A GOOD PATENT, PROPERLY HANDLED,
IS A STEPPING STONE
TO SUCCESS AND FORTUNE.
PRACTICAL
POINTERS for PATENTEES
CONTAINING VALUABLE INFORMATION
AND ADVICE ON THE SALE
OF PATENTS
AN ELUCIDATION OF THE BEST METHODS
EMPLOYED BY THE MOST SUCCESSFUL
INVENTORS IN HANDLING THEIR INVENTIONS
By
F. A. CRESEE, M.E.
Revised and Corrected, with New Forms and Tables of Population
of the United States in Accordance with the 1910 Census
MUNN & CO., Inc.
Scientific American Office
361 Broadway
new york
1912
Copyright, 1901, by the
POTOMAC PUBLISHING COMPANY
Copyright, 1902, by
MUNN & COMPANY
Copyright, 1906, by
MUNN & COMPANY
Copyright, 1912, by
MUNN & CO., Inc.
New York
Macgowan & Slipper
30 Beekman Street
PREFACE
The original conception and working out of an invention is usually a labor of love on the part of the inventor: having perfected his invention in every detail, he finds able and skilled counsel waiting to prepare and prosecute his application for patent before the Patent Office Examiner. When the patent is allowed or issued, the patentee's real work begins—that of turning the patent into money. This is the business end of the inventor's work, which is generally to his interest financially to undertake himself, or to have under his immediate supervision.
The object of this little work, based upon the experience and observation of the author and other successful inventors, is to give the patentee such information and advice as will enable him to proceed more intelligently, on the most successful and economical basis, to realize from his invention.
The American Government issues annually over thirty-five thousand patents, a large number of which are offered for sale by their respective patentees, who in many cases have no definite p. 4lines to pursue in negotiating their patents; many realizing little or nothing from their inventions through careless or bad management, while others, through incompetency, drift into the hands of unscrupulous patent-selling agents only to be swindled.
The numerous inquiries from patentees seeking practical, reliable, and up-to-date information as to the best and most successful methods of realizing from the product of their ingenuity, has led the author, after due deliberation, to prepare and present this work to the American inventor, with a view of supplying a long-felt want, with the hope that it will save them many expensive experiments in handling their patents, and advance them on the road to success.
It has been the endeavor of the writer to cover briefly every subject that is usually encountered by patentees in disposing of their patents, not only in the matter of selling, but also in the equally important and perplexing questions of arriving at the value of patents, legal forms, statistics, etc., etc.
Realizing that the work may be deficient in many respects, the hope that it will prove instructive, and the belief that it contains many practical pointers for patentees is still entertained by
THE AUTHOR.
CONTENTS
p. 5
CHAPTER I. DEMAND FOR INVENTIONS OF MERIT.Monopoly in Patents—Industrial Progress Based upon the Patent System
9-12 CHAPTER II. INCOME FROM INVENTIONS.Independence through Successful Invention—Unprofitable Patents—Money in Patents—Business Capacity of the Inventor—Inventions as a Poor Man's Opportunity to Advance
13-19 CHAPTER III. SECURING CAPITAL.Danger in an Undivided Interest—A Better Plan—Form of Agreement—Perfecting Inventions—Exhibit of Inventions—To Avoid Being "Squeezed"—Value of Record of Invention—Newspaper Notoriety
20-29 CHAPTER IV. HOW TO ARRIVE AT THE VALUE OF A PATENT.Pecuniary Value—Commercial Value—Basis for Estimation—General Rules for Valuation—How Rating for Royalty Is Figured—Stock in Stock Companies—Prices for Territorial Rights—Valuation Tables
30-40 p. 6 CHAPTER V. HOW TO CONDUCT THE SALE OF PATENTS.Patent-selling Agencies—The Best Selling Agent—In Case the Patentee Cannot Undertake the Selling—Methods of Selling Patents—About Advertising—How to Write an Advertisement—Correspondence as a Means of Bringing Patents before Interested Parties—How to Correspond with Manufacturers—Circulars—Illustrations—About Getting up
Value of Personal Influence—Personal Solicitation Advisable—Selling Outright—Assigning an Undivided Interest—Dividing a Patent into Different Classes of Rights—Granting Licenses—Placing upon Royalty—Manufacturing and Forming Companies—To Organize Stock Companies—Trading as a Last Resort
55-72 CHAPTER VII. CANADIAN PATENTS.About Canadian Patents—Selling Canadian Patents— Population of Canadian Cities
73-78 p. 7 CHAPTER VIII. DECISIONS AND NOTES.Assignments—Territorial Grants—Licenses—Patent Title—Rules of Practice—Assignments—Assignees— Grantees—Mortgages—Licensees—Must be Recorded— Conditional Assignments—State Laws on Selling Patents
