one of the first which required a specification.  

 

            One factor driving the change was the nature of the granting process.  To receive a patent, a favorable report from the law officer examining the case was required.  It was also difficult to change a patent once it was granted, since the terms of an enrolled patent could only be changed by an act of Parliament.  As a result, law officers developed a set of standard phrases which were routinely inserted into patent grants.  Among these was a paragraph which provided that if the patentee did not provide a written description of the invention within six months, the patent would be void. 

 

            Beginning in the 1600’s, patent officers maintained a Caveat Book.  Interested persons could enter “caveats” or oppositions to patents in areas of concern.  The caveats were valid for three months and could be renewed with payment of a fee.  They could be entered at any time prior to the sealing of a patent.  It was thought that many of the caveats were prompted by guild interests.  Caveats were entered for “any patent for tobacco-pipe clay,” “any invention for raising water to be conveyed by pipes into London,” and for “casting large looking-glass plates.”^[50]  When a petition for a patent was presented, the Caveat Book was routinely searched.  If a caveat was found a hearing would be held and the law officer would decide whether the petition could proceed.  There was no inquiry as to priority of invention.  If the challenger could point to knowledge of the invention – however he had obtained it – the petition would be denied.  Inventors were reluctant to reveal the details of their invention, fearing that competitors might steal it from them before the patent could be granted.  Providing a full description of the device after the patent was granted was one way around this dilemma.

 

            Early English patents required working.  The grantee had to put his invention to use or sell its products within a specified period of time or the grant would be void.  Working the invention was the quid pro quo or the consideration in return for which the monopoly was granted.  Sturtevant’s grant was issued in 1612 but the patent was cancelled the following year because he failed to work it.  By the mid-1700’s, working was gradually replaced in English case law by disclosure as the consideration in return for which the monopoly was granted.  This was the third factor driving the development of the specification requirement. 

 

            In the landmark case of Liardet v. Johnson (1778),^[51] Lord Mansfield, the presiding judge, outlined in his instructions to the jury that if Liardet’s specification was not sufficient to instruct others in the use of his invention (a formulation for concrete or stucco), his patent would be void.  The jury instructions were not necessary to decide the case – none of the parties had questioned the sufficiency of Liardet’s specification – but they stated in authoritative language the rationale for granting the patent: that after the term of the patent is over, the public shall have the benefit of the invention.  By the end of the 18^th Century, it became settled law in England that working the invention was not the consideration per se.  The consideration was adequate disclosure.

 

            During this period it was established in English case law that prior public working, prior sale, or prior publication could be used to defeat novelty and invalidate a patent.^[52]  If the information as revealed in the specification did not teach the public something new, then the consideration for the grant was lacking.  Although the Statute of Monopolies did not include patents for improvements, in practice the law officers realized that most inventions could be characterized as improvements over existing manufactures and recommended patents on these inventions.  But infringers frequently raised the defense that the device was merely an improvement over existing technology and the patent was invalid.  In Morris v. Bramson (1776), Lord Mansfield accepted the practical reality and held that improvement inventions were patentable.^[53]  In 1799 in Hornblower v. Boulton, Lord Kenyon further broadened the definition of what could be patented as “something made by the hands of man.”^[54]  While abstract theories, principles, or articles occurring in nature could not be patented, a patentable invention could be discovered by accident and did not need to be commercially viable.

 

            The English application process, which remained relatively unchanged for 300 years, was time-consuming and expensive.  It required several months’ stay in London, visiting first one government office and then another, with fees to be paid at each office.  Ten separate steps were required, passing through seven different offices, and requiring two separate signatures by the sovereign.  If the patent was extended to Scotland and Ireland, five separate offices in each country had to be visited.  The requirement for a specification, which developed at the end of the 18^th Century, added an eleventh step.^[55]  By the end of the 18^th Century, an English patent cost between £100 and £120 at a time when only five percent of the population had incomes over £60 per year.  A patent that covered Ireland and Scotland could cost £350.  Adding a co-inventor cost £24.  Obtaining an act of Parliament to extend the term of a patent could cost £700.  One result was an entrenched system.  Patent fees provided an important source of revenue for the Crown, and created a class of administrators who had strong incentives to block proposed reforms.

