SINGER STARTS THE PATENT WARS
1851 was a watershed year for innovation in so many ways. It was the year of the Great Exhibit in London, perhaps the greatest of all the world’s fairs. Morse, Goodyear, McCormick, and Colt were all in attendance. So was the sewing machine—although missing its biggest proponent, Isaac Singer, who was busy in America starting the nation’s patent wars.
The 1850s proved to be the decade of the most prolific patent litigation—or any litigation—in America’s history. Lincoln himself was involved, as well as his three most prominent cabinet members: Chase, Seward and Stanton. So too was the Secretary of State, Daniel Webster. At the heart of it all was the battle over the sewing machine.
As the effects of the 1837 financial downturn loosened, more inventors began to invent and file patent applications on those inventions. It started with the rubber boom, then extended to munitions, agriculture machinery, new materials, and telecommunications. Industries began to burgeon with the increase in capital investments. A prime example was the manufacture of sewing machines.
Constructing a viable sewing machine had proven to be fascinatingly complex. The race to invent the sewing machine began long before anyone had ever heard of Elias Howe or Isaac Singer. It involved the combination of dozens of ideas thought up over several decades. Perhaps the most vexing problem was how to pull the thread up from the bottom side of the fabric. Early attempts focused on mimicking the motion of a human hand: A needle was pushed completely through the fabric, then forced back through the other side.
To his credit, Howe was the first person to look at the problem from another point of view. Instead of trying to copy the motion of manual stitching, Howe conceived of using an eye-pointed needle in combination with a shuttle (which holds the bobbin), which brought up a second thread from the opposite side of the fabric to create a lockstitch. This eliminated the need for the needle to pass entirely through the cloth. This same technology is still found in today’s sewing machines and was the long-awaited breakthrough that reenergized inventive activity on the sewing machine.
To apply for a patent, Howe created a patent model that many consider to be the finest model ever submitted. Howe’s patent application issued on September 10, 1846. While multiple times faster than sewing by hand (at 250 stitches per minute), Howe’s sewing machine had problems, the foremost being that he used a curved needle that tended to break. Without a robust design, Howe’s initial attempts at commercialization failed, his sewing machines languishing on store shelves. Frustrated, Howe left for England to sell his idea to British tailors. Not surprisingly, the English also shied away from Howe’s machine, finding the design still too crude.
While Howe was overseas peddling his design, the race to perfect the sewing machine in America was off to a brisk start, with everyone building upon Howe’s lockstitch technology. Dozens of inventors feverishly went to work, each making his own incremental improvements. Nearly all these ideas were deemed patent worthy, resulting not only in technologies that would eventually make the sewing machine commercially practical, but in an arsenal of patents. It was the beginning of a patent arms race that would inevitably play itself out in America’s courtrooms.
The sewing machine technology gelled around 1850, with multiple companies having commercially workable designs. But the person who came up with the best design was Isaac Singer, who replaced Howe’s curved needle with a straight one that hung vertically. Singer rose to fame when, using his last dollar, he fixed the floundering Blodgett sewing machine, one of the many designs incorporating Howe’s original lockstitch concept. Singer did this by moving the needle vertically and adding a foot pedal. This allowed the fabric to remain horizontal during stitching. Singer fixed other problems with Howe’s design, like altering the shuttle and varying the tension on the thread. Like Howe, Singer too received a patent, which issued on August 12, 1851. Singer’s machine—the Jenny Lind—was a class above anything else, producing 900 stitches per minute, an estimated 25 times faster than what could be done by hand.
Singer’s sewing machines caught the attention of the garment industry, inviting dozens, if not hundreds, of sewing machine startups into the field. Although Singer’s machine spoke for itself, Singer would later prove to be a marketing genius, rolling out a highly effective national advertising campaign that helped make the Jenny Lind the clear market leader.