79-91 CHAPTER IX. THE TRANSFER OF PATENT RIGHTS.Assignee, Grantee, and Licensee Defined—The Language of Law—Assignment of Entire Interest in Letters Patent—Assignment of an Undivided Interest—Grant of a Territorial Interest—License; Shop Right—License; Non-exclusive, with Royalty—License; Exclusive, with Royalty
92-105 CHAPTER X. TABLES AND STATISTICS.Map of the United States—Official Census of the United States by Counties for 1910—Population of Cities of the United States—Number, Acreage and Value of Farms, by States—Table of Occupations
106-141Index
142-146p. 8
p. 9
PRACTICAL
POINTERS for PATENTEES
CHAPTER I
DEMAND FOR INVENTIONS OF MERIT
That there is a demand for inventions of merit which can be readily disposed of at a reasonable profit to the inventor, there can be no doubt. There perhaps never was a time in the history of our country when the demand for meritorious inventions was so great as the present. The conveniences of mankind, in all his varied vocations and callings, require continual changes and improvements in the apparatuses and implements used in order to save time, labor, and expense, and to keep pace with the never-ceasing progress of civilization.
At no time in the past has there been so deep an interest manifested by the public generally in the inventions of our bright-minded men and women, and at no time has capital been more readily interested and ready to invest in anyp. 10 practical improvement which can offer a fair chance of monopoly under the patent laws.
Business men, capitalists, and manufacturers are ever on the alert for new and desirable inventions, which will supersede in utility those which are already on the market. By purchasing such inventions, they secure novelties which will not only enable them to avoid the keen competition and to a great extent monopolize the trade in their own respective lines of business, but also to make sales more easily, and thus make their business more profitable.
Every well-informed person knows that a monopoly is the desideratum of business men. The monopoly or protection of an industry afforded by the patent laws is, perhaps, the one monopoly that directly benefits the world. Were it not for the protection and monopoly offered inventors by governments, for a certain number of years, to disclose their inventions, inventors would simply keep them secret, or if used at all, would do so only in such a manner as would prevent the world at large from learning of or utilizing them, thus debarring the public as a whole from their benefits. This monopoly in patents has had much to do with the material progress of the world during the century just ended.
Anyone having a monopoly of a good trade article is assured of a fortune. If capitalists andp. 11 manufacturers can secure the control of any new invention of merit for their sole use and purposes, which can be manufactured and sold more cheaply than those now on the market, and which will perform its work in a quicker and better manner than the devices now in use, they will be only too willing to pay patentees handsomely for patents covering such inventions.
There are numerous staple articles of commerce whose manufacture is open to all, and which every mercantile house in the country is handling at a profit, notwithstanding the great number engaged in their manufacture and sale in every section of the country. Now, if there can be supplied some better or cheaper article in any line of industry, the firm or person who secures the monopoly of its manufacture and sale, simply controls the market, and human endurance and energy are the only limits to the degree of profits such a firm or person can secure from the manufacture and sale of such an article, if adequately protected by a valid patent.
In an official report the Commissioner of Patents clearly sets forth that from six to seven eighths of the entire manufacturing capital of the United States is either directly or
The largest and most opulent manufacturers in the country will be found to be the heaviest owners of patents, developers of inventions, and patrons of the Patent Office. While all inventions are not telegraphs, telephones, sewing-machines, or electric lights; nor can all business houses be Westinghouses, Hoes, McCormicks, Bells, or Edisons, yet all over this country, and others as well, there are springing up a great number of moderately large growing firms who, ever on the alert for success, devise or secure control of some valuable patent, by which they can successfully invade and control to a certain extent particular lines of industry.
