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MAKING MONEY OUT OF PATENTS

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BY WALDEMAR KAEMPFFERT

O invent a successful device is one thing; to make money out of it, another. It is no easy matter to sell an invention that means a change in a time-honored way of manufacturing bedposts or of boiling eggs. The man who invented the vacuum cleaner had to fight rusty household conservatism that found the old broom "good enough." Try and kick up something new and you are bound to stub your toe against the brick concealed beneath the high hat of prejudice. Steam coaches ran successfully in England in 1824. Parliament passed the "Road Locomotive Act," decreeing that a man with a red flag must precede a motordriven vehicle and prohibiting a speed greater than four miles an hour. Thus the automobile was ditched for more than half a century. There are men still alive who can remember the derision that greeted the proposals to telegraph across the Atlantic and to build ships of iron. It took a Niagara of advertising to convince us that a piano could be acceptably played with air instead of flexible fingers trained for years; that a watch costing only a dollar would actually keep time; that a safety razor would mow chin bristles.

It takes as much ingenuity to market an invention as to create it.

Just how that ingenuity shall be exercised depends much upon the character of the invention. A loom that costs $20,000 to manufacture cannot be sold as if it were a breakfast food. There may be only fifty possible buyers in the whole country, and of these perhaps not ten could write a check for the purchase price.

That situation is encountered time and time again. It was encountered, for example, during the building of the Chicago Drainage Canal. Contractors who bid on rock excavation were told that their tenders must not exceed eighty cents a cubic yard. Rock had never been excavated before at that price under the same conditions. The apparently impossible could be accomplished by a combination of two inventions-the cableway and the cantilever, later used with success at Panama. Of these the cantilever cost $28,000. Few contractors could afford to pay that sum. Accordingly the manufacturer leased the machine, with the result that contractors ultimately excavated rock at fiftysix cents a cubic yard: the State of Illinois

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THE CANTILEVER EXCAVATOR
This excavator cost $28,000. By its means the Chicago Drainage Canal was dug at an unprecedentedly cheap rate

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THE FIRST TELEPHONE AND THE MODERN TELEPHONE To the left is Professor Alexander Graham Bell's telephone of 1877, with its casing removed; to the right, the modern desk telephone. Bell's instrument was used both as a receiver and transmitter; hence it was necessary first to talk into the mouthpiece and then apply one's ear to it, in order to listen. Great as this difference is between the two instruments, Professor Bell's receiver is identical in principle with that employed to-day

saved about five million dollars, and the manufacturer made more money out of his machines than if he had sold them outright.

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But leasing is not always effective. The United States Government, the biggest of all contractors, will not pay royalties. insists on owning its own machinery. Edison has invented a powerful rock-crusher which can pulverize a twenty-ton boulder. On the whole continent there is not a market for a dozen such machines, and the profits on the dozen would not pay the expense of the hundreds of experiments made before the crusher became a practicable machine. Colonel Goethals wanted to buy such a crusher for breaking rock to be used in constructing the Gatun Dam in Panama. Edison asked a small royalty for each ton of rock crushed, a sum that amounted to but a small fraction of the saving that would be effected. The negotiations failed.

Leasing is probably the most approved

business method of placing a complicated machine on the market. The most important machines used in shoe manufacturing are welters and stitchers. These are leased and never sold-leased, moreover, on such conditions that the welter may not be used with a competing stitcher, nor the stitcher with a competing welter. About five and three-quarter cents for every pair of shoes made by these machines is paid by shoe manufacturers in royalties. In addition to the welter and stitcher the shoe machinery patentees place at the disposal of the shoe manufacturer some twenty-six auxiliary machines, which he may or may not use as he sees fit, and for which only a nominal rental is charged, varying from $5 to $35 a year-barely enough to pay for wear and tear. These auxiliary machines, however, may not be used unless the welter and stitcher are leased. Such "tying " clauses in leases were invented long before the modern trust was

conceived. Although their legality is now being subjected to judicial scrutiny under the Sherman Law, it cannot be denied that the leasing system has enabled many a poor man who could not afford to buy machinery to engage in shoe manufacturing with little capital.

