THE U.S. GETS HER FIRST PATENT OFFICE
America’s first patent office … wasn’t really a patent office. It was more like Thomas Jefferson’s drawing room.
Whenever a knock came, Jefferson, prone to migraines, must have grumbled and rubbed his temples at the thought of yet another unannounced visitor to his lodgings in Philadelphia, hoping that it wasn’t a runner with more patent files.
This thriving merchant city offered little to Jefferson, a man of the earth. He was in Philadelphia, the temporary home of the new federal government, mostly out of a sense of duty. In 1792 Jefferson was well into his term as Secretary of State, fighting with Alexander Hamilton over national fiscal policy and carefully following the disputes between England and France.
Jefferson must have reluctantly taken the files, a stack of patent applications and a few patent models. Moonlighting. It was Jefferson’s second job—as if being Secretary of State and fighting with the likes of Hamilton wasn’t enough. He added them to the pile, not sure when they again would get his attention.
A year before, it was another story. His enthusiasm for promoting innovation was one of his top priorities. Examining patent applications was not intended to be a mere respite from his foreign affairs. No, if anything, granting patents was even more worthy of his attention than debating over whether the United States should have a national bank. And Jefferson wasn’t alone. For the Founding Fathers, protecting inventions was so important that the first patent act placed full responsibility for granting patents squarely on three men, all members of Washington’s cabinet. The country’s first Patent Board consisted of the Secretary of State, Thomas Jefferson, the Secretary of War, General Henry Knox, and the Attorney General, Edmund Randolph. Granting so much power to one individual by virtue of a patent grant was thought to have been worthy of nothing less.
That is, until reality struck.
It took less than a year before the members of the “Commissioners for the Promotion of the Useful Arts”—known as the Patent Board—realized they had a problem. Cabinet members don’t have time to moonlight.
Initially, the Patent Board met on the last Saturday of each month in the State Department office on Market and 7th. Together, they would read each application and stew over the merits of the invention. Even with all their zeal and enthusiasm, they immediately became bogged down trying to sort out when an invention was “new and useful,” as the statute required. It wasn’t as if they could simply pull a patent treatise off the shelf to guide them. This was new territory. Eventually, they came to the conclusion that they would not grant a patent if the idea was “a mere change in materials or in form.” Obviously, this vague standard was not much clearer.
Their broodings led only to indecisions, and the piles of unexamined applications began to accumulate. The drudgery of giving up a Saturday evening reading through patent specifications became too much, even for Jefferson. The meetings began to slip. Undaunted, the Patent Board concocted a new plan. Instead of wasting one weekend a month, they would review the applications whenever they could fit them into their busy schedules. In July 1791 Jefferson wrote to Knox confirming their agreement to have runners bring the patent files to their homes. The plan was for each member to review an application, make some notes, then forward the file to the other two members of the Board. But every month, the stacks seemed to get higher, the issues more involved, and their time more limited.
The new “leisure” plan didn’t last long before Jefferson was again ready to rid himself of the patent business. And the reason was more than just overtaxed schedules. Jefferson had learned what every patent attorney and every patent examiner learns the hard way.
Patents are boring.
It’s one thing to sit around the fire, enjoying some tobacco while discussing wild new inventions. It’s quite another to slug through pages of dry text. “The said axel is welded to the said frame.” It’s enough to put anyone to sleep. And as soon as Jefferson grasped that, he wanted out—no more patent applications. Though he never admitted it, examining patent applications was now nothing more than a chore, pure drudgery.
But wasn’t it Jefferson who thought patents were so important that they couldn’t be relegated to anyone else? Just two years before, the entire Congress was exuberant over America’s new patent system. Welcome to the world of patents. Nobody wants to deal with them. Few people can understand them, yet we all somehow know that they play a significant role in the nation’s destiny.
Whatever Jefferson was thinking (or wasn’t thinking) his frustration with patents would lead to a decision that would prove to be a disaster—one that would not only put Eli Whitney in despair but would send innovation reeling for nearly half a century.