Singer also had a tremendous ego. His arrogance in thinking he was above the law, both with his company and with his personal life, landed him in court on numerous occasions. What Singer didn’t understand, or more likely, what he simply chose to ignore, was that Howe had patented the lockstitch, and no court would ever care that Singer also had a patent on a design that cured the deficiencies in Howe’s sewing machine. A basic tenant of patent law is that having your own patent doesn’t get you around an earlier patent. To complicate matters, dozens of others had also improved Howe’s original design and they too had patents on components of the sewing machine. Everyone in the sewing machine industry was infringing somebody else’s patent. Singer probably figured that Howe couldn’t possibly stop them all, and besides, other people were infringing his patent and he wasn’t throwing a fit. What was the big fuss about patents?
The melee that ensued set the pattern for the patent assertions during our own computer/semiconductor revolution. The situation of overlapping patent rights is unavoidable. Every technology needs improvements and along with those improvements come additional patents. This was especially so with the sewing machine, where hundreds of tinkerers were needed to create the final design. The result was that Howe wasn’t the only one holding a patent on the sewing machine technology.
But a blocking patent, like Howe’s patent on the lockstitch, can be used to keep everyone out of the market, unless the patent holder is adequately compensated, usually by paying a royalty. And this was Howe’s strategy—to collect royalties from every sewing machine using his lockstitch design, rather than selling his own sewing machines. Because of Howe’s strategy, new sewing machine companies risked getting sued for patent infringement even if they received an improvement patent on Howe’s original design.
Many believe that these kinds of blocking patents hinder competition. However, if patents aren’t awarded on the main principle, nobody wants to invent. The result is often industry-wide patent litigation.
To Singer, Howe’s original lockstitch patent along with the dozens of other improvement patents awarded to other sewing machine companies were no roadblocks. Perhaps speed bumps at best. Singer, with his fiery temperament, was determined to get his way. Singer attempted to dominate the sewing machine industry, disregarding any legal threats from Howe. After all, Howe wasn’t even selling sewing machines. At best, all Howe had was a piece of paper from the patent office.
Howe came to disdain Singer late in 1850 when Howe, recently returned from England, was strolling down Broadway in New York City. When he reached the storefront window of Smith and Conant’s, an early department store, he saw a demonstration of a lockstitch sewing machine that started his heart racing. For the past year, Howe had been obsessed with the myriad of new sewing machines that were coming onto the market, all using his patented design. While his own venture to make a commercially workable sewing machine had failed, his efforts in obtaining a patent had not. Now backed by a financial speculator, Howe was ready to start “suing the infringers of his patent for royalties.”
Directly in front of him as if to challenge his recently sworn oath to “sue the infringers” was none other than a freshly minted Jenny Lind sewing machine from I.M. Singer & Co. With resolve, Howe tracked down Singer in his machine shop, ready for a confrontation. There he found an immense man with a full beard and waxed moustache that shot skyward like a sprouting bean plant. As Howe would soon discover, Singer’s temper was as fiery as his red hair.
Howe didn’t waste time getting down to business. He demanded that Singer pay him a royalty of $2,000—the wrong thing to ask a man who was not only out of cash, but who had such an unwieldy temperament that he later would flee to Europe after severely beating one of his wives (he had several families on the side) and his daughter. In a rage, Singer threatened to kick Howe down the steps of his machine shop. It would take another year before Howe mustered up enough courage to face Singer again.
By 1851 the sewing machine industry was poised to take off, and Howe knew he had to act or it would be too late. Facing risky and expensive litigation, Howe again approached the brazen man, this time demanding Singer pay him $25,000 to settle their differences. Why Howe thought Singer would pay $25,000 when only a year before he had refused a $2,000 settlement offer is a mystery. Howe should have known that the trip would be a waste. His demands were ignored. The Singer establishment viewed Howe as nothing more than a “perfect humbug,” one that “never invented anything of value.”