 

            An English patent was valid in England, Wales, Berwick-on-Tweed^[56] and, if specifically requested, in the colonies and plantations, although enforcement there was negligible.  Scotland (1707) and Ireland (1800) had been united with England, but both retained separate patent systems until 1852.  If an inventor sought patents in Scotland and Ireland the costs tripled.  Few patents were sought in all three countries unless the invention was extremely valuable. 

 

            The English system was essentially a registration system.  The law officers had neither the resources nor the expertise to determine priority of invention.  The first person to register got the patent.  Novelty was taken on trust, based on the inventor’s affirmation.  The law officers’ primary obligation was to protect against any threat the patent might pose to royal revenues.

 

            To meet these concerns, the Patent Law Amendment Act of 1852 overhauled the British patent system, laying down a simplified procedure.  Prior to this time patents could be filed in any one of three offices and were not published or indexed, making a prior art patent search a laborious and error-prone process.  Patent specifications were open to public inspection on payment of a fee, but only at the patent office where they were filed.  The amendments established a staff of patent examiners who could carry out a limited examination.  The examination insured the specification adequately described the invention but did not inquire into novelty.^[57]  Separate patents for England, Scotland, Wales, and Ireland were replaced by a single patent, valid throughout the U.K.  Patent specifications were to be officially published and indexed.  The law established a renewal system with fees payable in installments and the fees were substantially reduced.  The initial application cost £25 and later fees were £50 after three years and £100 after seven years.  Despite the reduction of fees, between 1852 and 1880 the patent office made a profit of over £2 million.

 

            A subsequent Act of 1883 established the Office of the Comptroller General of Patents or “Great Seal Patent Office” and further reduced the fees.  The fee for an initial term of four years cost £4.  The remaining £150 could be paid in annual increments.  For the first time, applications could be submitted by mail.  Opposition proceedings were introduced, allowing interested parties to contest a proposed patent within two months of the time it was filed.  Other provisions were introduced to thwart foreign competition.  Compulsory licenses could be granted to prevent foreign investors from injuring British industry by refusing a license to British manufacturers.  Licenses of right permitted British manufacturers to compel foreign holders to license patents on pharmaceuticals and food products.  Patentees who manufactured abroad were also required to make the patented product in Britain. 

 

            By the end of the 18^th Century four rationales for the existence of a patent system had developed.  First, that individuals had a natural or inherent right of property in their own ideas.  It was the obligation of society to protect that right.  Second, that inventors deserved to be rewarded in proportion to how useful their inventions were to society.  Third, an increase in the number of inventions is desirable for economic growth; rewarding inventors increases the supply of inventions.  Fourth, the system assures public dissemination of technical information which might otherwise be kept secret.^[58]

 

            The Patents Act of 1977 harmonized United Kingdom patent law with the European Patent Convention.  After this, U.K. patent law is based on an amalgam of U.K. and European practices. 

 

United States

 

The Colonial Period

 

            The colonists were familiar with English monopoly laws and continued to follow English legal practice, although they were not always clear about exactly what rights were conferred.^[59]  There was no consensus in England that common law would apply in the American colonies.  Two attempts by colonial legislatures to re-enact English statutes were disallowed.  Acts of Parliament were held not to apply to the colonies unless specifically mentioned.  British "patents" were monopolies granted by the King and often gave the exclusive right to trade in a particular item to a preferred vendor.  As British subjects, the colonists were required to deal only with that vendor.  Think of the Boston Tea Party. 