Nearly every leading factory in the world owes its commencement and success to the prestige and protection afforded by the possession of a good and valid patent.
p. 13
CHAPTER II
INCOME FROM INVENTIONS
It has been aptly said that the products of all the gold, silver, and diamond mines in the world would not equal in value the annual income of American inventors. It has been carefully estimated that there are at least fifty patents in the United States which yield over $1,000,000 annually, some 300 that yield over one-half million, from 500 to 800 which bring from $250,000 to $500,000, and between 15,000 and 20,000 that bring over $100,000 annuities. Besides these, there are thousands upon thousands of patents which yield yearly more profit to their fortunate possessors than could be accumulated in a lifetime by a wage-earner.
There are thousands of patents sold outright every year by the patentees of the United States for thousands of dollars; and, to the already long list of successful inventors, each year adds many more, who have become independent through the proper handling of the product of their ingenuity. Indeed there can hardly be conceived a quicker way for the average person to attain independence andp. 14 wealth than by inventing something of real worth and merit that can be quickly turned into money. The inventive field is large, and each invention opens up a new field for improvements, and it is the "improver," without question, that reaps the greatest benefit from any invention. Owing to the ever forward progress of civilization, there is no limit to the possible improvements in the sciences, arts, and manufactures.
It must, however, be borne in mind that all patents are not remunerative, neither are all gold mines productive of fortunes, and one may lose money in patents as well as in any other business. There are thousands of patents, many having merit no doubt, which have never been sufficiently brought before the public to test their merits, effect their sale, or manufacture; this in many instances is owing to incompetency, or bad management on the part of the patentee or his agents. There are thousands of other patents that do not prove remunerative because they do not supply a real want, while still others are such slight improvements upon existing inventions that they necessitate such narrow claims, which render the patent of little or no value. One has only to look over the weekly issue of patents to see many of the last class.
As before stated, while there are many thousands of patents that do not pay—and many nop. 15 doubt cause their owners disaster, as is the case in any other business or investment; on the other hand, the far greater proportion of patents granted are productive of handsome profits, if properly managed.
That the majority of patents taken out prove lucrative is evident from the fact that upward of seventy thousand applications for patents and designs are filed each year in the United States Patent Office, and approximately eight hundred are granted and issued each week. Probably about one-fifth of these patentees obtain their patents with a definite view of manufacturing their inventions, and the remainder obtain theirs with a view of realizing from the sale of the rights to manufacture.
It may be said, as a general thing, there is more money in small inventions than in larger ones, from the fact that they can be easily manufactured anywhere with but little outlay of capital; they usually fill a general need, and the profit derived from their manufacture is large, besides the patent is more readily disposed of; while with larger inventions it requires more money and ability in handling the patent, and the invention must be unusually promising to justify the erection of a plant costing thousands of dollars for its manufacture. However, when large and complicated inventions do pay, they usually pay well.p. 16
It must be remembered that the actual cash value of a patent is not in the patent itself, but in the sale or use of the monopoly it affords, and the amount realized from any invention frequently depends upon the business capacity of the inventor or his agents. Owing to his business ability, one person may make a fortune out of an unpromising improvement, while another, through bad or careless management, will realize little or nothing from a brilliant invention.
Speaking along this line in an official report the chief examiner of the Patent Office says: "A patent, if it is worth anything, when properly managed, is worth and can easily be sold for from $1,000 to $50,000. These remarks only apply to patents of ordinary or minor value. They do not include such as the telegraph, the planing machine, and the rubber patents, which are worth millions each. A few cases of the first kind will better illustrate my meaning:
"A man obtained a patent for a slight improvement in straw cutters, took a model of his invention through the Western States, and after a tour of eight months returned with $40,000 in cash or its equivalent.
"Another inventor in about fifteen months made sales that brought him $60,000, his invention being a machine to thrash and clean grain.p. 17 A third obtained a patent for a printing ink, and refused $50,000, and finally sold it for about $60,000.
"These are ordinary cases of minor inventions embracing no very considerable inventive powers and of which hundreds go out from the Patent Office every year. Experience shows that the most profitable patents are those which contain very little real invention, and are to a superficial observer of little value."