Out of patience, Howe exercised his only remaining option. He sued Singer, along with a handful of other sewing machine manufacturers in Boston, and the case came to trial in June 1852. It was the spark that would set off a series of explosions.
Howe’s timing in suing Singer was perfect. Singer was in desperate need for cash to finance the manufacture of the Jenny Lind. Initially sales were slow, mostly because of a skeptical public who had seen previous machines not live up to their claims. When Singer started his venture, he had looked to George Zieber for financial help. Zieber, a publisher who had once financed Singer in developing an alternative printer’s type, agreed to provide modest financing for a fifty percent interest in Singer’s patent. With Howe’s lawsuit, however, Singer needed more money than Zieber could provide.
But nothing was beneath Singer. Ignoring Zieber’s share in his patent, Singer took on another partner, his patent attorney Edward Clark. Singer offered Clark Zieber’s fifty percent interest in exchange for free legal services. Then, Singer went looking for a way to swindle Zieber out of the share that he’d just given to Clark. The opportunity came only a few months later when Zieber was seriously ill. Singer approached his bed and broke the bad news to Zieber—that Zieber was dying of an incurable disease. It was a flat-out lie, but it was all Singer needed to convince Zieber to sell his interest for a mere $6,000.
Howe’s first sewing machine trial began in June 1852 in the Circuit Court of Massachusetts. It lasted three weeks. What Singer and the rest of the sewing machine industry underestimated was the strength of Howe’s patent. As Singer would later be forced to acknowledge, Howe really was the first one to invent the lockstitch. Because every sewing machine used this technology, infringement was almost a forgone conclusion. By July 12, 1852, Howe had obtained preliminary injunctions against the accused infringers. That was enough for most of the manufacturers to fall in line, paying Howe an exorbitant royalty of $25 per machine.
But Singer was another matter. He refused to bow to Howe. The battle between them moved from the courtroom to the editorial pages of the New York Daily Tribune. On July 29,1853 Howe wrote a warning:
The Sewing Machine—It has been recently decided by the United States Court that Elias Howe, Jr., of No. 305 Broadway, was the originator of the Sewing Machines now extensively used. Call at his office and see … a certified copy, from the records of the United States Court, of the injunction against Singer’s machine…. You that want sewing machines, be cautious how you purchase them of others than him or those licensed under him, else the law will compel you to pay twice over.
On the same page, Singer presented his own case. “For the last two years Elias Howe, Jr., of Massachusetts, has been threatening suits and injunctions against all the world who make, use or sell Sewing Machines.” Singer then claimed that he was selling his machines rapidly and that the “public do not acknowledge Mr. Howe’s pretensions, and for the best reasons.” He discounted Howe’s machines, saying that they didn’t work and that Howe wasn’t the original inventor. If they wanted the best “Sewing Machine,” they needed to come to Singer.
This prompted a charge of libel from Howe, who sued the New York Daily Tribune. In turn, Scientific America immediately condemned Howe’s rhetoric, as did a host of other papers.
Singer, who often struggled to maintain self-control, was now livid. As Singer told a friend, he would have killed Howe given the opportunity by squashing his neck with his foot. And Howe wasn’t the only beneficiary of Singer’s wrath. Those who signed up for licenses from Howe immediately became Singer’s enemies—robbers and damn scoundrels, as he referred to them.
Singer knew that he was running out of options. Both the sewing machine industry and the courts took the position that Singer’s Jenny Lind sewing machine infringed Howe’s patent. He desperately needed another strategy, but Singer was never without a scheme. There would be more battles between Singer and that “robber.”
Singer still refused to pay homage to Howe. With all of his energy focused on fighting Howe, his company suffered, but that only served to intensify his resolve. The war was raging on every front—the press, the courts, and now with Singer’s next strategy, it would return to the patent office. Because everyone knew that Singer infringed Howe’s patent, Singer needed another approach to free himself from Howe’s threats.
