United States. Congress. Senate. Committee on Pate.

Arguments before the Committee on Patents of the Senate and House of Representatives, in support of, and suggesting amendments to, the bills (S. no. 300 and H. R. 1612) to amend the statutes in relation to Patents, and for other purposes .. online

. (page 40 of 71)
Online LibraryUnited States. Congress. Senate. Committee on PateArguments before the Committee on Patents of the Senate and House of Representatives, in support of, and suggesting amendments to, the bills (S. no. 300 and H. R. 1612) to amend the statutes in relation to Patents, and for other purposes .. → online text (page 40 of 71)
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250 MR. G, H. CHRISTY.

tbese rakes so poorly in respect to mechanical workmanship, using
green wood for wheels, that they were all returned to him, and,
as a matter of fact, he did not make anything. I had to settle the
suit the best way I could, and my client got little or nothing. In
that case the rule of license-fee could apply ; but now I submit a case
in which the rule of license-fee would not apply. I presume the com-
mittee have noticed the quality of sheet-iron used for locomotive jack-
ets — a dark-blue sheet-metal. That metal is made by a client of mine,
who is the only manufacturer of it in the United States. He and his
father, and grandfather before them, have been in that business now for
over half a century. They have built up the business and made it pay
by putting into it their own capital — the best years of their lives ; and
a fourth descendant is coming onto the stand. They have put into it
the best work of their brains, and have got an article of sheet iron which
is superior to any sheet-iron in the world, and vastly better than the best
Eussian sheet-iron. Now. he has a manufactory established which is
able to supply the entire demand. Suppose this bill passes, and under
it it shall be held that a reasonable license-fee shall be the measure of
recovery. His neighbor says, as I am only responsible for that reason-
able license-fee, which will run about so much a pound, I will pot my
money into that business; I will go into that trade and undersell the
business, and I will crush him, and account to him for a cent or two or
three cents a pound on what I make, instead of 20 per cent, profit which
my friend spoke of as being a fair manufacturing profit on reaping-ma-
chine manufacture. Now, there is a case of gross, rank injustice, which
this law would authorize by virtue of abolishing the rules of damages
€x delicto^ and allowing them a license-fee to measure the injury done
after a long operation in taking testimony.

My brother Eaymond has made, I think, some very rash statements,
and I only wish I had time to follow them all. He has done it not
through any intention, but through failure or forgetfUlness to weigh
words. The committee will remember that on one point he claimed that
the action for infringement was only in the most remote degree an action
technically ex delicto^ and also that the issue of a patent by the govern-
ment and the public is not one ex contractu^ but merely a gratuitous
grant; and thus he argues that the injury done is one in the nature of
an act ex delicto. I call attention to the inconsistency of the entire argu-
ment, where in one case he claims it is an action ex delicto^ and that in
another case it is ex contractu.

I wish to state one word on the cotton-worm question. That worm
was hatched up before the Senate. I am surprised that as much weight
has been attached to it as has. The argument that a man who has in-
vented a compound of Paris green and flour is therefore entitled to all
the benefits of the cotton crop which results from the killing of the cot-
ton-worm, is the most absurd theory I ever heard in connection with a
patent law. Suppose I should patent a remedy which was a sure cure
for cholera infantum; on the same plan I could say every child has got
to account to me for the value of its life during the ordinary term of
human existence. I would not like any softer thing than that. The
measure of the damages resulting from the killing of the cotton-worm
must be simply the gain or profit on the sale of the mixture, or a reason-
able license-fee. The effects derived firom it do not come from the Paris
green and the flour ; they come from the wind and the weather and the
sun. You kill the worm ; there is the end of the invention. Whether
or not you get a good crop depends on the wind and weather, for they



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''INNOCENT PURCHASERS." 251

are alone the sole cause« and to charge the results to the remedial agency
of the compound is absurd.