Under the writer's personal observation has come many instances where inventors have secured patents on improvements which to a casual observer would appear insignificant, yet through shrewd management they have been made to yield princely incomes. Among these one case worthy of note is that of a young man in Pennsylvania who secured a patent on a toy game which any person could have thought of, but few would have considered worth protecting by letters patent. He was offered $1,000 for the patent by one manufacturer at the outset which he refused, and afterward he placed it on royalty with quite a number of large manufacturers throughout the country. He receives but one cent on each one manufactured, yet his income averages over $12,000 a year. Another borrowed part of the money with which to obtain a patent on a railway tie plate, which was bought by
Patentees who would realize any considerable amount from their patents must not sit down and expect the other fellow to make money out of their inventions for them.
Invention is sometimes called the "genius of the poor," and it is a singular fact that there are a greater number of inventions made by men and women of limited means than by those whose wealth, education, and other advantages would seem to have especially fitted them for success in a field dominated so completely by "brains." This may be explained in a measure by the fact that people of moderate means are brought into closer contact with the arts and manufactures, and are thus the first to discover and improve their defects.
A self-made millionaire, recently speaking to the writer about patents, said: "I know of no business or vocation requiring so small amount of capital, and yielding such immense profits as that of invention. Certainly no person of inventive genius can employ his time and ingenuity to betterp. 19 or more profitable advantage than to invent something that is really needed. Many poor men, through the art of invention, have risen from poverty to reputation, fame, and honor, and taken high places among noted men of all times.
Our moneyed kings may have enriched themselves by stock jobbing, but this precarious procedure requires large capital, and the few enormous fortunes accumulated are merely the monuments marking the graves of thousands of foolhardy unfortunates caught in the vortex of speculation."
p. 20
CHAPTER III
SECURING CAPITAL
It is a curious but well demonstrated fact that people who have inventive genius often lack the means to carry out their ideas. An inventor who has ample means can secure his patent and proceed to turn it into money without the necessity of being compelled to solicit financial aid from anyone. This, unfortunately, is not generally the case with inventors; indeed, many are often barely able to stand the expense incident to taking out the patent. Patentees laboring under this disadvantage are frequently tempted to part with a small interest in their patents for the sake of securing sufficient funds to carry on the promotion of their inventions and sale of the patent; and in doing this the inexperienced patentee is apt to make the fatal mistake of assigning to another an undivided interest in his invention.
Such an assignment may appear well enough on the face of it, and many patentees have been misled, supposing that under the assignment the proceeds from the patent should be divided pro rata, according to the several interests. This, however, is notp. 21 the case in such assignments, and joint-ownership of a patent, or interest therein, does not of itself, without an express agreement to that effect, make the parties partners. They are merely tenants in common, each having the right to separately make, use, or sell the invention so assigned without liability to account to their co-owners for any part of the profits derived from the invention through their own efforts.
In an assignment of an undivided interest, the assignee is afforded an opportunity of manufacturing, using, and selling to others to be used the article covered by the patent; also, to grant territorial grants, such rights being unlimited by the terms of the assignment, and it is actually of little consequence how small an interest is thus conveyed, the assignee can proceed with the patent in much the same way as if he were the sole owner; therefore, whenever it is intended that the relation of co-partnership shall exist between the patentee and the assignee of an undivided interest, and that the profits arising from the invention shall be equitable, for their joint benefit, there must be an express agreement between them to that effect, otherwise the assignee will have a decided advantage over the inventor, if he is inclined to be dishonorable, and there are numerous cases on record where patentees have virtually lost their patents by such assignments. Patentees shouldp. 22 especially guard against strangers who offer to purchase an undivided interest in their patents.