In late 1853, Singer had his plan. He would show that Howe didn’t really invent the sewing machine. If he could do this, all his troubles would go away. Without delay he scoured the world for prior art, hoping to find evidence of an obscure sewing machine that would invalidate Howe’s patent. Singer searched everywhere, including European patent offices. He even conducted an investigation into whether a machine had been built in China. When those leads failed, Singer resorted to more shrewd tactics by concocting one final scheme to invalidate Howe’s patent.
From his searches, Singer found a man named Walter Hunt, a prolific inventor with twenty patents to his name. In 1834 Hunt had supposedly built a sewing machine with an eye-point needle and shuttle. Singer’s plan was for Hunt to file a patent application with the patent office—a full eighteen years after Hunt allegedly built his sewing machine—then claim Hunt should be awarded Howe’s patent. If all went according to plan, the patent office would award Hunt the patent on the lockstitch, rather than Howe. This was based on a development in U.S. patent law that awarded a patent to the first person to invent the idea, not the first person to file his patent application. Fabricating evidence of earlier designs was not unusual. This same tactic was also used against both Goodyear and Colt when they tried to enforce their patents.
In 1853, Singer carried out his plan, paying Hunt—along with a team of re-constructionists—to reassemble an eighteen-year-old pile of rusty parts into some semblance of a sewing machine. Then, in the fall of 1853, he paid for Hunt to file a patent application and ask the patent office to have Hunt declared the original inventor of the sewing machine. Taking matters to the extreme, Singer also funded an advertisement in the New York Tribune where Hunt declared himself—not Howe—as the original inventor of the sewing machine. Hunt continued by bragging that he was pursuing his claim with the patent office.
These “rusty claims” provoked the ire of the Scientific American, who denounced the unscrupulous tactics. While the patent office was reviewing the matter, Howe persevered in the courts, promptly suing several Singer retailers in Massachusetts Circuit Court for an injunction. The suit against the retailers was filed in February of 1854 and would be decided by August of the same year. As summarized by the court:
This was an application for a provisional injunction to restrain the defendants from infringing the letters patent [No. 4,750] granted to Elias Howe, Jr., September 10, 1846, for an improved sewing machine, by the use and sale of the Singer machine, so called. The defendants denied the novelty of the invention of Howe, and relied, in support of their denial, mainly upon an alleged invention of Walter Hunt, in 1834.
Because Singer’s infringement was a foregone conclusion, his only chance of succeeding was to show that Howe’s patent wasn’t valid—using the reconstructed model of Walter Hunt. The outcome would depend almost entirely on whether Singer could prove that Howe wasn’t the first to invent the sewing machine. Not only did Singer latch onto the remains of Walter Hunt’s old machine, but Singer also presented a new replica of Hunt’s 1834 machine.
The court didn’t take kindly to Singer’s charade. “The first inventor [Hunt] gave nothing to the public. His so-called invention was only an idea, never carried out in a machine that could anticipate one subsequently invented.”
Having dismissed Singer’s invalidity arguments, the judge quickly wrapped up the case. “The other question, as to the infringement, remains. … The weight of testimony … is strongly preponderating in favor of the plaintiffs…. The result is, that the plaintiff’s patent is valid, and the defendants’ machine is an infringement. An injunction is granted.”
This was the end of the line for Singer, especially after the patent office in February 1855, after hundreds of pages of dubious testimony, also concluded that Hunt’s claims were “rusty” and declared that the sewing machine patent rightfully belonged to Howe. Singer reluctantly capitulated and paid Howe $15,000 plus a royalty of $25 per machine like everyone else. Although the royalty was significant, Singer could still pay that amount and stay in business, especially if everyone else had to pay the same royalty. In a rather surprising move, together the two men took out an ad in Scientific American warning that if any remaining sewing machine makers didn’t take a license, they too would be sued for infringement.
