Practical Pointers for Patentees

by Franklin Allison Cresee

Most inventors are not concerned so much about the fame or honor their inventions will bring them, or how much their inventions will advance civilization, or build up a nation, or administer to the conveniences and pleasures of mankind generally, as they are about how much it will net them in dollars and cents; but the patentee should not lose sight of the fact that the profits are in the exact proportion to the actual usefulness of the invention, and its general adaptability. It is immaterial whether the inventor himself intends to deal with the public, or to deal with a man or set of men who are afterward to deal with the public, the conditions are the same, and the profits must ultimately come from the sale of the manufactured article.

Pecuniary Value.

It may seem superfluous to say that mere Letters Patent aside from an invention is of no value, though many inventors are under the erroneous impression that if an invention possesses patentability, it must also necessarily have pecuniary value. To be of any pecuniary[p. 31] value whatever, the invention must cover something for which there is a demand, or for which there can be a demand created, for it cannot be disputed, that if an invention will not bring in money by manufacturing it, it is, in a financial sense, worthless; and the patent thereon is therefore worth some seventy or eighty dollars less than nothing.

Commercial Value.

An invention, to have commercial value, as previously stated, must cover something for which there is a demand, or for which there can be a demand created. It may be an entirely new device, or it may be an improvement upon an existing invention, but in any event it must contain a certain degree of utility. In rare cases inventors are able to hit upon an invention in an entirely new field; for these a demand has to be created. For improvements, however, as a general thing, the demand already exists; then the important question arises in determining the commercial value of the patent. "Does the invention in question possess sufficient merit to successfully compete with existing devices of the same class?" In order to do this, it must be of a simpler or cheaper construction, so that it can be manufactured and put on the market at a lower figure; or, it must yield better results, work quicker and at less expense, or economize power, labor, or time. A patented improve[p. 32]ment upon an article that can be sold more cheaply, or one which will yield better results than those now selling well on the market, has a decided commercial value and can easily be disposed of at a good price. If the inventor be fortunate enough to combine both of these features in his invention, the value is doubled and success certain.

Basis for Estimation.

Perhaps one of the hardest questions that confronts the patentee is how to arrive at a just valuation of his patent, and to know just exactly what he should receive for it. This is a very important question, and one which should be looked into before undertaking negotiations. Patentees should not, of course, undervalue their patents, or accept the first small offer made for fear of not receiving another; at the same time, they should not fall into the common error of asking a price that cannot be obtained, which too frequently precludes all chances of a sale. Many business men would rather lose the patent than waste their time constantly dickering about an unreasonable price.

Inventors should be reasonable in their demands, and consider that the purchaser must have a fair share of the profits. He cannot expect to realize all there is in the patent himself. Indeed, patentees usually find that men willing to establish a business on the basis of their untried patents will[p. 33] require the greater bulk of the profits to be derived from it.

General Rules for Valuation.

It is evident that only the most general rules for valuation can be given, as each invention must be studied and valued strictly upon its own merits. Undoubtedly, the best and most practical method of ascertaining the value of any invention which is susceptible of being manufactured on a small scale is to have a limited quantity of the articles manufactured—say five hundred or a thousand—and try the experiment of introducing them in a small territory; that is, in a certain county, city, or town, taking great precaution in selecting a person who is capable of carrying forward the business in a business-like manner. This method demonstrates conclusively whether or not the invention will meet with success, and with these figures at hand the patentee will be prepared to prove, to the satisfaction of interested parties, just what the patent is really worth.