Patent Laws in O u r Social Scheme NELSON LITTELL 22 East 40th St., New York, Ν. Ύ.
R
ECENT criticisms of the use of patents seem t o indicate that speaking on patent laws in our social scheme is an attempt t o justify something in herently evil. Critics of the patent sys tem have been loud in their condemnation of alleged specific abuses without present ing to the public a fundamental view, or even a true picture, of the value of the patent laws t o the progress of mankind. They have turned from fundamentals and taken a few isolated spots from which to portray an alleged evil of the system as α whole. Today we are fighting to preserve democ racy and our American way of life and, if we permit reformers and publicity seek ers to blind us t o fundamentals, we will have lost rather than preserved that for which we are fighting. This does not mean that a patent holder is justified in any way in delaying our war effort. I t does mean that he is as justified in insisting that his patent rights be recognized after the war is over as the man or corporation who ha*> a plant or any other property devoted to war work is justified and correct in insisting thai, when the war is over, he is entitled to use his plant to produce goods for profit in a normal peacetime economy under the capitalistic system. To gain appreciation of the fundamental position of patent laws in our social scheme, let us review briefly the effect of the recognition of property rights on t h e progress of mankind. Imagine a wholly unorganized society in which the indi vidual's right of possession is recognized only in that individual's ability to protect and defend his possessions. In such a state of society—a state bordering on savagery—even the hardiest individual could accumulate and defend only a very limited amount of property. Whether we visualize him as accumulating and hoard ing coconuts or sugar, as soon as his hoard becomes known the other members of the tribe turn on him. H e is compelled to divy up, either by actual force or threat of force, and you have Communism or Socialism, or even state control if that name is pref erable, but there is no progress toward the more abundant life for anybody. Only after society as a group unit began to recognize and itself protect the right of an individual in certain property was any perceptible progress made from savagery. Probably the first form of property right recognized by society, as existing in 1 Address delivered before the Western Con necticut Section of the AMERICAN CHEMICAL SOCIETY, March 30, 1942.
V O L U M E
2 0,
NO.
8
*
»
»
the individual, was man's property right in his wife and children—his right to be protected by society in these possessions. That form of property right has under gone many transitions and it is doubtful if any man today would dare assert a property right in his wife, but we d o still recognize in law the right of the man to compensation for the loss of the life of a wife or child or t o compensation for serv ices or loss of services of a wife or child in any injury case. That form of property right, except for its stabilizing effect on society and its incentive given man in other fields, has not been a direct con tribution to the scientific progress of civilization. Indirectly its influence is incalculable. T h e recognition by society of the indi vidual's right of property in personal pos sessions acquired and improved upon by him and in real or land property marked the beginning of a path of progress which has been unending in the march of civilization. The individual brings forth nothing new from within himself in settling upon, improving, and cultivating a piece of land, which was already there for anybody t o acquire. Nevertheless, when civilization began to recognize in the individual a property right, in real or personal prop erty, which society itself would protect, it gave the individual the incentive and reward to cultivate, develop, and improve that property. H e could plant, cultivate, and store crops with the assurance that, as long as he complied with the laws of the existing society, the crops would be his t o tide him and his family through the winter season or over the rainy day. He could construct buildings for shelter and for storage, rude as they might be, with some assurance that society within its strength and ability would protect him in the possession of his acquisitions and in his improvement thereof. This begin ning of the incentive to improve, one of t h e most important incentives in the progress of man, is laid squarely on the recognition by society of a property right in the in dividual. The greater these improve ments, the greater the ultimate progress of t h e society. Under this system over long years man made a slow and painful progress, some times with long periods of retrogression and with the vicissitudes of war between tribes or larger units of society playing their part in making life and possessions a t all times uncertain. Society, however, in all of its successful forms was always dependent for ultimate progress o n t h e recognition in the individual of certain APRIL
2 5,
1942
