Practical Pointers for Patentees

by Franklin Allison Cresee

In a preceding chapter, the dangers and disadvantages of an undivided interest are set forth, and it cannot be considered a wise course under any consideration to part with any undivided interest in the proprietorship of the patent, unless unusually well paid, or there exists an agreement of copartnership between the patentee and the assignee. By such an assignment, no matter how small, the patentee loses control of his patent.

Dividing a Patent into Different Classes of Rights.

Many patents, from the nature of the invention, can be subdivided into different classes of rights, and each class sold or granted separately as the patentee may choose. Thus, the patentee of a tire, or other appliances for a bicycle, could license one party to make the same for bicycles and another for automobiles. In like manner a car-coupler could be divided between those who build railway equipments and those who build street-cars, and so on.

Goodyear, the inventor of the process of vul[p. 60]canizing rubber, divided his patent up into many different rights, licensing one company for manufacturing rubber combs, licensing another for hose pipes, another for shoes, another for clothing, and a number of other different rights, for which each company or partner paid a tariff. Lyall, inventor of the continuous loom, also divided his patent into many different rights; one company weaving carpets, another corsets, another bags, another sheeting, etc.

In every case where the invention covers articles not in the same line of manufacture, the patentee should not fail to divide the rights into different classes, granting each party only such rights as they may be interested in. In this way the patentee can quite often double or treble the receipts from his invention.

The patentee may, if he desires, have his machines built and require the purchasers to pay him a regular annual rental on each machine, or a tariff upon the goods produced, in addition to the price of the machine. Companies are sometimes organized to manufacture an invention, and employ travelling men to place the article on annual rental instead of selling.

Selling by Territorial Rights.

Another method is to sell State and county rights. This consists of a license whereby the patentee, in consideration of a certain sum of money paid him, grants unto another person or[p. 61] persons the exclusive right to make and sell the invention, and to authorize others to make and sell the same, within a specified territory, during the life of the patent. This plan of disposing of a patent has often been highly profitable, but it must be said that these territorial sales have been conducted in such a manner in the past, as to bring the whole system of selling patent rights into disrepute, and in recent years patentees have found some difficulty in making sales in this way, unless the device is of unusual great novelty and attraction to householders or the general public.

Occasionally, however, there are patents issued for meritorious inventions that are susceptible of this mode of procedure, and which can be disposed of to the greatest advantage by territorial grants. Such inventions as household novelties possessing great merit and utility have been most successfully placed upon this plan, but it must be remembered that the value of the system rests upon its capabilities of effecting sales of the manufactured article to a vast proportion of the people.

In selling territorial rights it is a mistake to begin with the small places with the idea of working the business up and effecting larger sales on the basis of the smaller ones; it is better to shove the sales, as much as possible in the start, and after[p. 62] the more valuable portion of the territory is disposed of, proceed with the balance until it ceases to be profitable.