 

            English monopoly grants were occasionally given to specific entrepreneurs in one of the colonies.  More important were grants to colonial governors or those in their entourage.  In 1687, the Duke of Albemarle, recently appointed governor of Jamaica, received a patent for the sole right of erecting saw mills powered by wind or water in the colonies, excluding those in New England.^[60]  Salt, the importation of machinery, methods for curing tobacco or corn, and methods of weaving were other potentially lucrative monopolies.

 

            Some colonial assemblies simply assumed the authority, and granted legal protections and exclusive licenses.  Individual bills were passed on a case-by-case basis, but no colony established a public patent statute.  A Massachusetts statute of 1672 prohibited making copies of a printed work without the consent of the owner, clearly implying a property right.  Connecticut allowed patent monopolies for such matters and times as were deemed “profitable for the country.”^[61]  William Penn’s Frame of Government for his new colony directed the governor and provincial council to encourage and reward authors and inventors. 

 

            Some bills were to protect a local market or put a particular article of trade under the control of a particular seaport.  In 1646 the Massachusetts General Court - the Massachusetts legislature at the time - granted an exclusive license to Joseph Jenks, Sr. for erecting mills using an improved mechanical system for water.^[62]  Jenks used the mills to make edged tools, such as scythes.  His design improved on the existing scythes, which were thick, heavy, short, and slow.  His improved design was in use in commerce for 300 years thereafter.^[63]  The monopolies which were granted seldom included a requirement for working of the invention, and there was almost no requirement for teaching the art or trade to others.  Nor was there a requirement for a specification, although this had become standard practice in England.^[64]  Several bills included specific statements of high fines to be levied for infringement.  None of these grants were called “patents,” which would have implied usurping the royal prerogative.  They were called “bills” or “laws” and the grantee referred to them as “my law” or “my bill.”

 

            The Continental Congress

 

            There were two Continental Congresses.  One met from September 5 to October 26, 1774 at the start of the Revolutionary War.  The second met from May 10, 1775 to March 2, 1789.  There were no requests for monopoly grants during the War.  The second Congress could not officially act on behalf of the country until the Articles of Confederation were ratified by all of the states, which was not accomplished until Maryland ratified in 1781.  Article II stated that each state retained every power, jurisdiction, and right not explicitly granted to the Congress.  There was no grant of power to establish a system of patent or copyright.  Each state could encourage agriculture, arts, manufactures, and commerce in any way they chose.^[65] 

 

            Between 1783 and 1786, twelve states enacted general copyright statutes.  Only the South Carolina statute extended protection to the inventors of useful machines.^[66] Several of the preambles state that no one is so clearly the master of his goods as a man is the master of the products of the labor of his mind, a clear recognition that an inventor was entitled to protection as a matter of right.^[67]  This was a departure from English custom, where the grant of a patent (or copyright) was at the discretion of the sovereign.  Instead of a formal system for granting patent protection, state legislatures continued the practice of passing individual bills.

 

            This unwieldy state-by-state system required an inventor to apply to each state for a patent and led to inconsistent results.^[68]  A grant from one state was unenforceable in another.^[69]  States issued patents to different inventors for the same or similar inventions.  An inventor might be granted a patent in one state but denied it in another.  The terms of the grants, the requirements for working, the lengths, and the requirements for a description of the invention or process might vary.^[70]  A person in New Jersey who held a patent for a steamboat could be prevented from operating in New York waters and the steamboat seized if the boat infringed on a New York patent, and vice versa.^[71]  This was a system which was obviously unfavorable to inventors and interfered with the development of interstate commerce.   To remedy the problem, the Framers gave the new federal Congress the power to create a national patent system.^[72]

 

            The Constitution

 

            The Constitution provides, "The Congress shall have Power ... [t]o 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."^[73]  This is the only one of the enumerated powers in which the Framers give specific instructions on how to exercise the power.  The new government was discussing assuming state debts which arose from the Revolutionary War.  Giving a monopoly grant was a way of rewarding inventors without giving the new Congress a general power to create monopolies, and without incurring further debt for the federal government in the form of bounties or monetary rewards for invention.^[74]

