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competent authorities have, after most careful consideration, arrived at the conclusion that the granting of patents for inventions, under proper restrictions, is on the whole beneficial to the public. Moreover, it is proposed to remove the chief objection that has always been urged against the granting of patents, by putting patentees under an obligation to grant licenses.
If any there be who still think that the amendment of the Patent Laws should be tentative and gradual, we would remind them of the length of time during which the law has remained in its present admittedly unsatisfactory condition. If whilst we maintained an undoubted superiority as regards our staple articles of manufacture we could afford to be somewhat indifferent on the subject, we can no longer afford to remain so, now that not only is our superiority as regards many of our manufactures seriously questioned, but, as regards some of them, our manufacturers are no longer able by reason of the cost of labour in this country to compete with manufacturers abroad. Though we may not have been conscious of the extent to which we have been indebted to labour-saving machines for our superiority in the past, we cannot fail to recognize the importance of such machines to us in the altered condition of things. A measure, therefore, which may have the effect either of stimulating or retarding the production of laboursaving machines, deserves to be carefully considered, and we require no further justification for calling public attention to the Bill of Lord Cairns for consolidating and amending the Patent Law, which was introduced by him into the House of Lords last Session, and will doubtless be re-introduced next Session. That Bill is founded in a great measure upon the recommendations of a Select Committee of the House of Commons, which in making its report had the advantage of the labours of the Royal Commission appointed in 1865.
We do not propose to enter upon a consideration of the general provisions of the Bill, as for the most part we
think they will be found to recommend themselves to all persons who have considered the subject. But we do desire to direct attention to two of the principal provisions, which we think will, if left as they at present stand, greatly militate against the usefulness and completeness of the measure. The one relates to the granting of licenses by patentees; the other, to the cost of obtaining patents. Amongst the recommendations contained in the report of the Committee, appointed in 1872, to inquire into the law and practice, and the effect of grants of Letters Patent for inventions, the following will be found, namely, “ that all Letters Patent shall contain a condition that licenses be granted by the patentee to competent persons, on fair conditions, such conditions, as well as the fact of competency, to be determined in the event of disagreement by the Commissioners, due regard being had in such determination to the exigencies of foreign competition.” Now the 26th section of the Lord Chancellor's Bill, which purports to deal with this recommendation, is as follows:—“A patent shall be liable at any time after the expiration of two years from its date to be revoked on either of the following grounds :(a.) That the patentee fails to use or put in practice the invention, by himself or his licensees, to a reasonable extent, within the United Kingdom, or to make reasonable efforts to secure the use or practice thereof there, proof of the con: trary whereof shall lie on him. (b.) That it is made to appear to the Lord Chancellor that, in order to ensure a proper supply to the public of articles produced under the patent, or proper means for the use of the invention by the public, licences are necessary, and the patentee fails to grant licences to proper persons requesting the same, on terms which the Lord Chancellor, having regard to all the circumstances of the case, deems reasonable.” Now it will be seen that this clause is very far from carrying out the recommendation of the Committee. The granting of licenses is sought to be secured by indirect means, instead of its being made a con
dition in the grant of a pitent, that licenses shall be accorded hy the patentee. Moreover, the method adopted in the Bill is clumsy and expensive. Under such a clause where a patentee objects upon any grounds to grant a license, the person seeking to obtain one will be driven to the necessity of taking proceedings to revoke the patent. Such proceedings will necessarily only be instituted in cases where the patent is of very great value, and by persons possessed of considerable means. Again, the remedy provided is only to be available two years after the date of the patent. There can be no injustice or hardship in making it obligatory upon the patentee to grant licenses upon reasonable terms, that is to say, upon such terms as will secure to him a fair remuneration, and give him an advantage in the production of patented articles over his licensees. And it will doubtless be greatly to the advantage of the public to have the granting of licenses made absolutely compulsory, and do much to meet the objections of those who are opposed to all monopolies. The only serious objection which can be urged against the carrying out of the recommendation of the Committee is the expense and difficulty of providing a competent tribunal to determine the terms upon which licenses shall be granted, in cases where the parties differ. But it will rarely happen that an appeal to any tribunal is necessary. Once make the granting of licenses compulsory and it will soon become a matter of course for patentees to offer to grant them on fair terms. Such is the case in America, where, though the granting of licenses is not made compulsory by law, yet so strong has the custom in favour of granting them become, that the refusal on the part of a patentee to grant them would be found seriously to prejudice him in any action he might bring for the infringement of his patent. The measure is one of vast importance to the various industries of the country. With a surplus income derived from patents of nearly £80,000 per annum, the question of expense cannot be a formidable obstacle. The difficulty of providing a competent tribunal cannot surely be insupe able.
In considering the question of the cost of obtaining patents, and the desirability of affording greater facilities for obtaining them, we cannot do better than refer to what has taken place in America, where greater attention has been paid to the law regulating the grant of patents, than in any other country in the world. The remarkable fertility of invention which has been exhibited in America is perhaps attributable to several causes. Amongst others may be mentioned the system which has grown up there of granting licenses, not for the manufacture only of patented articles, as in this country, but for the sale of them, which gives to the patentee a very considerable additional source of profit. The chief stimulus, however, is undoubtedly to be found in the scarcity of labour formerly existing in that country, which gave to all inventions by which manual labour could be saved an abnormal value. Moreover, it was seen by the legislature that the progress and development of the country in no small degree depended upon the success which should attend the efforts that were made to dispense with manual labour; and everything possible was done to foster a spirit of invention. The patent laws were constantly subjected to amendment with a view to affording increased facilities to inventors and more fully securing the benefit of patents to the public. The cost of obtaining a patent, in America, lasting over seventeen years, was made almost nominal as compared with the cost in this country. It must be admitted that the great facilities that were afforded resulted in some evils, such as the granting of patents for frivolous inventions, and an undue sub-division of patents. The evils which grew up, however, were for the most part the result of a lax administration of the law. On the other hand, it cannot be denied that the facilities afforded did much towards overcoming the great obstacle to the development of the country presented by the deficiency of labour. Now that owing to the cost of labour in this country we have been driven out of some of the markets of the world, and have to struggle to maintain our position in others, it behoves us to strive to stimulate the spirit of invention which undoubtedly exists in this country, by affording greater facilities to inventors so as to obtain further means of dispensing with manual labour, and thus to place ourselves more nearly on an equal footing with those countries where labour is cheap. We cannot grant too many patents to inventors, if only the full benefit of their inventions is secured to the public. At present the cost of obtaining protection for an invention is such as to be almost prohibitive to persons of the artizan class, amongst whom the evidence taken by the Committee shows that by far the largest number of inventors is to be found. At present when persons of that class do succeed in obtaining protection for their inventions it is by the aid of their employers, who in numbers of cases are found to monopolize both the credit and profit resulting from the invention. The whole of the stamp duties payable in America in respect of a patent lasting over seventeen years scarcely amounts to one-third the sum required to be paid during the first year in this country: and we believe the office charges are much less in America than here.
Lord Cairns does not in either of his Bills propose to lower any stamp duties on Patents. He told us, on introducing his Bill of 1875, that both the Royal Commission and the Committee were opposed to the lowering of fees. It should be remembered, however, that the Royal Commission sat in 1865, and the Committee in 1872. Even at the latter date, the effect of the increased cost of labour upon our various industries had not been fully realized. The Royal Commission appears to have been impressed with the idea that the number of applications for patents was already large enough, and that to increase the number would only be to add to the obstructions in the way of manufacturers. They do not appear to have taken into account the number of applications that entirely fail, and the enormous number of patents, amounting to seventy per cent. of the whole