When a case was called for and our friend responded with the Tanner-
brake case, it is sufficient to say that that was a mechanical and not a
chemical device. A question of mechanics involves the using of ma-
chinery, and every time that machinery runs it is an infringement. You
use your medical remedy once, and that is the end of it. The profit or
gain in reference to chemical mixtures — Paris green and flour— ends
when you have made the mixture and sold it In reply to the question
raised by one of the committee, in reference to a purchaser in a drug-
store, I will say that if the compound is made by the patentee and put
on sale, the right of the patentee has gone when the sale is established;
the sale carries with it a license to use. But I apprehend the question
arises in a case of this kind : where the cotton-grower goes to the drug-
store and buys his Paris green, and then goes to his flour-barrel and
mixes it and puts it on the crop. The only liability of the party then is
for the gains and profits he has made by the mixing, or a reasonable
license on the mixture, ^ow, in answer to the query, I say I do not
think that question has ever been passed upon in any court, and the
Tanner-brake case is not a similar one.

Mr. Aiken. You know that there is a great monopoly in cotton-ties —
the iron bands used by the manufacturers of cotton in baling their
goods, and also in baling the raw cotton. Now, you also know that
there are a great many methods of tying this band, all of which are
claimed to be infringements of what is known as the ^'English arrow ^
tie. Suppose, as a private individual and planter, I am using one
of the other devices, am I responsible for damages to the cotton-tie
company 1

Mr. Christy. I suppose yon are.

Mr. Aiken. Even though I buy that tie from the manufacturer him-
self, who publishes to the world that he manufactures it?

Mr. Christy. If you purchase from any person who is authorized to
make it by the owners of the patents

Mr. Aiken. Suppose I know a man in Pittsburgh, or in some other
city, who makes a tie, and I go to Pittsburgh and buy this tie in the
stores or on the market, the representative of the English Arrow Cot-
ton-tie Company follows me to my farm and sees me using it, am I lia-
ble to him tor an infringement? Remember, I have bought from this
manufacturer in Pittsburgh, who has advertised that he is manufacturing
these ties.

Mr. Christy. As the law stands you are, and that is what the Baker
bill is intended to correct. That is one of the principal objections some-
times alleged to the patent law as it now exists. You are put, by vir-
tue of this, on your guard, in reference to where and of whom you shall
buy your ties ; and you are required, as all men are required, to look to
the article you purchase, just as you are in other matters. Yon go to a
horse-broker to buy a horse, and you are expected to use caution to find
out whether the man has a right to sell it. Supposing a stranger comes
along and says, ^^ I have got a good horse here, worth $150, which I
will sell for $75," the presumption or suspicion will at least arise in that
case that the man did not come honestly by that horse.

Mr. Aiken. Suppose he asks $150; he wants to get the money that
the horse is worth ; there is no means of determining, in the first case,
except by the offer below market price.

Mr. Christy. I can only say the vendee must look out for his title,
and as to the right of the party from whom he purchases, the same as



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252 MR. G. U. CUBI8TT.

in real estate. You have got to make sure in real estate that tbe ven-
dor has a good title to transfer to yoa, and the same rnle prevails in
patents. You are pot on yoar gnard In that respect.

Mr. TowNSHEND. It would be impossible for a man to discover whether
the vendor of a title was entitled to sell it. How can he ever ascertain,
by any record Miy where, that the person has a lioeuse f

Mr. Christy. It is one of the necessary evils of the system.

Mr. TowNSHBND. It is one, however, that cannot be possibly avoided
by an innocent purchaser.

Mr. Christy. I do not know that. I may say in reference, for in-
stance, to reaping machines, that the way for the farmer to protect him-
self is by purchasing from responsible parties. He is technically liable
for infringement for the use of that machine, and every time he uses it
he commits a new act of infringement ; but the cautions farmer will
look well to the party from whom he purchases. If he purchases a Mc-
Cormick,or a Marsh, or a Wood mowing-machine, he knows that, on
ordinary business principles, the maker will protect him. I know a
party in Ohio who brought two hundred suirs against the users of a
harpoon hay -fork, used to hoist oil* a load of hay and dump it into a
hay-mow. He did it to compel the manufacturer to go there and defend
the suits, which the manufacturer did. The farmer was not hurt a dol-
lar. It was simply a little sharp practice, in order to get the infringing
manufacturer away from the forum where he lived, and where he wanted
the cases to be tried, and compelling him to go where the patentee lived ;
and the suits were brought simply to put the manufacturer in such a
position that he had to defend his interest. The same applies in refer-
ence to this cotton-tie question ; and I may say here that in three suits
I am retained against the American Cotton-tie Company. It is for tbe
interest of the parties in Pittsburgh from whom jou purchased — and I
presume they are my clients, though I don't know whether you were
referring to any particular case or not — ^it is for their interest to protect
you, because if they don't you tell your next neighbor, " I can't bqy that
tie, because I was sued f but if the party from wliom you purchased
comes forward and defends that suit, and the fact is known that you
will be protected, why you have no hesitancy in purchasing, and the
suits don't hurt you. And this is almost always the result, and is in-
tended to be the result, when individual users are sued. The suits
against single users alone wouldn't pay the patentee.

