Lord Chelmsford confirms the legality of this procedure:—
“If he chooses to work the Patent himself exclusively, it is only doing what the law permits him to do.”
Where there is not downright refusal, Sir W. Armstrong shows that patentees ask too much:—
“I have known patentees very exorbitant in their demands for licences—far beyond the merits of their inventions.
“In that case the power of fixing an exorbitant price, really preventing the use of the article altogether, operates very disadvantageous to the public?—No doubt of it.”
So Mr. Newton:—
“The claims of patentees are very frequently, and I may say generally, excessive, and beyond the real value of their inventions; but there may be cases in which new conditions of things arise, and the invention, if invention it may be called, becomes a matter almost of necessity, and the public must have it. The case which has been put, I think, is a very strong one, in which a public company or a large capitalist buys up all the existing Patents, and thereby acquires a power which may be exceedingly oppressive.
“... I have seen much folly in the refusal of licences. I introduced the sewing machine into this country. I sold it for a small sum, and I offered some years afterwards to the owner of the Patent as much licence-money as 10l. per machine, and that was refused.
“A poor man invented and patented the making of ‘cock-spurs’ (supports for dishes and plates while submitted to furnace heat) by means of dies, and established a small business upon the manufacture. Some years later a gentleman improved upon the invention so far as to make the cock-spurs 500 at a time instead of singly. The earlier Patent being brought to his notice, he desired to make terms with the original inventor, and offered him a liberal sum, together with the sole right to sell the new manufacture in his own locality (the potteries). He could not, however, be brought to accept these, or indeed any terms; but, contrary to advice, commenced an action for the infringement, and was cast by reason of an unimportant claim in his specification being untenable.”
As a preventive of this abuse, and almost as a sine quâ non in the Patent system, “compulsory licences” have been proposed (see the proceedings of the Social Science Association, 1858, 1860, ’61, ’62, ’63, ’64), but the Royal Commission has reported against them as impracticable.