forms of property rights which gave the individual the incentive to improve and develop the property society recognized as his. Throughout the period of recorded history to the past 300 years, in the Egyptian, Greek, and Roman civiliza tions, and through the Middle Ages, man made some progress improving upon what he acquired from his society in the form of real or personal property and many times adding to it from his own ingenuity, but without any recognition by society that a man could have a property right in his original ideas or in his inventive improve ments on existing things. Then came the Statute of Monopolies passed in England in 1623 during the reign of James I. This was the first statutory recognition that society might and should recognize and protect a man in the de velopment of his original ideas. This statute was forced through Parliament t o curb the practice of the Crown of granting monopolies to court favorites on every day commodities of life, such as salt, spices, playing cards, and the like. It prohibited the granting of all monopolies, except those for new inventions and new importations into the Realm. From the negative beginning of this statute, the patent laws of the entire world have sprung. This statute and patent laws of the various countries have been interpreted as preventing monopolies on things which were already known in the society, but as authorizing the grant by t h e society of legal monopolies for a limited number of years on those inventions, discoveries, and improvements which spring from within the individual, add t o the sum of knowledge, and give new utilities to so ciety. As long as the usual type of real and personal property rights only were recog nized by society, man's incentive to im prove was limited by what it was prudent t o put into a new building, a new ship, or a new tool. H e could not afford to spend hours and years improving existing structures, or thinking out new ideas for later development and improvement. H e could not even afford to improve upon such machines as were then known be cause under the existing rules of society he had no protection on these new ideas or improvements. Anyone could copy and use them as soon as they were developed and became known. Much less could he afford to hire, house,· and correlate the work of numerous researchers to discover and develop new things. Consequently, 533
during t h e early centuries of civilization a n d through t h e Middle Ages, m e n who developed or originated new processes practiced t h e m in secret as much as possible, and m a n y secrets died with t h e individual a n d were either temporarily or permanently lost to society. I t took a b o u t 100 years for the effect, or rather t h e impact, of t h e philosophy behind t h e p a t e n t laws to make itself felt on the progress of society. By 1725 t h e more intelligent individuals began to know t h a t they would be protected in their inventions, discoveries, and improvements, a n d by t h e beginning of t h e 19th century, spread by folklore and t h e facts of a few outstanding inventions, every individual knew t h a t his fortune might be made if he could bring forth an invention which would contribute to t h e progress of mankind. E v e r y individual became a potential inventor and improver b y virt u e of the incentive held out by t h e p a t e n t laws. T h e progress of mankind toward t h e more a b u n d a n t and more enjoyable life since t h a t t i m e has been astounding. Lying a t t h e root of ail this progress was a simple a n d n o t too well understood act of society in recognizing a new t y p e of property right in the individual—the right t o be protected for a limited period of years in t h e exclusive enjoyment of his original ideas, when developed a n d improved into things useful to mankind. Under this new form of property right, recognized by society, man could afford t o work upon a n d develop his embryonic ideas into useful things and be protected in the enjoyment of the fruits of his improvements—the same as under t h e older forms of recognized property rights h e could improve his buildings or his plot of ground, and know t h a t t h e improvements were his. T h e d a t e s of some of t h e more outstanding inventions under t h e p a t e n t laws a r e : steam engine, 1765; coal gas for lighting, 1790; steamboat, 1793; screw propeller, 1804; phosphorus match, 1831; telegraph, 1832; vulcanized rubber, 1839; rotary printing press, 1846; motion picture machine, 1861; telephone, 1875; a n d talking machine, 1877. T h e electric light, radio, talking pictures, automobile, airplane, automatic refrigerator, and numerous other inventions vital t o today's society h a v e been produced since 1875. I n t h a t s p a n of less than 70 years, within t h e memory of men still living, a miracle of progress h a s unfolded. Almost all of the things which make our life easier, working day shorter, and home life and leisure more enjoyable have come to us in the past 100 years. When we compare t h e progress of this past 100 years with t h e progress of the 4,000 years preceding it and the comforts of today's existence with those of 100 years ago, we realize t h a t society made a tremendous forward s p u r t during this past century. Few of u s pause to consider t h a t it is the 534