Now, a word on this reaper question. The figures that Mr. Raymond
gave were that the machine coats $40 ; that after allowing a manufac-
turer's profit, amounting to twenty per cent., he sold'it for $I5(h Take
off one-fifth from these as the manufacturer's profit, and that is only the
beginning. Brother Eaymond forgot to tell 119, or the reaper men forgot
to tell him^ that there is an additional profit that has to go to the re-
tailer of that machine, who sells it to the farmer — the middleman. Yon
take off, then, twenty-five or thirty-three per cent, more from that. Now,
take off the losses from bad debts.

Mr. Raymond. Tbe prices he gave me were the prices of the manu-
facturers to the middlemen. The figures I get are from representatives
of the company, from the machine company, and they are large manu-
facturers in Northern Illinois, at whose request Mr. Lathrop introduced
his bill to make the limitation short, and to repeal this profit and sav-
ings principle entirely.

Mr. Christy. The Marsh Harvester Company you refer to. I know
them perfectly well ; they are clients of mine, and I know those figures
are not true. I fought against the extension of those patents, and tried



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ROYALTIES ON REAPERS. 253

to show how large license-feeH they had received, and it was only a small
fraction of what you name. I have since been counsel for the patents,
and I know from personal knowledge that he did not state the facts cor-
rectly, or else you did not understand him correctly. One great allow-
ance of the profit is a large sum which has to be paid out in insurance,
transportation, and bad debts ; and there is one villianous part of this
business: they take notes — McOormick has got a safe full of them — with
mortgages to secure the debt ; and the costs of collecting, and various
other things of that kind, and the carrying all your sales for three years
in these long notes, bearing very little interest, and then taking out
your 440 cost (they cost more, I am sure), and you have not a very large
margin left for royalties for machines. I simply want to present this to
show that this royalty is nothing like what Mr. Kaymond would en-
deavor to make it appear.

Another rash statement is, that the value of a patented device results
from the infringement of it. That is very much like the old theory of
doing wrong that good may come of it. The reverse is true : the value
of a device depends upon the honest use of it, the lawful use of it, and
there is do patentee from one end of the land to the other, unlet^s he is
a speculator, who wants his patent to go into use by infringement; but
he wants that the parties who desire to make use of it shall come to him
and pay a lawful price.

A number of other statements were made, that I have not time to re-
fer to. I wanted, also, to refer to other sections which I consider cither
good, bad, or indifferent; but I only propose to refer to those which I
consider positively bad ; and my opinions upon the others are divided
between the good and indifferent

The provision for taxing patents is one which meets my highest ap-
probation, and I sincerely hope it will be reported, as the result will be
undoubtedly to remedy a large portion of the evils which brother Ray-
mond has set forth, such as si)eculations in patents, &c.

Again, after a patent has got established and become successful, it is
a common thing to hunt up similar prior issues, purchase the patents,
and, under the facilities afforded by law, on reissues obtain a reissued
patent, covering what somebody else has invented, and then sue the
real inventor. This will wipe out at least seventy-five per cent, of that
class, and then we will have a great deal less trouble from that law.

I turn to sections 8, 9, and 10, and will refer to them, premising, how-
ever, under the law as it now stands, that we have but one remedy, and
that is at suit for infringement at law or by bill in equity. This bill, as
I understand, proposes now to provide for three remedies in the hands
of the infringer ; and I think my brother Raymond remarked in the
Senate committee that this was a bill in the interests of infringers. In
the first place the law makes provision in section 8 for testimony, that
a party or a number of parties — for instance, the association of rail-
roads which my brother Raymond represents — ^may associate together,
and by certain proceedings in court lay up testimony to be used at some
future time.

In the second place, by section 9, they may file a bill in the circuit
court in order to repeal the patent, abolish it, wipe it out of existence.