Although the overwhelming support for the U.S. patent system is well documented, its doctrinal underpinnings are not. The Constitutional Convention was nearly finished before anyone ever mentioned patents. It wasn’t until August 18, 1787 that James Madison submitted a request to grant Congress the power to protect discoveries. Madison didn’t propose how that would happen, just that “discoveries” should be protected. The same day Charles Pinckney of South Carolina put some more meat on the bones. He said that the government should grant patents that gave exclusive rights for a limited time. The final language emerging from a committee on September 5, 1787, included language from both Madison and Pinckney and was adopted into the Constitution without comment. It may be the only language in the Constitution that was passed without any debate. Madison’s view in one of the Federalist Papers seems to have captured everyone’s sentiment: “The utility of this power will scarcely be questioned.” Madison further argued that patents were so well founded that they were essentially a right at common law. Nobody disagreed. That patent rights ended up in the Constitution almost as an afterthought proves the point.
It also could have had something to do with the latest toy of the day—the steamship. A boat with no oars and no sails that could plow its way right up a roaring river. No, that was impossible. Or was it?
On August 22, 1787, just four days after Madison suggested that a patent provision be inserted into the Constitution, John Fitch invited some of the delegates to a demonstration. Fitch was going to take these overworked men for their first steamship ride up the Delaware River. When word got out, the entire convention adjourned. It was an event not to be missed.
And when the joyride was finished, nobody doubted that Fitch should be rewarded for such a grand invention. If any member of the Constitutional Committee had doubts about whether to include a patent system in the Constitution, those doubts were now put to rest.
Although U.S. inventors were promised protection by the Constitution, none of that mattered until Congress worked out the details of a patent act. Article I, paragraph 8, section 8 simply gave Congress the right to grant patents.
Initially, Congress didn’t act. Perhaps it was because nobody in Congress knew what to put in the first patent act. It was an easy sell to reward an inventor for his discovery. It was quite another matter to hammer out the logistics of how it would all happen. And that debate still remains.
What is an invention?
What does the patent cover?
How long is the patent good for?
Who makes all these decisions, anyway?
The first Congress stalled for three years, until George Washington finally prompted them to action. In his State of the Union message on January 8, 1790 he asked them get to work—Congress needed to encourage “exertions of skill and genius in producing [inventions].” At the end of January, Congress did just that and put the task to a House committee. The emerging bill was first adopted by the House, then amended by the Senate. By March, the House and Senate hammered out a compromised bill, and on April 10, 1790, the final version was approved and signed into law by Washington—before the country even had thirteen states. The bill had only seven sections and the entire statute filled two sheets of paper.
Little is known about how the House came up with its original proposal. There weren’t many models to follow. The most likely would be from the British because they also granted patents, but their patent system mimicked their social climate. Getting a British patent in 1790 required more than $50,000 in today’s currency. Only Britain’s elite ever applied. Outrageous? To early Americans—yes. Today, it happens all the time.
Why so expensive? British officials were so worried about patent quality that the application went through multiple offices, each with its own forms—and its own bribes. It essentially shut down the middle and lower class inventor, who therefore didn’t invent. And that’s when Britain’s brain drain began. Those with a good idea and no money flocked to America to pursue their dreams.
We should learn from the British. Today, we too have a multi-step, multi-year process used to insure “quality.” And it costs almost the same. In reality, America has backslid 300 years to where the British found themselves in 1790.
It’s likely that the drafters of America’s first patent act shunned the British model in favor of the earliest recorded patent statute—the Venetian patent decree of 1474. Those were the glory days of Venice, and the city fathers were eager to protect the prominence of their city and its guilds. Inventive minds from all over Europe were flocking to Northern Italy and discovering “ingenious devices.” The Council concluded that if there was a way to protect these inventions, keeping others from stealing away an inventor’s honor, that these men would continue to “exercise their genius” and continue inventing, all to the benefit of the commonwealth.
The Venetian patent decree gave the Council authority to grant rights to anyone who came up with a “novel and ingenious” device that was reduced to perfection—enough so that others could use it. The right granted was the ability to prevent others from making devices that imitated and resembled the invention for a period of ten years. If unauthorized copying occurred, the infringer would be required to pay one hundred ducats, and the infringing device would be destroyed.
