Part 5

“Then there are cases of disputed claims by rival inventors, which are embarrassing to a department; we do not know who has a claim to a Patent, and sometimes when we buy a Patent of one person we are told that we have done a great injustice to another. I remember that when we paid for the Griffith patent screw, which was cutting off a small portion of the screw, I had repeated letters from Sir Howard Douglas, telling me that it was a great injustice to him; that he had invented all this, and that his fame was diminished, and that his rights were taken from him by the Admiralty, who had most unjustly and unfairly paid Mr. Griffith. Those cases are continually arising, and of course they are very inconvenient for a department: they not only take up a great deal of time, but they very often prevent some very desirable process being gone on with.”

Admiral Robinson said—

“There have been twelve upon the construction of ships since 1861.

Mr. Bush Construction of ships. Mr. J. Clare Construction of ships. Mr. P. Drake Construction of ships. Mr. A. Lamb Construction of ships. Mr. W. Rae Keels, stern posts, &c. Mr. Thomas and Col. De Bathe Mr. G. Clarke’s target. Mr. Truss Animal fibre. Armour plates. Mr. Beslay Preservation of iron. Capt. Wheatley Position of guns in ships. M. De Lapparent Carbonising timber. Commander Warren Bow rudder. Mr. Feathers Construction of ships. Messrs. Woodcraft, Smith, Ericsson, Purchase of Patents for screw Lowe, Blaxland, and Mr. Currie. propellers. Capt. Carpenter Screw propeller. Capt. Trewhitt Disconnecting apparatus. Mr. Griffith Screw propeller. Mr. J. O. Taylor Screw propeller. W. Ireland Cupola. Messrs. Laird and Cowper Trimming coals in ships. —— Distilling apparatus in ‘Defence.’

“In those cases the patentees claimed compensation for infringement?—Yes; and it was necessary for the Admiralty to have recourse to their solicitor, and to enter into a very long correspondence.

“It is very possible that you may infringe upon these Patents without knowing it?—Constantly. The inconvenience which the Duke of Somerset has mentioned resulting from Patents applied to shipbuilding is so very great that it is scarcely possible to build a ship, being a combination of wood and iron (and you always have some of each in a ship), without treading upon somebody’s Patent; and I am entirely of opinion that the Patents are drawn up for that especial purpose, without any idea of their being practically applied for the benefit of the public, but only that the patentee may lie in wait for a colourable evasion of his Patent taking place.”

Now I present the evidence of General Lefroy, deputed by the War-office:—

“The expectations of patentees are very extravagant, generally speaking, and prior to trial it is very difficult to determine at all what is the value of an invention. As an example, a gentleman some time ago made a great improvement in cooking apparatus, and he assessed his own reward at a large portion of the whole saving in fuel which might be effected by the application of this improvement to an enormous extent upon the whole military consumption of the Crown, which would have come to many thousands of pounds. Such an improvement should not be assessed by the value to the Crown, but by what it cost the originator in intellectual labour or previous experiment, and its importance in a large sense.”

Let me next cite Mr. Clode, Solicitor to the War-office:—

“If he has not the power either of keeping those improvements perfectly secret, or of securing them to himself by Patent, then the War-office authorities are placed in the position of having in all probability to pay private individuals for inventions or improvements actually made by their own officers.”

Next Mr. Abel, F.R.S., Head Chemist to the War Department:—

“In your experimental inquiries, when you have happened to fall upon any discovery, you have not been much annoyed by claimants saying that they have had precedence of you?—Not at all, and it is to that that I referred in my first answer. We do not meet practically with those embarrassments during experiments, but we may meet with them in applying the details of improvements. For instance, I am at present engaged upon the working out of the application of gun cotton, the whole details of which application were communicated as a great secret to this Government by the Austrian Government.... While every care was taken by this Government to keep them secret, a Patent was taken out in this country for the whole improved process of the manufacture.”

Mr. Clode again:—

“Some time after I commenced these experiments, while they remained a perfect secret, and while every care was taken by this Government to keep them secret, a Patent was taken out in this country for the whole improved process of the manufacture.... One of them who is present is experimenting upon gun cotton, but it is with him a matter of extreme embarrassment to know how to deal with the subject; if he discloses by way of specification all that he knows, he sends the invention or discovery he has made away to the winds—the very night that it is put upon the file it goes to Paris, Dresden, Berlin, and elsewhere. If he does not do that, he is afraid that some man will find out precisely what he has in view, and put a Patent on the file, and tax the Government in that way. So that we are upon the horns of a dilemma.”