In the testimony taken in the now famous "Dick-Henry case" we learned of still another method of marketing patented machinery, a method which consists in selling a device at less than cost and compelling the purchaser to buy from the manufacturer whatever supplies may be necessary to operate the device. If supplies bought in the open market are used, the patent is infringed, because the inventor or his assignee has the exclusive constitutional right to use the machine in any way that he himself sees fit and has permitted the purchaser to use the machine only in a certain prescribed way. So the courts have held time and time again in cases decided long before Dick vs. Henry aroused comment.

Few inventors have ever grown rich by reason of the royalties that have been paid to them. To make a fortune out of a new tool or a new folding-bed the inventor must become a manufacturer. Even Edison would not be a wealthy man to-day if he had sold his more important inventions instead of inanufacturing them himself. His method is that adopted by most knowing patentees. The presses used in the Governinent's mints for coining metals are produced and sold by their inventor, Oberlin Smith. In Pawtucket, Rhode Island, is a prosperous plant built by the two inventors of successful metalshaping machinery. The instrurnents used in telephone central stations to record the duration of a conversation were invented by a man who is president of the company by which they are made.

None of these inventions was ever in

Whether it be

troduced in its initial form. a collar button or a locomotive, a battle-ship or a tin whistle, an invention never leaps out of the Jovian head of the inventor a perfect mechanical Minerva. Its fruition is often a

process of years. The first telephone produced by Alexander Graham Bell could hardly transmit speech. Years of patient laboratory work and millions in money were expended in developing a system of communication that will handle a million and a half calls a day in New York alone; that will enable an operator to connect two subscribers in a city in less than fifteen seconds; and that has made it possible to talk more than two-thirds of the way across the North American continent.

Thomas A. Watson, one of the pioneer telephone engineers of this country and an assistant of Bell's, draws this picture of the first demonstration made between Boston and New York in 1877:

Our laboratory was on the upper floor of a boarding-house in Boston. The house was full of boarders, whom we had disturbed quite seriously with all sorts of noisy experiments. I realized that since I had to do the shouting of my life that night, I would have to do something to muffle the noise. I took the blankets off my bed and Dr. Bell's and arranged a sort of tent over my big telephone with five thicknesses

A LEASED MACHINE FOR SHOE

MANUFACTURING

This is an outsole rapid lock-stitch machine, used to fasten the outsole with a lock-stitch to the welt in making a welt shoe. The machine was developed, at a cost of many thousands of dollars, by professional inventors

of blanket. When I got the signal from Dr. Bell in New York that he was ready to hear me, I crawled in under my blanket tent, and for two mortal hours I shouted to him.

It takes imagination to see the possibilities of a great invention. The telephone seemed so unpromising in 1877 that the Western Union Telegraph Company refused Bell's offer of $100,000 for his patents. A newspaper editor, Frederick Gower, who had a contract now worth millions for the exclusive use of the telephone in New England, gladly exchanged his contract rights with Mr. Gardiner Hubbard,

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UNION HIGH SCHOOL

SAN FE

FERNANDO, CALIF

MAKING MONEY OUT OF PATENTS

Judge Coxe went out of his way to comment on the crudity of epoch-making inventions and the systematic improvements necessary before they could be commercially introduced. Not only was the Morse telegraph a fit subject for a museum within a few months after its first feeble success, but the Howe sewing-machine, he announced from the bench, could not be successfully used by any woman for ten years after the patent was granted. Yet both Morse and Howe are deservedly regarded as great American in

ventors.

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three years of patient,expensive,heartbreaking experimenting. A special hydraulic press had to be built, and other special machines as the experiments called for them. Then it was discovered that the press was not strong enough. An entirely new one had to be designed and constructed. Next it was found that the idea of printing one wet color upon another was impracticable with the printing inks on the market. An ink chemist was employed, who spent over a year in the unsuccessful effort to produce inks. of the desired character. After he failed, a practical printing ink maker was engaged, who finally succeeded after many months. Even though the process, the press, and the inks seemed perfect, no satisfactory results could be obtained. It was discovered that the arrangement of the printing cylinders was at fault. Because they were arranged vertically, so that the lowest one was near the floor and the uppermost one near the ceiling, they were subjected to different degrees of temperature, which affected the working of the inks. A new press had to be designed and built with horizontal cylinders, all lying in the same zone of temperature, and then, at last, success was assured-but only success in solving the problem of printing several colors at one operation. The problem of selling the press had not even been attacked.