But with hundreds of improvement patents on the sewing machine, this threat only highlighted the looming infringement problems facing the sewing machine industry. By 1867 there were around 900 patents on the sewing machine. The sewing machine industry wasn’t alone in seeing a boom of patents. The same would happen with the reaper.
Almost overnight dozens of new suits were filed across the country. The litigation was so fierce and widespread that the press came to the conclusion that the sewing machine companies would sue themselves out of existence. Singer, still paying royalties to Howe, again found himself a target, being named in at least twenty suits filed in four different courts scattered along the East coast. Not wanting to miss out, Singer also sued on his own patent, taking on Grover & Baker and Wheeler, Wilson & Co. in Philadelphia. Even Howe found himself named in some of the suits.
Like today, the number of documents required to be produced took the attention of these companies, leaving them little time to peddle their wares. Tens of thousands of pages of testimony resulted from all the trials. Though a pittance compared to today, it was still time-consuming when it all had to be recorded on a typewriter.
The end result was that the lawsuits crippled the market to the extent it almost didn’t exist. Howe was collecting only a few hundreds dollars a year on his patent. Although there were certainly other reasons for the slow sales, including the need to break social norms where women were discouraged from working with machines, the all-out patent wars were mostly to blame.
It was like the arms race between the Soviet Union and the United States, but this time, somebody had pulled the trigger. Unless the whole industry came to its senses, it would cease to exist. For some, this all foretold the failure of the patent system.
Then, Orlando B. Potter, president and legal counsel of one of the defendants, Grover & Baker, came up with an idea to use the market economy to fix the problem. Because Henry Ellsworth had done his job in creating a patent office that generated valid patents, these legal instruments were valuable assets, with a calculable market value. In other words, since the patents were enforceable, they could also be bartered, just like any other asset.
Potter’s idea was to pool the patents, with everyone in the pool chipping in a license fee. The basic idea was for each person in the pool (referred to as a “combination”) to grant a license to everyone else in the pool. In addition, the members had to pay a royalty on each sewing machine sold. This money was divided according to who owned the most valuable patents—with the “core” patents being owned by Howe, Singer, Wheeler, Wilson & Co., and Grover & Baker. The collected royalties were paid out to Howe and the “core” patent holders, with the remaining funds being used to cover the costs of administration as well as to enforce the patents against infringers who did not join the combination.
At first, Howe resisted because he had the most to lose. He eventually gave in, especially after being offered $5 for each machine sold in the U.S. and $1 abroad. The provision that convinced Howe to join the combination was when Potter guaranteed the combination would have at least twenty-four licensees, essentially guaranteeing Howe a healthy revenue stream.
With that, the Great Sewing Machine Combination was formed, and members paid $15 for each machine sold. While each member received a license to all the patents in the pool, they were free to charge their customers any price. Howe did receive his $5 per machine sold, although in 1860 this was reduced to $1 per machine sold when the membership price charged by the Combination was reduced from $15 to $7. Although Singer grumbled over the deal—as he always did when he had to give up his money—the $15 was barely noticeable as Singer sold his machines for $125, while the cost to make a machine was only $23.
The resulting royalty arrangement made Howe a millionaire. In 1860 his profits had reached $444,000. Then Congress granted him a seven-year patent extension based on Howe’s petition claiming that he was not justly compensated for his patent during the original fourteen year term, allowing him to collect two million dollars by the time his patent expired—all without his ever successfully producing a sewing machine.
But the beauty of the Combination was that it almost overnight settled all the disputes, allowing the sewing machine industry to explode. And, it put faith back in the patent system. Americans understood that they could protect their ideas, and if there were conflicting patents, solutions could be fashioned to make everybody a winner.
Still, in starting his patent battles, Howe taught a generation of inventors how to sue. We have never looked back. With no commercially acceptable product, Howe was paving the way for today’s non-practicing entities (NPEs) or “patent trolls”: inventors who have no viable product yet secure valuable patent rights used to block others from coming into the market.