A better procedure to secure means necessary for the development, introduction, and sale of an invention is to borrow the money from a friend contingent on the sale of the patent, sell a State or county right, or enter into a contract with a party willing to furnish the means for a certain proportion of the proceeds derived from the invention. Generally speaking, it will not be hard to find a party willing to advance sufficient means to promote an invention which is protected by a patent for a certain percentage of the net receipts arising from its manufacture, sale, or territorial grants, and the patentee will probably find a person among his own acquaintances who will not only be glad to furnish the means necessary, but also be of value to the patentee in realizing from his invention. In any case, whatever is agreed upon should be put in the form of a contract, or an agreement, couched in such terms as will leave no doubt as to the understanding between the parties. The following form secures both parties, and will be suggestive of others:
Whereas I, Richard Doe, of Philadelphia, County of Philadelphia, and State of Pennsylvania, have invented certain new and useful improvements inp. 23 Telegraph Keys, for which I have obtained Letters Patent of the United States, bearing date January 1, 1901, and number 000,000, and whereas John Roe, of Camden, County of Camden, and State of New Jersey, is desirous of obtaining an interest in the net profits arising from the sale or working of the said invention covered by the said Letters Patent.
Now, therefore, this indenture witnesseth, that for and in consideration of one dollar by each of the parties hereto paid to the other, the receipt of which is hereby acknowledged, it is stipulated and agreed as follows:
First, That the said John Roe shall pay all moneys necessary to the construction of a suitable model to represent the said invention; that he shall pay all necessary expense in advertising and bringing said invention before interested parties (and such other clauses as may be deemed necessary and agreed upon, such as the expense of constructing a working model, or carrying out a process, etc.); that he shall make diligent effort to promote the said invention, its manufacture, and sale.
Second, That the said Richard Doe, sole owner of said invention and Letters Patent, in consideration of the payment of the moneys above mentioned, agrees to pay the said John Roe twenty-five per cent. (or other amount agreed upon) ofp. 24 all the net receipts in any manner arising from the sale or working of the said Letters Patent, during the term for which said patent is granted.
Witness our hands and seals this tenth day of January, A.D. 1901.
Richard Doe,
John Roe.
In the presence of:
John Smith,
Thos. Jones.
Should an inventor defer the
The safest course for an inventor is to file his application for a patent as soon as his invention is complete in its principal features, so as to conform to the requirement of the Patent Law that an invention be sufficiently complete to be theoretically operative. The mechanical details are rarely of great importance as far as the patentable feap. 25tures of the invention are concerned. Still, it is well to give the attorney full particulars of whatever details the inventor has in mind.
Under the security thus afforded for the main features involved in his idea, the inventor can proceed more deliberately in perfecting and improving his invention, and can then file an additional application if necessary, to secure special protection on particular improvements or the improved invention as a whole. The early filing of an application may turn out to be important in securing to the inventor his right of priority. When the inventor comes to exhibit his invention, with the idea of bringing it to the attention of the public in general, there is no question that he should then have his invention in the best form he can, and in as attractive shape as possible.
The patentee who proposes to realize from his invention should never let it be known that he is in want; of course, in some cases he cannot help himself, but he should endeavor to obtain the necessary assistance from his acquaintances, and under no circumstances let those with whom he is trying to deal get an insight into his financial condition, as capitalists and others will very often take the advantage of an inventor when known to be in straitened circumstances, and the patentee probably wouldp. 26 not realize as much from his patent as he otherwise could. Therefore, it is advisable in all cases for the patentee to manifest no impatience, remain silent as to his financial condition, and strive to impress those with whom he is dealing that he is in no condition to be "squeezed."
Inventors, while working on a complicated machine, should not overlook the value and importance of keeping a record of the progress of the development, illustrating it with sketches, signing and dating them with each new addition, and, when practical, having it witnessed by one or more persons. This plan is preferred by many inventors to filing a caveat. Such a record will be found very valuable in case of an infringement, as it enables the inventor to ascertain the various steps of his invention, and is a sort of evidence that cannot be impeached. Such a record of a complicated invention, when the inventor has put much time and study upon the subject in perfecting it, will also be found valuable in effecting sales, and in fixing the price of the patent.
It cannot be denied that at the present time there seems to be in many sections of the country a strong prejudice against patents, which sometimes makes it difficult to get people sufficiently interested to take hold of any patent; especially is this truep. 27 when the patentee endeavors to sell his patent piecemeal; that is, by county, township, shop, or farm rights. No matter how important or valuable the invention may be, there seems to be a disposition on the part of the public to look upon such rights as a fraud, and to be very cautious how they invest in them.