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THE ARTIFICIAL DAYLIGHT LAMP

After years of experimenting, Dr. Herbert E. Ives has invented a
lamp the radiations of which are the equivalent of artifi-
cial daylight. The invention consists in the use of colored
screens which sift out those rays of an ordinary tungsten
filament lamp which are undesirable. Before artificial
daylight was thus attained no gem expert would
buy a diamond late in the afternoon, no artist
would paint after four o'clock,, no color
printer would attempt to manipulate. inks,
no dry-goods merchant would try to
match fabrics, except in full daylight

It took ten years to produce a press on which the colored covers of our magazines could be printed at one operation. Colored

reproductions of paintings are usually made by printing three or four colors, one after another, the paper being allowed to dry after each printing. With the rotary multicolor press, white paper is fed in at one end, and emerges at the other completely printed. Such presses had been used for very rough work, but were utterly unadapted in their original form for fine magazine-cover printing. The most skillful pressman and engraver in the United States were engaged to solve the basic problem of preparing printing plates so that no "make-ready," as it is called in the trade, would be necessary. By 1901 a self-printing plate had been invented. Next came the problem of bringing it to commercial perfection-a problem that involved

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The manufacturer found it difficult to interest publishers and printers in his method of printing four-color magazine covers at one operation. They came and watched the press, marveled at its performances, but did nothing. They refused to believe their own eyes. In sheer desperation he had to install the press at his own expense in a large pub

lishing house and to furnish his experience and assistance in trying it out. Even then the machine ran for nine months every day before the publisher was really convinced that it could do his work.

The same story is repeated over and over again even with insignificant toys, hardware novelties, tools, and the like. A half-dozen patented safety razors are at present competing with one another on the market. The perfection of each has cost a king's ransom. On one of them the sum of two million dollars is said to have been spent to make it marketable, and as yet without avail. The most widely advertised and most widely sold safety razor is the successful outcome of seven years' hard work-seven years spent not simply in producing the original invention, but in tempering thin steel, in producing a handle to hold the blade, in devising machine tools that would stamp blades out

market made its appearance only after an outlay of $400,000.

Many inventions are the result of a single excursion into the field of invention-not because the patentees are discouraged by the obstacles that they encounter, but because they are intellectually exhausted. Oliver Wendell Holmes once said that every man had at least one novel in him. He might have added that most of us also possess creative ability enough to evolve at least one invention. Just as many a novelist exhausts himself with a single splendid piece of fiction, so many an inventor's ingenuity is spent in enriching his day and generation with but a single contrivance. Howe is remembered for his sewing-machine, and for nothing else; Bell, for the telephone alone; Morse, simply for the telegraph.

It is curious, too, how many of these men were not academically trained en

would invent a telephone, you must not be an electrician, but a teacher of deaf

mutes, as Bell was when he came to this country. If you would devise a telegraph you must emulate Morse and achieve distinction as a portrait-painter. If you would enrich the world with a phonograph, moving picture machine, an incandescent elec

of a ribbon of steel. Few patented inventionsgineers or mechanics. Apparently, if you have ever been brought to a marketable condition in less than ten years, and no invention is ever made exactly in the form described in the patent. It seems no astounding feat to apply ballbearings to a carpet-sweeper, so that the machine can be pushed over a floor easily. Yet that rather simple improvement meant thirteen years of inventive effort on the part of the foremost manufacturer of carpet-sweepers in

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THE FIRST STEAM TURBINE ENGINE

Eight years of time and about five millions in dollars were spent before this
first large Curtis steam turbine was built. The engine, which was
originally installed in a Chicago power-house from 1901 to 1904, is now
erected in the yards of its manufacturer to commemorate the
beginning of the turbine industry in America. The sum of
$1,500,000 was paid for the Curtis patents alone. Several
millions more were then spent in experimenting and in im-
proving the first machine built according to the patent

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tric light, and nine hundred other successful inventions, you must begin, it would almost seem from the history of invention, as Edison did, by selling newspapers on trains and picking up your electricity, your chemistry, and your chanics as best

you can.

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