 

            There is fairly good evidence that the intellectual property clause was proposed by James Madison, who was a member of the Committee on Detail which drafted the final version, and Charles Cotesworth Pinckney, the delegate from South Carolina.  South Carolina was the only state which had drafted a patent statute while the Articles of Confederacy were in effect.  Pinckney was a member of the South Carolina legislature when the statute was adopted, and he knew the value patents would have for artisans and inventors in his state.   In Federalist Number 43, Madison wrote, “The utility of the clause will scarcely be questioned.  The copyright of authors has been solmnly adjudged, in Great Britain, to be a right of common law.  The right to useful inventions seems with equal reason to belong to inventors.  The public good fully coincides in both cases with the claims of the individuals.” 

 

            For some time after the Constitution was ratified and the government established, there was a legal theory that states might hold “concurrent” power with the federal government.  In Gibbons v. Ogden, a conflict between steamboat operators between New York and New Jersey, the Supreme Court established the supremacy of Congress to regulate commerce between the states.  The Federal power is supreme where there is a significant federal interest.^[75]

 

            The Patent law of 1790

 

            The first patent statute, which Jefferson helped write, was passed by the Second Congress in May of 1790.^[76]  The period of protection was 14 years.  Departing from the English practice, patents for imported devices were excluded.  Another departure from English practice was the definition of novelty.  A device was not novel if it was previously known or used anywhere in the world.  It was not novel, even if it had fallen into disuse.

 

            The initial procedure required submission of a working model of the device.  Three government officials, the Secretary of State (Jefferson), the Secretary of War (Henry Knox), and the Attorney General (Edmund Randolph) made up the Patent Board.  The agreement of any two of them was required for a patent to be granted.  The Act required the members of the Board to examine each patent application to ascertain whether “they shall deem the invention or discovery sufficiently useful and important, to cause letters patent to be made out.”^[77]  Jefferson referred some applications to personnel from the University of Pennsylvania to assist in the evaluation.  The first patent was granted on July 30, 1790 to Samuel Hopkins of Philadelphia for a method of producing potash (potassium carbonate), an essential ingredient used in making soap, glass, and gunpowder.^[78]  Fifty-seven patents were issued under the Act of 1790.^[79]  It is likely that at least some of these were patents for devices which had already been patented in England.

 

            Jefferson and the other officials of the Patent Board found the procedure time-consuming and burdensome.  Jefferson felt he was called upon to make decisions as to patentability for matters about which he knew little, decisions which gave him “the most poignant mortification.”  He agonized over being obliged to give “undue & uninformed opinions on rights often valuable & always deemed so by the authors”^[80]and was glad to be free of the obligation.

 

            The Patent Act of 1793

 

            In 1793, Congress passed the second Patent Act.  Once again patents for imported devices were excluded.  In his State of the Union address to Congress in 1790, Washington raised the issue of how best to encourage manufactures, especially in the context of the common defense.  In response, the House asked the Secretary of the Treasury, Alexander Hamilton, to prepare a report on how this objective could best be met.  In December of 1781, Hamilton submitted to the House his Report on the Subject of Manufactures, in which he set forth his recommendations, one of which was to allow patents for imported devices.^[81]  The suggestion was rejected for several reasons.  Madison and Pinckney had originally proposed patents for importation during the Constitutional convention, but several states, including Virginia, New York, North Carolina, and New Hampshire, had refused to sign the draft statement until it had been made clear that Congress could not establish trading or manufacturing monopolies.   Consequently it was thought that permitting patents for imported devices was unconstitutional.  There was also resistance to the prospect of making American manufacturers subservient to English patentees, who could enforce their patents in the United States.  While it was not easy to copy English patents, there was some feeling that allowing patents on imports would deprive Americans of the advantage of being able to freely imitate English inventions without paying royalties.