In the third place, if they do not wish to resort to either of these
remedies, they may go into court in case of the patentee's threatening
to bring suit, and require him to proceed in an action of infringement.

Kow, it is a very rare thing to put three remedies in the hand of oxi^
man, and that man presumably the wrong-doer. I submit, now, that sec-



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254 MB. G. H. CHRISTY.

tioDs 9 and 10 ^ve abundant remedy, and that section 8 gives a remedy
that is very dangerous.

Section 9 I approve of fully. In case it appears that a patent is un-
justly granted, or that it is informal, the parties may proceed under that
section in equity and wipe it out of existence.

I have no particular objection to section 10, though I think it is need-
less. That is one under which the patentee or owner of the patent may
be required to proceed by suit. I think two remedies certainly are
enough, or ought to be enough, for one wrong. But now these parties
come here represented by their attorney, and want an additional pro-
vision for testimony. I think the statement made yesterday was wise
and sufficient^ that the law at present gives sufficient remedy. I think,
further, that it is a dangerous remedy to put into the hands of a wrong-
doer, particularly if he is a wealthy party or corporation, and I use the
word corporation not in any ill sense, for it is one of the most honest
and legitimate ways of carrying on business ; but it is specially danger-
ous to give the power to seventy or eighty wealthy corporations to
pounce down on an inventor and snatch from him all his just rights, as
was the case with GhK>dyear, and reduce him to absolute beggary ; and
as was the case with Pullman when he was jacking up houses in Chi-
cago; or as with Westinghaus, who was not able to pay me his first
fee for his first caveat. Now, if it is good to put in the hands of an
associated power representing such a consolidated amount of wealth,
and with the unscrupulous character for which railroads are noted (I
speak of it only as an entity, and not in regard to its officers)— I say it
is a very dangerous thing to put such a grant of power into the hands
of such an organization, in order that they may sit down on and
squelch an inventor without any money to fight them.

There is another way in which they may squelch him by virtue of sec-
tion 8. Suppose the bill passes in its present form. A patent is issued
which I should like to kill on sight. It don't make any difference why.
I serve notice to take testimony, and begin by calling the patentee on
the witness-stand and asking him, ^^ When did you make this inven-
tion?" I interrogate him by a vigorous examination — and any lawyer
knows how to conduct one who has had any experience of that kind — in
reference to the very foundation of the grant of his rights, when he is
off his guard, when he has not his papers to protect himself as against
nie, and when I am trying to get the worst record against him I can. I
put him on record as to the date of his invention. I do it when he has
not an opportunity to put his best record in shape. Having established
the record against him as to the date of his invention, I proceed now
to antedate him.

Mr. Ward. Does not the section provide that he shall receive due
notice f

Mr. Ghbisty. No, I am not bound to give him notice of what ques-
tion I am going to ask him on the line of ray investigation. I will
take him off his guard and make him answer these questions. Now,
then, if I have got seventy or eighty railroad companies at the back of
me with their capital and their employes, it is a very singular circum-
stance if I cannot cook up some testimony among them. I do not say
that brother Kaymond would, but I do not know who his successor
might be. Now, what do I do with this testimony? I can bring in any
testimony I please, bearing no relation to the subject, and a master in
chancery has no control over the admission or rejection of it. I will put
in hearsay testimony ; I will put in a story — that of garrulous old wo-
men) I will make extracts from an old newspaper; 1 will lumber all



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PERPETUATING TESTIMONY. 255

that into the record. IS'ow, if this came to a decision before a judge he
woald throw out all this refuse, and, knowiug it, I would not then pat
it in.

This bill does not provide for any adjudication. There is no means
by which the defendant cau force it into a trial. I can put in anything
I like, and put it all in. 1 make the worst case against him I can, with-
out his having any opportunity to go before the court and expunge the
irrelevant testimony. It is all put in, and put on record in the Patent
Office, and there is a cloud at once put on the title, ^ow, what man
here would like such an action taken in relation to his real estate? For
instance, I buy a farm of sixty acres; I have a rich neighbor, who
pounces down on me and says : ^' I don't think I want you here. I will
file a bill to perpetuate testimony, showing that John Smith, squatter,
or Bill Jones, or Jack Thompson, or somebody else, came and squatted
on the property under the homestead act, and that his title is superior
to yours. I will put that testimony on the records, and it has got to
stay there, and you can't have any adjudication." And it becomes a
cloud on your title as long as you remain there, thus allowing gross in-
justice to be done. It is putting a dangerous remedy in the hands of
a most dangerous class^the wealthy part of our country, who want to
use an invention without paying for it — in order that they may use it
if they want to. 1 do not think they will ; but I say it is a dangerous
experiment to grant a power which they may use against a class of men
who cannot de^nd themselves.

