This is Part 3 of our ‘Basics of IP’ blog series on the history of patents. You can find Part 1 and Part 2 here. The following has been adapted from “A Patent System For Everyone”, a Michelson IP animated short.
What makes America’s patent law history unique
Few people realize just how unique the American patent system truly is. All earlier patent systems in the world reinforced the wealth of elites, not the welfare and productive capacity of the whole of society. In 18th century Britain, for example, patent application fees were more than 11 times the per capita income of the average citizen. As a result, this restricted innovation to a small sector of the population.
The Founding Fathers, on the other hand, wanted to stimulate the rapid growth of America’s nascent economy, which was then totally lacking in major industry and dependent on imports. Thus, they consciously designed a patent system that would do what none had done before — stimulate the inventive genius and entrepreneurial energy of the common man.
This patent system had four unique features:
1) First, it was cheap. The first patent law in 1790 set patent fees to a level any ordinary citizen could afford —less than 5 percent of the rate in Britain. This was meant to ensure that all citizens could participate in the developing industrial revolution, and it worked. 70 percent of America’s “great inventors” never went beyond high school. Even some of our most famous inventors, such as Thomas Edison, dropped out of school to support their families. But they could afford a patent.
2) Second, application procedures were simplified. In Britain, applicants had to get approval from seven different offices, and then get the signature of the King — twice! In contrast, in the U.S., you only needed the approval of a single patent office. And you could mail in your application postage free.
3) Third, America created the world’s first examination system to ensure the novelty, non-obviousness, and utility of patents. This reduced uncertainty about the validity of patents, and helped attract investors to fund new startup businesses based on the new inventions.
4) Fourth, our system prohibited “working requirements”, meaning that you didn’t have to own a factory and produce or sell products to get a patent. It also facilitated the sale or licensing of patent rights, so you could earn a living as a full-time inventor rather than a manufacturer. Ordinary citizens without great wealth or resources, such as Thomas Edison and Elias Howe, could do the inventing and then license their patent rights to large companies to do the manufacturing.
These four features of the U.S. patent system greatly expanded the number of inventors in the U.S. They led to a dramatic surge in innovation not seen anywhere in the world before.
America’s patent-invention growth
By 1865, America’s per capita patenting rate was triple that of Britain’s. By 1885, it was quadruple that of Britain’s. Americans then patented five times as many inventions each year as the British. This happened even with our populations being the same size.
The result? America’s patent system helped create the most successful economy on earth. It shaped our culture as well. Eli Whitney and Robert Fulton became national heroes. For the first time in history, a nation came to see its greatness in its capacity for technological progress.
The Founding Fathers would not be surprised by this. They designed the world’s first democratized patent system, precisely because they believed in the ingenuity of the common citizen. Only under America’s patent system could a working class kid named Thomas Edison with barely three months of schooling become a storied inventor and change the world.
For more in-depth information on the history of patents, check out the free online course Intellectual Property: Inventors, Entrepreneurs, Creators.
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The Michelson Institute for Intellectual Property, an initiative of the Michelson 20MM Foundation, provides access to empowering IP education for budding inventors and entrepreneurs. Michelson 20MM was founded thanks to the generous support of renowned spinal surgeon Dr. Gary K. Michelson and Alya Michelson. To learn more, visit 20mm.org.