If I were now to stop, and say not a word more, I might trust to the candour of the House for an admission that the case against Patents is proved, on the ground that the conditions of the Statute of Monopolies have been systematically violated, these violations being of the very texture and vitals of the institution.

But I proceed. If the House permit, I will now advert to the new phases the question has assumed since the inauguration of free trade, understanding by that term _le libre échange_, and not _la liberte du travail_.

The pernicious effect of home Patents on trade with our Indian empire, is stated thus by Mr. Rendel, in 1851:—

“As engineer to the East India Railway, we had a little inconvenience the other day; we wanted to manufacture articles patented in this country, and we would have had to pay Patent-rights; it was a question whether we had not better buy the iron in India, and avoid the Patent-rights. Those cases, I think, are constantly occurring. The Patent-Laws not being applicable to India, people will not unfrequently order things to be manufactured in India to avoid the licence dues in this country; and the consequence was that I made an arrangement with the patentees at about one-half of the ordinary charge for the Patent in this country.”

In 1851 it was proposed, and in 1852 an Act was passed, to limit British Patents to the United Kingdom, with exclusion of the Colonies. This change was desired by an influential and intelligent portion of the West India Association. Their conduct contradicted, and their experience proves the fallacy of, the allegation so confidently made and repeated in spite of its futility, by some interested or else ignorant parties, that inventions thrive most where Patents exist—_i.e._, where trade is trammelled with prohibitions or burdened with royalties. The home sugar refiners exclaimed against an exemption which, being partial, operated against their trade. The following is an extract from one of the petitions presented by that body:—

“That, so far as regards home manufacturers and producers, such a change of the immemorial usages of the kingdom is virtually a bestowal on parties carrying on the same businesses in the colonies of a right to use patented inventions fourteen years sooner than they.

“That if, at any time, the British Parliament might have put home manufacturers on such an unfavourable footing, surely this cannot be supposed under free-trade and equalised duties, when they must task their utmost energies, and adopt every improvement in mechanism and processes, in order to maintain their ground.

“That the use of future Patents, at the rates that have been freely paid by sugar refiners for Patents granted before now would subject each sugar house, of average size, to a payment of about £3,000 a year.

“That to exempt their competitors in the colonies from such a tax (for tax it is, payable by order of, though not to, the State) is really to give them a bounty of that very large amount.

“That, in so far as patent fees may be considered a premium for stimulating improvements, an equal share of the benefit is enjoyed by the colonists, who, therefore, should bear a due share of the burden.”

Soon after that time, protection having ceased, the unfairness of burdening British manufacturers came more vividly into sight. How can they compete with Prussia and Switzerland? Here is evidence regarding those countries. From a Prussian witness:—

“I am a member of the Board of Trade and Commerce, and at the same time a member of the Patent Commission.

“Will you be good enough to state what is the system adopted in Prussia with regard to protection to inventions?—We have the principle in our country to give as much liberty as possible to every branch of industry and art, and, considering every sort of Patent as an hindrance to their free development, we are not very liberal in granting them. We merely grant a Patent for a discovery of a completely novel invention, or real improvement in existing inventions.”

From an important Swiss witness:—

“There is no want of persons to import them into Switzerland, although those persons thus importing them obtain no monopoly?—When a Patent is taken out in France or England, the process is published; therefore it becomes the property of the public in Switzerland; the Swiss have access to the French or English Patents.

“In that way the Swiss have the benefit of the invention without the charge of the licence?—Yes.

“And so far they have an advantage?—Certainly.

“When inventions in the watchmaking trade are made in France, are they immediately introduced into Switzerland?—I should think so, if they are useful.”

