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July 5, 2009

Patent Americana

England's Statute of Monopolies, passed by Parliament in 1624, curtailed the crown's abuse in handing out monopolies, while codifying handing out monopolies, being only tangential to patents as we understand them. English letters of patent were monopolistic grants for inventing or importing new things, but also licensing business, as a means for restricting competition generally. In what became rogue colonies, the Americans were handing out their own monopolies.

The American colonies, which themselves were chartered by royal grant of letters patent, began parceling out their own patents in the mid-1600s, and continued the practice under the Articles of Confederation. As in the mother country, such patents were more for rigging the game for favored businesses than for invention.

In 1641, the Massachusetts General Court passed a law that prohibiting monopolies, but granting patents for invention. Five years later, the first known invention patent was granted to Joseph Jenks, for a water-powered mill.

Only a few invention patents were granted in the 17th century. Besides Massachusetts, Connecticut, Maryland, New York, Pennsylvania and South Carolina granted patents. The other colonies did not grant invention patents.

Only one recorded priority dispute arose for patents granted by the colonies. Maryland granted two patents for threshing machines in 1770, one to John Clayton and one to Isaac Perkins. The issue of resolving priority was avoided by granting narrow claims for the different machines, which were considered "constructed on different principles."

Too busy inventing a country, no patents were issued during the Revolutionary War. But the new states took up where the colonies left off, building domestic industries and promoting progress. In 1780, Pennsylvania, then New York, issued their first patents. Connecticut issued its first patent in 1783.

South Carolina passed the first general patent statute in 1784. It had no proviso for handling priority disputes.

The Articles of Confederation offered two paths for staunching infringement that transpired in multiple states. A patentee could petition each state to recognize his invention by letter of patent. The other approach was to patent in one state, and request in the petition to prohibit infringing imports, or confiscation of products made using an infringing process. The first approach was expensive, and time consuming. The second approach was limited, and uncertain.

The need for a national patent regime was commented on as early as 1787. But Congress had no authority under the Articles of Confederation to do anything. The Articles reserved to the states all power not specifically enumerated for the national government. Granting patents wasn't an enumerated authority. The Constitution was not ratified until 1790.

The need to petition in multiple states for a patent led to priority disputes. The first was over steamboat technology. James Rumsey got General Washington to grant him "a certificate stating his belief in the utility, novelty and enablement" of his steamboat. Rumsey plied his certificate to get patents in Pennsylvania, Maryland, and Virginia in 1785. The same year, John Fitch presented his steamboat design in Philadelphia, and petitioned the Continental Congress for funds to develop it. Strapped for funds, Congress demurred. But Fitch got patents in New Jersey in 1786, and in four other states the next year. Fitch sparked a priority dispute with another steamboat inventor, Arthur Donaldson, in Pennsylvania. Fitch established priority by having first publicly disclosed his invention.

Fitch petitioned Maryland, but lost out to Rumsey, who had political connections there. But Fitch was able to get a grant in Virginia despite Rumsey, as the authorities decided the claims did not overlap. Maryland decided similarly, granting narrowly, in 1770, over different threshing machines.

Pennsylvania (1786) and Maryland (1787) adopted priority rules, granting priority to the party first to invent. These early rules were influential. Some members of the first Congress had served in the legislatures of these states.

The Patent Act of 1790 lacked a mechanism for handling priority disputes. The matter was left to the discretion of the patent board, which originally consisted of Secretary of State Thomas Jefferson, Attorney General Edmund Randolph, and Secretary of War Henry Knox.

Fitch and Rumsey squared off again. The situation was awkward - whether to recognize earlier state filings, or grant priority based upon national filing. Attorney General Edmund Randolph suggested first to file at the national level. This was not accepted. But Jefferson declared that it was not appropriate for the patent board to decide the dispute based on earlier state filings. The outcome was, like the Maryland threshing machine resolution, to give narrow grants, and thus avoid adopting either first-to-file or first-to-invent.

The 1793 Patent Act provided a procedure for deciding priority disputes, based upon first-to-invent. But the clause was hollow, because there was no examination of applications - patents were granted on demand. A specific rule for establishing priority was not spelled out until 1836, when examination was reinstituted.

Source: "The End of the First-to-Invent Rule: A Concise History of its Origin" by Michael Martin. Apparently, concise is in the eye of the beholder.

Posted by Patent Hawk at July 5, 2009 5:51 PM | The Patent System

Comments

Small quibble, though I think the better term is "letters patent" (literally, letters open or open letters as compared with closed letters--which reflects whether or not the letters declaring rights were directed broadly to the public) rather than "letters of patent."

For an insightful history into the background, formation and evolution of US and colonial patent law, I highly recommend the work of Edward Walterscheid, who wrote a series of articles on the subject, entitled "The Early Evolution of US Patent Law - Antecedents" in the Journal of the US Patent and TM Office Society" (Vols. 76-78, 1994-96). He also wrote a book on the subject, though I have not yet read the book.

Posted by: Bob at July 6, 2009 5:11 AM

Nice post. I was thinking only the other day that the European patent system is what it is today purely because of the complicated pre-existing relations between the European member States.

The intriguing thing is that some of the best features of European patent law as it is today(for example, the EPO's EESR, and the competition between the courts of England, Germany and The Netherlands for the litigation business) came to pass through sheer serendipity, and would appear to be defects in the system, at least to any external academic, who is not actually involved in the system.

Posted by: MaxDrei at July 6, 2009 10:32 PM