patent system—the recognition of a new form of property right by society—which is the fountain from which all these improvements spring. Underlying all these inventions is t h e new incentive afforded by the patent laws to develop new things and improve upon them. There is no reason for us to believe that the past 100 years h a v e produced a race of superior intelligence or superior attainments. The men who built the horse used in the siege of Troy, the workmanship on the Roman galleys, t h e superiority of Damascus steel a n d Venetian glass, and various other things from antiquity indicate t h a t workmen in those d a y s were as able, capable, and skilled as workmen of today. T h e y were, however, offered by their society no incentive to improve upon existing conditions and n o way in which they could profit from original ideas and discoveries except through the secret process. There was no possibility of reward for bringing forth something new or improving upon something old. When society a t last recognized the desirability of offering some reward or incentive for bringing forth new ideas and for improving upon old ones, the rate of progress m a d e by civilization has been astounding. Prior t o 200 years ago, the world h a d made relatively little scientific progress in i t s m a n y centuries of development. Since t h a t date we have literally revolutionized t h e life p a t t e r n of civilized m a n . Not all this progress was by outstanding leaps and bounds. Just as t h e recognition of property rights in real and personal property enabled t h e individual to improve his property with safety, t h e recognition of a p r o p e r t y right in ideas and inventions m a d e it possible for m a n to make improvements on existing inventions, and to risk his t i m e a n d capital in so doing, with the reasonable expectation t h a t t h e improvements would inure to his benefit. Within o u r memory t h e telephone has been greatly improved. From what was originally regarded as a gadget or a toy, it has become a necessity for modern business and a comfort in home life. Its span of distance h a s been increased from a few yards t o t h e distance around t h e earth. Improvement of the radio since the days of crystal s e t s and earphones has step by step brought it t o the point where almost instantly a n d clearly t h e happenings in the m o s t remote part of the world can be heard. I m p r o v e m e n t s in the automobile within the p a s t 25 years are familiar history. T h e airplane has been developed from a rickety flying crate into luxurious ocean t r a n s p o r t s a n d formidable fighting weapons, and t h e end of these improvements is n o t in sight. The improvements are a s important and useful as the original inventions and sometimes more immediately valuable. With all this progress attributable in a very large measure to t h e p a t e n t system,
C H E M I C AL
critics of t h e system would have us believe that i t has outlived its usefulness and t h a t improvements would continue to be forthcoming without the incentive of return offered by t h e system. Would we improve o u r homes or factories if our neighbors o r the community could come over and take t h e improvement from us the m o m e n t it was completed? N o more would we or our employers spend time and money to improve existing drugs, machines, products, or processes or to develop a n d produce new products, if those new things could be t a k e n away t h e moment t h e y a r e completed. We are not now talking of control a n d regulation of production during wartime, b u t of what may happen to one of our important property rights in peacetime if we permit these misconceptions a n d false premises t o spread. T h i s philosophy t h a t t h e p a t e n t laws have outlived their usefulness and t h a t patents should n o t be sustained or, if sustained, should be confined t o outstanding inventions has pervaded t h e news in recent years. I t has been inculcated into the outlook of our courts t o such an extent that, without change of our p a t e n t statutes, the p a t e n t system is being shorn of t h e attribute most useful t o society— the p a t e n t on improvements. I n a recent decision of t h e United States Supreme Court, a p a t e n t on a n improvement admittedly new and useful was heïd invalid because it failed t o reveal t h a t "flash of creative genius" which should pervade all outstanding inventions. If a "flash of creative genius" is necessary for a patentable invention, t h e telephone might qualify in retrospect, b u t w h a t of all the important improvements which have followed t h a t flash and h a v e m a d e the telephone from a toy in 1875 t o t h e necessity it is today? Are t h e y t o be placed outside t h e scope of t h e p a t e n t laws? T h e "flash of genius" t h e o r y would rule out nylon a s an invention because it did not come from a single burst of inspired thought, b u t from several years of intelligently directed research. Nylon is, however, not merely a boon t o America today a s an outstanding invention, it removes our dependence on J a p a n for natural silk and as a peacetime development makes o u r transition t o a war economy easier. I t is one of t h e substitutes which industry provided when no amount of political foresight could have anticipated its crucial need. Critics of the p a t e n t system would have the public believe t h a t as a result of grant-, ing patent monopolies i t is being unmercifully gouged by t h e large corporations, despite t h e fact t h a t t o sell a patented product t o d a y y o u m u s t give the public something new or something better for its money t h a n before. When nylon was placed on t h e market, it h a d t o offer a better, a cheaper, or a superior product to t h e silk hose which preceded i t ; otherwise there would have been n o public re-
AND
ENGINEERING
NEWS