How, I ask, can British manufacturers compete with Prussia, which prudently grants less than 100 Patents in a-year; or with Saxony, which grants only about 134; or the Netherlands, which grant only about 42? Rather, I may ask, how can they compete with other countries in general, even those that grant Patents freely, seeing that it is not incumbent on the British patentee to take a Patent in any other country whatsoever; seeing also that, unlike some countries which grant Patents, we in most cases do not terminate the currency of those we grant at the time when the Patents taken elsewhere expire? Honourable members will understand how serious is the disadvantage under which our manufacturers, and with them, of course, the labourers and artisans who co-operate in manufactures, are placed if they are precluded from using inventions which their continental rivals may use. When licences are given by patentees, the disadvantage is lessened, but not very greatly. The House will agree when it hears how enormous are the royalties sometimes exacted. For a set of inventions in the iron trade, which is not the subject of Patents in Prussia, a single firm is said to be paying at the rate of £16,000 every quarter. Let me quote from a leading article in the _Engineer_:—

“Owing to the invalidation of his Austrian Patents, Mr. Bessemer derives no pecuniary benefit from the working of his inventions in that country. This is also the state of things in Prussia, whose really iniquitously-managed Patent Commission have refused to give Mr. Bessemer any Patent at all. The great Prussian steel works there manufacture Bessemer steel unweighted by any royalty. We regret this, not merely for Mr. Bessemer’s sake, but also on public grounds. Our steel makers are thus heavily handicapped in the industrial race with royalties of from one to even three pounds per ton.”

See a confirmation of this in the following piece of a private letter:—

“The very heavy royalty payable under Bessemer’s Patent does, to a very great extent, prevent English manufacturers competing on the Continent for steel rails; but, from the accidental circumstance of continental manufacturers being obliged to buy a considerable portion of their raw material from this country, we have not been exposed to competition in England, as the cost of carriage backwards and forwards about equalled the benefit which the Germans enjoyed of paying no royalty.”

The sugar-refiners, in a printed document before me, put the case, convincingly no doubt to all who will consider how small is the percentage margin of profit in great businesses:—

“If, for any invention, French producers of refined sugar should have only royalties of one per cent. _ad valorem_, while the British should have to pay royalties of five per cent., it is obvious the Patent-Law may in effect impose on the latter a most onerous differential duty.”

In that trade I myself, shortly before my retiring from commerce, paid £3,000 for a year’s right to use a new process, which proved unworkable, and had to pay a _solatium_ of £1,000 for leave to discontinue it.

The agricultural interest should not remain indifferent. Mark what was told the Commission by Mr. Reeve, Registrar to the Privy Council. In Mr. Bovill’s Patent there was charged a royalty of 6d. a quarter on all the corn ground in Great Britain by millers who thought it desirable to adopt his plan. Obviously the royalty in that case had the effect of a protective duty leviable for individual benefit, and enabling foreigners to undersell in the British markets. And what title to this power had Mr. Bovill? He was not the inventor. Another case is exhibited in the following extract from a private letter with which I am favoured, from a highly respectable quarter:—

“Patents have become so numerous and so various, that it is not safe to use any piece of machinery, or make any variation without first making a careful search to ascertain whether it is not protected by a Patent. The Patent-Law has also been the cause of much litigation, there being very few Patents of any real worth but have had to go through the ordeal of the Law Courts, and there can be little doubt that injustice has frequently been done both to patentees and to the public. A case of considerable hardship connected with our own trade occurred regarding the application of the exhaust to grinding purposes. It was clearly proved at the trial that the machine for which the patentee claimed protection had been in public use in Denmark, where it had been seen by a Glasgow miller, who erected a similar machine on his premises in Glasgow, but hastily threw it aside without putting it to a proper test prior to the date of the Patent, but it was held that no profitable use having been made of the machine by the Glasgow miller, the Patent was good and perfectly protected. In our opinion a Patent obtained in such circumstances should never be allowed to stand, and if some means could be devised for ascertaining the circumstances beforehand, it should never be granted. The trade suffered very considerably in consequence of this Patent being sustained, and the consequence was, that although the patentee was not the original inventor, he pocketed a very large sum of money.

“A more recent instance has occurred, however, of a large sum being pocketed by parties not the inventors of the article patented. We can, however, only give you the figures as popularly reported, without vouching for their accuracy, and in relating the story we shall endeavour to reply to your queries _seriatim_. 1st, The patented article is a machine for dressing millstones by means of a black diamond, or piece of ‘bort,’ instead of by the hand with picks. It was originally patented in France by the party said to be the inventor, and shortly afterwards was patented by him in this country. 2nd and 3rd, A Leith commission agent (a German) and an Edinburgh miller saw the machine in the Paris Exhibition of 1867, and induced the patentee to bring it over to Scotland for trial, and ultimately they, in conjunction with a third party, purchased the patentee’s right for the whole kingdom for £4,000. 4th, These parties immediately put the machine in the market, and it was at once seized hold of by speculators, who readily gave most extraordinary sums for it. One party is said to have paid £40,000 for the right for a dozen counties in England; another £15,000 for three counties; and another £20,000 for some counties in Ireland: the whole sum realised by the original purchasers amounting, it is said, to upwards of £150,000. 5th, The consequence is, that such enormous sums having been paid by the speculators, the trade can only get the use of the machine by paying a most exorbitant price, and hitherto it has remained all but a dead letter. We cannot give you in round numbers the amount expected to be realised by the speculators, but the price originally charged by them would have yielded four or five times the amount they paid if the whole trade had become purchasers. This machine has not yet been the subject of litigation, but there is every probability that it soon will be.”