 

            The new procedure called for registration without examination, a procedure advanced by Jefferson in a draft bill.  Registration was being used in England, and the Congress felt the process there was working well.  The inventor had to submit a written description of the invention, a model, if appropriate, and had to pay a fee of $30.  The inventor had to distinguish, in clear terms, the invention from “all other things before known.”  The 1793 Act made clear that minor improvements were not patentable.  A patent for a significant improvement of an existing device did not give the holder any right to use the original invention (or vice versa).  The Supreme Court eventually held that failure to provide an adequate description would invalidate the patent.^[82]  Treble damages might be awarded for infringement. 

 

            The Patent Board was replaced by a clerk in the Department of State.  James Madison, who was Secretary of State at the time, created a separate Patent Office within the State Department and appointed William Thornton as its first superintendent.  Thornton served as Superintendent from 1802 until his death in 1828. 

 

            The first Patent Act had permitted patents to non-citizens, but the Act of 1893 removed that privilege, mainly to prevent foreigners from obtaining patents in the United States for inventions they had already patented abroad.^[83]  Novelty and priority were accepted on the word of the applicant.  Section 6 of the Act provided a defense in infringement.  The patent was void if it could be shown that the patentee was not the original inventor. 

 

            There was no inquiry as to either novelty or priority, unless there was a subsequent court case for infringement.^[84]  If it could be shown the patent had been obtained falsely, the patent could be annulled or repealed in a court proceeding, but the statute of limitations for bringing the case was three years from the date of issuance.  Only four such cases were reported during the 43 years the Act was in force.  The cases split on whether or not the deception had to be deliberate.^[85] 

 

            Almost 10,000 patents were issued during the 43 years the second Patent Act was in force.  Because there was no examination, it is estimated that a significant number were invalid, if not fraudulent.^[86]   The Superintendent of Patents was powerless to prevent this, however.  The Supreme Court eventually held that once the ministerial requirements were met, there was no discretionary power to withhold the patent.^[87]  The first reported patent case was dated 1804.  Between 1804 and 1835 there were 58 lower court cases, 40 of them decided by Bushrod Washington or Joseph Story, Supreme Court justices who were “riding circuit.”^[88]

 

            By 1805, Congress required the Secretary of State to publish an annual list of patents granted during the preceding year.  After 1832, publication in newspapers of notices of expiring patents was required.  Concerned about public access to patent materials, the Patent Office maintained repositories throughout the country.  An inventor could forward an application to one of the patent repositories, postage free, for processing.  The earliest patent statutes restricted patents to U.S. citizens, or to residents who declared they intended to become citizens.  Because of this restriction, while Americans could not obtain a patent on an imported product or process, they could freely use inventions patented abroad without the necessity of paying licensing fees.

 

            The Patent Act of 1836, 1870, and later Acts

 

            The Patent Act of 1836 was the result of more than 40 years of experience, and sought to correct some of the defects in the old system.  Patents were being issued for things which lacked novelty.  Patents for improvements were fraudulently used as if they were patents on the underlying device.  Fraudulent patent claims were used for extortionate purposes.  After a device was sold, the holder of a patent, or his agent, would appear and claim a fee from the user.  A small shop owner or artisan might be willing to pay a few dollars to someone claiming a “patent” rather than face a lengthy court challenge.^[89]  The length of the patent term was also criticized.  By the time courts ruled on infringement cases many of the patents had expired.^[90]

 

            The new Act established the basic structure of the current patent system.  A separate Patent Office was set up as part of the State Department and trained examiners were hired.^[91]  Applications were to be examined for novelty before a patent could be granted.  Employees of the patent office were not permitted to obtain patent rights.  Henry Ellsworth, who was instrumental in drafting the Act, was appointed as the new Commissioner.  Minimal fees had been established as part of the earlier Acts, and this policy was continued under the new Act.  A report by the Commissioner in 1869 compared the fee for a U.S. patent ($35) with significantly higher charges in European countries, such as Britain, France, and Russia ($450), Belgium ($420), and Austria ($350).  The Commissioner pointed out that the patent system was not intended to raise revenues for the state.  Disclosure was the price paid for obtaining a patent, with the fees merely covered the administrative costs of the Office.