Mr. TowNSHENB. Would this affect the inventor, unless he was a
party to the proceeding?

Mr. Ghkisty. The bill proposes to make him a party.

Mr. TowNSHBND. Then the bill proposes to give notice to him of any
proceeding, does it not ?

Mr. Cheisty. He does not know what will be the direction of the ex-
amination.

Mr. TowNSHEMD. The bill must set forth ^' the date, number, and
subject of the patent, and the name of the patentee, the names and resi>
dences of the several parties interested in said patent, so far as known
to him, the names of witnesses proposed to be examined."

*Mr. POLX.ABD. There is no issue made up beforehand ; nothing as to
the direction or scope of the examination ?

Mr. Smith. The first clause provides that it shall set forth, &c.

Mr* Chhistt. There may be no issue, and no suit ; and worse thai^
that, it is followed by no adjudication. It is the maxim of the law that
there should be an end of litigation. I am utterly opposed to any such
provision as will allow any litigation to be carried on unless followed by
adjudication. I think it is a dangerous thing.

Mr. Ward. How much more notice, on the contrary, would came
from the patentee as plaintiff?

Mr. PoLLABD. But there is an issue there.

Mr. Wabd. Anything more tban a formal issue f Does it give any
more light to the cause of action than a formal declaration does— and
that does not give any.

Mr. Chbistt. Well, it involves certain questions, but you do not
know what the power to perpetuate testimony involves, nor does it
render it necessary that the bill filed should state that.

Mr. Smith. Your difficulty would be remedied by requiring a very
particular description of the suit.

Mr. Chbistv. It would be remedied in part; but it would enable tes-
timony to be introduced to affect the title of a party who has tkprima^



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256 MR. G. H. CHRISTY.

facie title^ and would not be followed by any adjudication; in other
words, you and I do not want any cloud thrown on the title of a patent
we own.

The Chairman. Is there not in every State in the Union a law for
perpetuating testimony, and cannot the same objection be made with
the same force and effect in all those cases that you make now, and has
any such evil ever arisen firom that law by which testimony is perpetu-
ated, as you suggest!

Mr. Briggs. Does the statute in any State for perpetuating testimony
require the testimony to be recorded in any court where the titles are
recorded!

Mr. Storrow. It does in Massachusetts.

Mr. WiLLiTS. There is nothing in my State that has the effect of
lis pendens,

I think there is something in the suggestion I made yesterday about
what is the extent and effect proposed in this notice by filing In the
Patent Office. Now, they say this cannot be used as testimony, except
between the parties. Well, if that is the case, what is the use of filing
it in the Patent Office ? It is to be a notice, and if that is the notice, is
it to be a notice for the benefit of other than parties to the petition f And
if it is notice to all parties, won't it be something in the nature of an es-
toppel ? Don't it affect parties outside of the petition and outside of
the proceeding! In taking Uiis testimony, of course I have not looked
it through. It looks as if the very fact of filing it in the Patent Ofiice
is intended to reach beyond the parties that are really involved.

Mr. Brigk>s. It does, by the terms of the bill, reach all subsequent pur*
chasers.

Mr. Ohristy. The exact purport and object is to crush the patentee,
or to prevent his making any sales. For example, I take out a patent
:for tooth-picks ; my neighbor, or friend, or enemy wants to make use of
my mode of making tooth-picks, and without paying me anything for
it. He says, *'I will infringe"; or, "I will buy a license." Or I will
change the illustration : He is making tooth-picks in some other way.
Now, he says, " This mode of yours is better than mine, and I want to
crush you in the business." He files a bill to perpetuate testimony. He



Online LibraryUnited States. Congress. Senate. Committee on PateArguments before the Committee on Patents of the Senate and House of Representatives, in support of, and suggesting amendments to, the bills (S. no. 300 and H. R. 1612) to amend the statutes in relation to Patents, and for other purposes .. → online text (page 40 of 71)