But I can reproduce a case where the effect was far, far worse, communicated to me in a private letter:—

“The patentee of the Howard series of improvements in sugar-refining granted licences to houses in Liverpool and Hull, with a condition in each case that he would not grant a licence to any party carrying on business within seventy miles of either town. A sugar refiner of long standing, established in Sheffield, applied for a licence, and was refused for the reason above stated, Sheffield being just within the prescribed distance. The consequence was, he had to carry on his manufacture for nearly fourteen years on the old system; and during this period sustained great losses by working, which he, as well as parties cognisant with the facts, attributed to the disadvantage he was compelled to carry on under. His fortune disappeared, and he became insolvent.—I am, &c.

“Sheffield, December 17, 1863.”

This distressing result will, I trust, drive home the conviction that, great as is the evil of multiplying Patents, it would be but a mitigation not worthy of being looked to as a cure, to get the number lessened.

If in an earlier part of this address I have shown that the condition not to produce “general inconvenience” has been preposterously set at nought, surely these passages prove no less conclusively that there has been equal disregard of the condition not to “hurt trade.” I will satisfy myself, and I hope the House, with one extract only to prove what I apprehend is the rule rather than the exception, that Patents offend against the other condition, not to “raise prices.” It is from a paper read by Mr. Lowry Whittle before the Statistical Society of Dublin:—

“I was informed lately of a case in the North of England where a successful patentee produced a machine at the cost of £200 for working in the linen trade. On this machine his royalty is £1,000.”

I may give one instance from my own experience, where the pretensions of the applicant for a Patent were equal to about a farthing a pound on all the sugar that the process perfected. The House may understand the hardship this would inflict on the population when told that it was for the use of a single process only, or rather of a machine invented by another, an engineer firm, who had overlooked, and not included in their Patent, its applicability to sugar. My experience in that case was very instructive. Pardon my introducing a few particulars. I have no reason to think the idea of applying the machine to the refining of sugar was original; on the contrary, it had been already made practical on the Continent. Nor was the idea patented by my friend alone; on the contrary, to several persons it had occurred, by some (I forget how many) it had been patented. One of my partners and I had a good deal of travelling in England and Scotland, when we discovered the first patentee of the application at length. We traced the indubitable priority home to a good neighbour, whose office was within a bow-shot of a sugar-house of which I myself was managing partner. He told me, when I called about his Patent, that he had not attended to it for years. I regret to be able to add that he was afterwards led, by representations which I will not characterise, to part with his privilege—it was really a very valuable one—for a most inadequate consideration, to a person who had applied for a parasitical Patent for something, the value of which could not be substantiated. Perhaps the worst of all is, that the really most meritorious person, the patentee of the machine, got comparatively little advantage from its new but natural application. A coalition was formed whose terms violated one of the conditions to which I have called attention, by charging an exorbitant price for the machines, and, what is the greatest mischief of Patents as now administered, by further charging high royalties proportioned to the quantity of work they did.

Now will the House consider why it subjects the nation to all this inconvenience, loss, and expense? It is not because without it we would miss many important inventions. The groundlessness of such a fear has already been indicated with sufficient plainness.

The House can hardly doubt, from its individual acquaintance with what goes on in the world, and from the extracts I have troubled it with, that whatever argument in favour of maintaining a Patent system may be founded on the claims of inventors, the material interests of the nation would suffer little from the cessation of Patents as a stimulus. Unquestionably, if the system induces some inventions to be made and published, it deters others. What we gain is a matter of doubt. That much inconvenience is inflicted by it, and much disadvantage and very heavy burdens, is no matter of doubt. It is a case in which we have to balance the positive disadvantages against the supposed advantages. To enable the House to weigh these, by seeing how few inventions we would lose by total abolition, a few more quotations may be permitted.

Very significantly Mr. Richard Roberts answers:—