 

            The application had to include a claim, stating with specificity the nature of the invention and distinguishing it from prior art.  The claim must “fully explain the principle ... by which [the invention] may be distinguished from other inventions.”^[92]  This part of the claim - a specification in today’s terms - was examined for novelty.  To begin with, courts read the Act as requiring the specification as part of the claims.  By the 1870's they were reading the Act to require a separate claim section as part of the application.^[93] The Patent Acts of 1870 and 1952 reiterate the requirement for a “distinct claim” as a separate part of the patent application.^[94]  The patent term remained 14 years, but the Commissioner could grant an extension for an additional 7 years. 

 

            Under the Patent Act of 1793 an accused infringer could raise the defense that the invention had been disclosed in a “public work” – i.e., a printed book – prior to the filing date.   The Act did not state, however, that the disclosure in a publication would bar the patent.   The Act of 1836 made prior disclosure in a “printed publication” a bar to novelty and thus to patentability.  The Act retained the “public work” infringement defense.  The Patent Act of 1870 replaced the words “public work” with the words “printed publication.”

 

            The 1836 Act removed all limitations on nationality or residence for receiving a patent.  Discrimination continued, however.  U.S. residents were charged a $30 filing fee, British subjects were charged $500, and all other foreigners were charged $300.^[95]  Laws of 1832 and 1836 required foreigners to exploit their invention with 18 months, but the requirement was interpreted liberally.  The burden of proof was on the person challenging the patent to show that the inventor failed to exploit the patent, or refused to sell the patented item for a reasonable price.  After 1861 patents were available to all applicants without respect to nationality and the requirements for working were dropped.

 

            The examination system introduced by Patent Act of 1836 made patent rights more secure by increasing the likelihood that a patent would survive a court challenge.  Thereafter there was a dramatic increase in patent applications and sales of patent rights.  An elaborate system grew up surrounding patents, including specialized intermediaries who helped inventors obtain patents, venture capitalists, and specialized journals.^[96]  Legal rulings overturned contracts for useless or fraudulent patents.  In 1845 the Patent Office recorded 2,108 assignments, out of 7,188 patents still in force in that year.  By the 1870’s 9,000 assignments were made per year.  The number of assignments increased to 12,000 per year during the 1880’s.

 

            In 1850, in Hotchkiss v. Greenwood, the Supreme Court recognized that minor changes could not be patented, initiating the doctrine of non-obviousness.^[97]  A change which would be obvious to someone skilled in the relevant art was not patentable.

 

            The first 10,000 patents issued between 1790 and 1836 were destroyed in a fire in December of 1836.  About 2800 were recovered.  After 1836 patents were numbered.  Patent No. 1 was issued on July 13, 1836 to John Ruggles for traction wheels.  The Patent Office re-numbered the old patents – those that were recovered – giving them an X suffix to indicate they were from the old series.  The first patent issued in 1790 became patent No. 1X.  The Act of 1836 required inventors to submit two copies of drawings of the invention.  One copy was retained by the Patent Office, the second was attached to the patent grant when it was sent to the applicant.

 

            The Act of 1836 codified bars to patentability which had been developed by courts during the preceding 40 years.  The bars included: prior invention in the United States by another inventor (lack of priority); prior patenting or description in a printed publication anywhere in the world; and public use or sale with the applicant’s consent.  In 1839 Congress amended the law to provide for a two-year grace period prior to filing the application during which public sale or use would not bar the patent.  The grace period was shortened to one year in 1939.  In 1850, the Supreme Court ruled in favor of an assignee, establishing patents as a property right.^[98]  The assignee was represented by Daniel Webster, who argued on the basis of the common law doctrine of industrial property.