facture these optical instruments in this country which, but for the criticized arrangement, might have been made today in Germany only. Criticism of the Standard Oil Co. of New Jersey for its arrangements with the I. G. on synthetic rubber, made originally in 1929 when nobody contemplated a worldwide war, fails entirely to mention that but for this arrangement the manufacturing rights and the know-how on Buna rubber might not be in this country today. It certainly is better that we know how to make Buna rubber in this country, no matter what we gave in return, than to be entirely without it. The cost of the acquisition was certainly less than if we were forced to develop the entire manufacturing technique after our supplies of natural rubber were cut off. We must not let the critics of our patent system confound and confuse us with charges which essentially beg the main question. Has the patent system contributed t o the progress of mankind and is that contribution sufficient to warrant the continuance by society of the recognition of a property right in the individual sufficient to protect him in the development and improvement of his patentable ideas? These things cannot be judged on a series of individual incidents or inventions, or on a survey of patents as affecting only four industries as in the T. N . E . C. hearings. The progress of mankind after the advent of patent laws must be viewed as a whole. While there are some entries on the debit side of the ledger, the credit side shows a handsome surplus for the society that created the patent right for inventions. If the critics of our patent system have their way, the patent right will be restricted, regulated, and cut down by statute and court interpretation to such extent that the individual or corporation developing an invention will no longer be able t o control it and to say where and how a competitor may come and use it. The international exchange of patent rights may be so fettered with governmental regulations that no one in peacetime will dare enter into an agreement with a foreign
ception and demand for it. What prevails as to nylon applies to the marketing of every other patented product or development. If the public is not offered something better, or cheaper, or both, it does not buy. There is likewise an immediate gain to the public from the marketing of every patented invention. Even though the owner of the patent may make a long profit during the period of the monopoly, and there are many instances in which he does not, he must give the public a sufficient "break" when he puts his product out to make a market for it. When the patent expires, as it does after a limited period, the public gets the full "break" of a new and better product under open competitive conditions. Certain critics of our patent system would also have us think that the international exchange of patent rights and information is an evil for this country. This is a customary part of any war hysteria, but the quickest way we have of getting information and important developments from other countries, whether Germany, France, England, or Czechoslovakia, is through the purchase or licensing of patent rights with the necessary know-how to put them into operation. Our commercial processes of producing synthetic methanol came from Germany after the last war. The fixation of nitrogen, which makes us independent of the Chilean nitrate deposits, came from Germany and was brought to us via the patent system. I n these days of shipping shortages and losses, we would indeed be hard put if we had to provide ocean tonnage to transport all of our nitrates from Chile. Had we had more of these developments, whether made in our own laboratories or acquired abroad, we would be less dependent today on foreign supplies of quinine, rubber, and the like. The Bausch & Lomb Co. has been blazoned in all the headlines for an arrangement to secure manufacturing rights from a German concern on certain optical instruments of a military character, but the important thing is that we have the know-how and the facilities to manu-
V O L U M E
2 0,
NO.
8
»
»
APRIL
2 5,
1942
corporation for fear of being unfairly criticized for unpatriotic action, even though that action may bring this country more than is taken from it. We must not let those things happen. In the aftermath of this war there will be more need for inventive developments than the world has ever witnessed—more need t o encourage rather than discourage invention. The returning soldiers, as well as civilian employees released from war work, must be provided with employment, much of which must come from newly developed industries. The cry for cheaper housing to replace that which has been destroyed will tax man's ingenuity and will bring forth new and cheaper materials of construction and new and improved instruments for household comfort. The replacement of destroyed docks and sunken shipping, opening and efficient utilization of oil from blocked wells, reconstruction of destroyed refineries in the form of cheaper or more efficient units, conversion of the automobile industry from its all-out war effort to peacetime production, and many other problems will call for the exercise of man's best inventive efforts. These things will come at a time when the huge government expenditures for war materials will be cut off, and they must be provided b y private capital and the efforts of individuals such as you and me to get back t o a profitable peacetime business. It is up t o us, while fighting for democracy, t o see that the incentive for these improvements is not reduced or destroyed.
Potassium Permanganate Imports to Ecuador Drop ( J E R M A N T was the principal source of potassium permanganate imported by Ecuador for use in pharmaceutical manufacture and in gold mining operations during 1937 and 1938. The decline in 1939 and 1940 of such imports may have been caused partly by suppression of German foreign trade by war. Imports averaged 4,000 pounds annually in 1937 and 1938.
535