The beauty of the Venetian decree is its simplicity. The entire document was written on a single page. Its sheer simplicity makes it a highly desirable model. The salient provisions include:
1. A requirement that the inventor build the idea to a perfected state.
2. The idea had to be new.
3. Infringement was determined based on whether others imitated the idea.
4. The term was ten years.
5. Damages were fixed.
6. Injunctions to stop the manufacture or sale of any infringing products issued as a matter of course.
In terms of sheer artistic genius, the Italian Renaissance was arguably the most creative period in the world’s history. On the technological side, its match is only found during America’s own Industrial Revolution, from about 1830 to 1900.
We don’t know for sure whether the drafters of the first United States patent act had a copy of the Venetian decree. If they didn’t, it would be surprising. With a few small exceptions, the first U.S. patent laws were nearly identical to those found in the Venetian decree.
The Patent Act of 1790 awarded a patent as long as the idea had not been known or used, and if it was useful. In other words, patents were to be granted based on the standard of novelty, meaning the same thing had not yet been invented. Each application was to be considered by the Secretary of State, the Secretary of War, and the Attorney General to see whether it conformed with the novelty provisions of the statute. The application was to include a description of the idea and include a physical patent model, both to show that the invention had been made and that it actually worked as explained in the description. The model was also required so that others could more easily integrate the technology after the patent expired. Logistically, the bill required the President to sign the patent, then return it to the Secretary of State for his signature and to place the Great Seal of the United States. Once granted, the patent was in force for fourteen years.
If the invention was copied, an infringement action could be brought in district court. As a defense to infringement, the defendant could plead that the patent was fraudulently obtained. If the patent holder won his case, the jury was to “sess” damages and the infringing device would be forfeited.
And how much would all this cost? A basic application started off at fifty cents plus copying costs. All told, the cost to obtain a patent averaged about $4 to $5, plus attorney’s fees. For example, John Fitch’s steamboat patent cost him $4.39, James Rumsey obtained six steam ship patents for $32.18, and Samuel Milliken paid $16.07 for four patents. Taking inflation into account, the government fees were about one fourth of what an inventor can expect today.
If the underpinnings of the Patent Act of 1790 were so well grounded, then why was it overhauled three years later?
Ask Thomas Jefferson.
Not only was Jefferson disillusioned with examining patent applications, he was now facing a myriad of issues he was ill prepared to handle. Jefferson’s frustration with the patent system reached its climax with the steamship problem. Before the adoption of the U.S. Constitution, to obtain a patent an inventor could only petition state legislatures or Congress under the Articles of Confederation. But, after the Patent Act of 1790, the floodgates opened and many inventors who were previously unable to obtain patents now formally sought them. The biggest group of these inventors was developing the steam ship, including John Fitch, James Rumsey, Nathan Read, Isaac Biggs, and Robert Stevens. And, if anyone had the advantage, it was Fitch—the man who had chauffeured the Constitutional Committee up the Delaware. But, without a doubt, there was more than one inventor.
With no clear guidelines on which of them should get the patent, each presented arguments as to why he was entitled to the patent. One argued that the patent should be awarded to the first patent application filed with the Patent Board, another to the first petition filed to a state legislature or the previous Congress, another to the first to invent. Jefferson didn’t want to sort through the details, and he wasn’t inclined to award the patent solely to Fitch, even if Fitch helped to inspire the inclusion of the patent clause in the Constitution. Instead, the Board punted the issue and awarded them all a patent. But giving everyone the patent had the effect of giving no one the patent. Without an exclusive right, investors gave up interest and the technology languished. It wasn’t until 1805, after these patents had expired, that Robert Fulton rallied the investors needed to bring the steamboat business back to life. If the patent statute had clearly delineated priority issues so that a single inventor was awarded the patent, commercial steam ships could have been running much sooner, particularly when investors had confidence that their investments would be protected by a patent.