 

            The Act of 1836 created a system for distributing copies of new patents to depository libraries in every state.  As a result, new patents were distributed throughout the country on a regular basis.  One result was an increase in the number of new applications; another was enhanced quality of the applications that were received.^[99]  Amendments to the Patent Act in 1861 required that, to secure damages for infringement, the patented article had to be marked as such or the infringer had to have notice of the patent in some other way.

 

            The patent system led to a burgeoning of patent applications, partly fueled by the Civil War and Reconstruction.  From 765 applications in 1840, by 1867 the number of applications had increased to 21,276.  Many new patents became the foundation for new industries.  They included: Colt’s revolver patents Nos. X9430 and 1,304 (1839); Otis’ elevator patent No. 31,128 (1861); Yale’s lock patent No. 31,278 (1861); Eastman’s camera patent No. 388,850 (1888); Goodyear’s patent for vulcanized rubber No. 3,633 (1844); and Bell’s telephone patent No. 174,465 (1876).  There were 450 patents subsequently issued for improvements on Goodyear’s process; the Bell patent was the subject of 350 patented improvements. 

 

            The Sherman Anti-Trust Act of 1890 raised the question of whether a patent monopoly acted to restrain trade, but courts have proceeded cautiously.  Although there have been celebrated anti-trust cases against innovative enterprises such as John Deere and Co., the American Can Company, and International Harvester, through to more recent cases against IBM, Xerox, Eastman Kodak, Intel, and Microsoft, usually such cases have been unsuccessful, at least as far as the role of patents is concerned.

 

            Many patents were issued in specialized areas, including Gatling’s machine gun patent No. 36,836 (1862) and Nobel’s patent for dynamite, No. 78,317 (1868).  In the United States, other milestone patents include the telegraph (Morse, No. 1,647); beer making (Pasteur, Nos. 135,245 and 141,072); the light bulb (Edison, No. 223,898); an airplane (the Wrights, No. 821,393); the transistor (Bardeen and Brattain, No. 2,524,035); the nuclear reactor (Fermi and Szillard, No. 2,708,656); and the laser (Schawlow and Townes, No. 2,929,922).^[100]

 

            In 1982 the Court of Appeals for the Federal Circuit was created with exclusive jurisdiction to hear appeals from decisions of the Board of Patent Appeals and Interferences, and appeals from final decisions of the district courts in patent cases.  The major reason was a perceived lack of consistency among the Circuit Courts in dealing with patent cases, and to prevent “forum shopping” on the part of litigants.

 

            The consolidated appeals process meant greater certainty for patent holders in how their claims would be interpreted in court.  The result was a surge in patent applications.  In 1983, there were 105,704 applications; by 2003 the number had tripled to 355,418.^[101] 

 

The CAFC proved to be especially friendly to patentees, granting them broad rights against infringers, resulting in a further increase in patent applications and a surge in infringement suits.

 

Japan

 

            Japan signed the international Paris Treaty on patent cooperation in 1883.^[102]  In 1886 the Japanese government sent an emissary to examine patent systems in Europe and the United States.^[103]  By 1888 the first Japanese patent system was enacted.  It copied many of the features of the U.S. system, including examination.  The differences between the Japanese and other systems reflected Japanese priorities.  Patents were not granted to foreigners.  No patents could be obtained for fashion, food products, or medicines.  Patents which were not worked within three years were revoked.  Severe punishments, including prison, were imposed for infringement. 

 

            A new law, passed in 1899, made Japanese patents available to foreigners.  Reforms in 1909 adopted the German “petty” or utility patents covering incremental inventions.  In 1921 protection was removed from chemical products (but not processes), medicines, and food.  The work for hire doctrine and an opposition procedure were adopted.  By paying appropriate compensation, the state could revoke a patent if it was deemed in the public interest.  Historically, examined patents were published and an opposition could be filed before the patent was granted, but after reforms in 1996, an opposition can occur only during the first six months after the patent is granted.