The public is not wholly to blame for this, as in recent years there has been a class of men who have canvassed the country with patent rights, not caring what representations they made so long as they were able to effect a sale; consequently, many people have been lured into purchasing patent rights for a small territory which in many instances were worthless or not as represented, causing them to be more or less skeptical of all patents, as well as to bring this manner of selling patents generally into ill repute. With manufacturers and capitalists, this prejudice does not exist to any great extent, as with them the patent rests solely upon its own merits.
Many inventors overlook the importance of interesting newspaper men in their inventions. This is a matter of great consequence to the inventor in exploiting his invention, and should be given some attention. Newspapers desire items of interest of every description, and readers are usually interested in brief accounts of any new invention possessingp. 28 novelty or merit; so that when the inventor once gets his invention into the newspapers it is generally copied by other papers, with the result that the invention gets a large amount of free advertising and publicity. These items frequently attract the attention of capitalists, manufacturers, and others, and at once put the invention in a favorable position before the public as could be done possibly in no other way—certainly in no cheaper way.
Many of the trade journals and other periodicals are also open to receive technical descriptions of inventions of merit concerning industrial improvements. Such articles should be written in good form, containing not over five hundred or a thousand words, and if admitted to this class of publications will be of the utmost value and importance in creating favorable public opinion, and in advancing the inventor's interests.
With hardly an exception, if an invention strikes editors favorably and is adjudged to be of sufficient interest to form an article of news in newspapers, or of sufficient merit to warrant a description in the trade papers, it is pretty certain to prove a success and bring the inventor large returns.
If the invention is of such a character as to strike newspaper men unfavorably, the inventor can resort to the advertisement columns; usingp. 29 the large daily papers, or such publications which in some way relate to the industry to which the patent appertains, and such as have the largest circulation among the class of people it is desired to reach. See about advertising on page 46.
p. 30
CHAPTER IV
HOW TO ARRIVE AT THE VALUE OF A PATENT
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.
It may seem superfluous to say that mere Letters Patent aside from an invention is of no value, though many inventors are under the
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 improvep. 32ment 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.
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 willp. 33 require the greater bulk of the profits to be derived from it.
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.
This method of procedure not only enables the patentee to get a just valuation of his patent, but also puts it in a more favorable position to be sold; since the commercial value is known and established, it no longer remains an experiment. Interested parties can take their calculations from these figures, and the patentee can exact a price in proportion to the success of the trial experiment.p. 34
In order to thus demonstrate the value of a patent, the patentee must possess and advance the necessary means to carry it forward, though, if the experiment prove at all successful, the profits derived from the articles sold will in nearly all cases more than offset the expense incurred. This is a very popular course with inventors, especially in handling small inventions, known as novelty or specialty patents.
If the patentee have not the means to successfully demonstrate the value of his patent by actual trial, as above outlined, then the next best course would be to inquire among reliable manufacturers and ascertain the lowest price for which the invention can be manufactured in large quantities, and the highest price at which it will retail; and then, by carefully studying the market, the patentee should be able to estimate the amount of competition, cost of selling, probable number of sales, interest on the investment, etc., and on these figures base the price he should receive for the patent, being careful to allow the purchaser a liberally fair profit.
While there are at present about ninety-five million inhabitants in the United States, it is scarcely probable that any invention has yet or ever will be made that will reach half this number of people. With an article of the most general adaptability, including both sexes, the inventorp. 35 can hardly hope to reach more than a fourth of the entire population, though, of course, the invention may be subject to regular consumption, so that the people reached would naturally purchase the article again a number of times during the course of a year.
The statistics in the last chapter are given with the view of assisting patentees in determining what proportion of the population will likely want their inventions, and to enable them to estimate prices. In estimating the price to ask for a patent, patentees should not conceive and hang their hopes upon fabulous prices and immediate wealth, which too often dooms ambitious inventors to bitter disappointment; they should rather endeavor to look at their inventions from the purchaser's stand-point, and try to see it in the light in which others view it. It may be well to remember that the million mark of patents issued in the United States, including re-issues and designs, was passed in 1911, and it is quite probable that any one inventor may not have the only good thing in the line of patents.