Meanwhile, the number of patent applications only grew…and fast. After the first two years, a total of forty-seven had been granted on ideas like Samuel Hopkins’ process for making potash, Joseph Sampson’s method for making candles, and Oliver Evan’s flour-milling machinery. On the heels of these inventions were Charles Peale’s bridge and fireplace, Eli Terry’s clock, and Peter Lorrilard’s tobacco cutting machine. But there were also 114 more applications sitting in the queue. So, at the end of 1791, Jefferson began working on a new bill, one that would take him out of the loop and speed up the process. Later in life, Jefferson tried to justify his actions, writing that the Board members did not feel that they had adequate time to fairly review each application. But Jefferson’s idea would more than just remove him from the picture.
It removed everyone.
Jefferson’s new patent bill proposed to entirely eliminate examination of patent applications. Instead, it would revert to a simple registration system. File an application, get it rubber-stamped by some clerk, and you’ve got your patent.
Congress never considered the bill, but Jefferson still got his way. The provision to eliminate examination was passed in 1793, and it also abolished the Patent Board. Jefferson’s days as a patent examiner were over. While Jefferson came up with plenty of his own inventions, on ideas like an improved plow, a hemp brake, and a macaroni maker, he never patented any of them. No U.S. president would patent an idea until Abraham Lincoln in 1849 patented a device to lift boats over shoals.
Under the 1793 act, to get a patent, an inventor simply had to lodge a patent application with the requisite formalities and it was registered. Validity and enforcement were left to the courts. For $30—a significant sum in 1793—anyone could get a patent by depositing a model and the right paperwork with the patent office. From examination by the country’s highest government officials to no examination at all, the U.S. patent system took an about-face.
Recognizing the problems that cropped up when multiple people claimed to have invented the steamboat, provisions were also added for applications that “interfered” with each other, meaning they all claimed the same idea. For these, a board would determine who invented the idea first, not who filed first. It was based on the concept of fundamental “fairness,” a doctrine that would later handcuff nearly every aspect of the patent system.
But if Americans now had the belief that they would get a patent in a single day that everyone would respect, they were mistaken. If anything, just the opposite happened. Even with no examination, it often took months to get a patent, mostly because applicants couldn’t meet all the formalities, including having President Washington sign it.
Why Jefferson proposed to eliminate examination altogether is a mystery. Why not just relegate the duty to another government official? Why not simply create a patent office? Had the importance of patents fallen that far in Jefferson’s eyes in just three years? When this venture began, Jefferson was such a proponent of patents that he refused to delegate their examination to anyone but top government officials. Granting this powerful property right was so important to promoting innovation that he wanted to make sure that his hand was in every patent grant. So why the about-face?
Yes, Jefferson claimed that he was so overwhelmed with his duties as Secretary of State that he didn’t have time to deal with the mundane patent matters. But was that the real reason? That seems inconsistent with Jefferson’s character, simply to give up on an idea because he was bored with it.
Perhaps Jefferson really did know what he was doing when he abolished examination. It’s reasonable to conclude that Jefferson understood the limitations of the new government. The country was struggling to survive. He wasn’t going to be able to petition Congress for a fully staffed patent office. And even if he could, how was he going to train them? There was no legal precedent to follow, and a patent clerk was not the person to be deciding such important policies. The next best choice was for the judiciary to start vetting the issues.
Jefferson may have also realized that this was like the slavery issue, where the Founders had a gentlemen’s agreement to table the discussion for a whole generation. Not that patents were controversial like the issue of slavery, but Jefferson still may have felt that the issue wasn’t ripe enough to discuss comprehensively. Perhaps he hoped that granting everybody a patent would, over time, reveal issues that could be addressed in a future patent act. If that’s what Jefferson intended, it certainly happened. It would take another forty-six years for Congress to finally figure it out. But figure it out they did. The 1836 act was a godsend for inventors.
But the price of this decision would prove to be enormous. And the person who would pay for most of it was Eli Whitney. Jefferson’s riddance of examination would affect Whitney the rest of his life—not so much when he reached Philadelphia in June 1793 to lodge his patent application, but absolutely when he tried to stop the hundreds of infringers. Not even Ms. Greene or Phineas Miller could have prepared him for what lay ahead. In his naivety, Whitney could not have possibly understood how Jefferson’s decision would nearly ruin his chances of profiting from his cotton gin.
With no formal examination, Southern courts felt little duty to uphold Whitney’s patent. And, with one exception, they never did.