The Real Genius of the Founders: Making America’s Patent Fees Affordable

The Real Genius of the Founders: Making America's Patent Fees Affordable

EDITORIAL NOTE: What follows is an excerpt from David Kline’s book titled “The Intangible Advantage: Understanding Intellectual Property in the New Economy,” published by Michelson IP, 2017. Published here with permission.

The real genius of the Founders lay in the way they consciously integrated democratic principles into the design of the world’s first modern patent system — principles that had a profound impact on the pace and direction of U.S. economic growth. These were reflected in several fundamental innovations in our patent system that departed from European practice.

First, the original patent law passed by Congress on April 10, 1790 deliberately set patent fees to a level any ordinary citizen could afford — initially $3.70, but three years later raised to $30. This was still less than 5 percent of the rate in Britain. Patent fees remained $30 for the next seventy years, ensuring that virtually any citizen could participate in the industrial revolution.

The results were dramatic. Whereas most of Britain’s handful of inventors came from privilege, the vast majority of America’s thousands of inventors came from humble beginnings. They were farmers, factory workers, merchants, mechanics, and other artisans for the most part.

Of the 160 so-called “great inventors” of nineteenth century America, over 70 percent had only a primary or secondary school education. Many had no formal schooling at all. And some of the most famous names in American invention — Matthias Baldwin (locomotive), George Eastman (roll film), Elias Howe (sewing machine), and Thomas Edison (electric light and phonograph) — had to leave school early to support their families.

What’s more, in another sign of economic democratization, most U.S. inventors had no formal scientific or technical training. They had only the general knowledge common to citizens of the day, plus whatever they taught themselves. What distinguished them was their ingenuity in applying that general knowledge to the practical problems of daily existence, and then exploiting the commercial opportunities that arose as a result. In short, they were entrepreneurial.

“The rapid growth of inventive activity during early American industrialization was characterized by a disproportionate increase in the involvement of segments of the population with relatively common sets of skills and knowledge,” note Sokoloff and Khan. “Rather than being accounted for by an elite who possessed rare technical knowledge or commanded large amounts of financial resources, the rise in patenting coincided with a broadening of the ranks of patentees to encompass many individuals, occupations, and geographic districts.”[1]

Making the patent system inexpensive invited everyone’s participation. In the words of Englishman John Standfield, quoted in an 1880 issue of Scientific American: “The cheap patent law of the United States has been and still is the secret of the great success of that country.”

Second, the Founders greatly simplified administrative procedures in applying for a patent. This was no small thing when you consider that British applicants were forced to seek approval from seven different offices, and then twice — twice! — obtain the signature of the King. If they wanted a patent that also covered Scotland and Ireland as well, they needed approval from ten more offices. British patent procedures were so Byzantine, in fact, that author Charles Dickens wrote a spoof of them entitled A Poor Man’s Tale of a Patent, in which his main character, an inventor, is forced to seek approvals from 34 offices, some of which had been abolished years before and no longer existed. Obviously, few inventors could hope to run this gauntlet successfully unless they had the wherewithal to hire very expensive patent agents to assist them.

In the U.S., on the other hand, applications only needed the approval of a single patent office, which created repositories throughout the country where inventors could drop off their applications and models and have them forwarded to the patent office at government expense. Rural inventors could even apply for a patent through the mail — postage free!

This last perk for rural inventors turned out to have a big impact on the course of U.S. economic development. While most British industrial breakthroughs were confined to London or other big cities, U.S. inventions were widely distributed across the country, in urban and rural areas both. The result was broader-based economic growth and less income inequality in the U.S.


[1] Kenneth Sokoloff and B. Zorina Khan, “The Democratization of Invention During Early Industrialization, 1790-1846,” Working Paper No. 578, Department of Economics, University of California, Los Angeles, December, 1989.


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Join the Discussion

6 comments so far.

  • [Avatar for Anon]
    March 5, 2018 02:19 pm

    Mr. Heller,

    As pointed out previously, your desire to use some sort of “public funding” would only worsen the situation of monied interests capturing the general political situation and being detrimental to the innovation community.

    Such is simply not the panacea that you think it to be.

    Merely preventing the “innovation tax” of siphoning off funds that innovators pay into the USPTO that Congress “reallocates” to “general purposes” would be substantial.

  • [Avatar for Edward Heller]
    Edward Heller
    March 5, 2018 01:38 pm

    Obviously I am in favor of public funding of patent examination. We should keep fees down, far below costs — at least for Americans. Finally, we should not divert fees that are collected to the public treasury, but assure they too fund the PTO.

  • [Avatar for Edward Heller]
    Edward Heller
    March 5, 2018 01:34 pm

    What a radical idea, provide for public funding for the cost of patent examination/registration? In contrast to our founding fathers, England charged the fees it did to fund the bureaucracy. Sound familiar?

    Welcome to England.

  • [Avatar for Paul Morgan]
    Paul Morgan
    March 5, 2018 10:21 am

    Interesting. Japan also made patent application filing relatively inexpensive, but for a different primary reason – inexpensive pre-product-launch defense dates for export protection.
    It was not indicated if that original U.S. $30 patent application fee was just for filing, or also covered processing and issuance? But note that $30 in 1820 had the value of $533.81 in 2017, and the current USPTO filing fee for a Micro Entity small inventor is only $75.
    Adding the current Micro Entity search fee of $165. [no real searches were conducted back then], and the examination fee of $190., is still only $430., or less than that $533.81 to know if one will get a patent and if it is worth paying the issue fee.

  • [Avatar for Anon]
    March 4, 2018 11:06 am

    **- I tagged “current” as the obsession against the “easy” of software is now running for the last 50 years at least.

    Software as a design choice in comparison to any other type of “ware” as components of computing systems remains a target of obfuscation and removal from patent eligibility that defies inte11ectual honesty.

  • [Avatar for Anon]
    March 4, 2018 11:03 am

    There is an obvious mirror to this story in the current** obsession with denying patent eligibility to certain types of innovation.

    That type of innovation that not coincidentally comes in the form of software.

    Software is the modern day version of opening up innovation to the masses.

    It is simply not by accident that many of the arguments against software patents sound as opposed to the fundamental building blocks (and differentiating factors) of the US patent system.

    Too “easy,” too “cheap,” and “anyone can do that” bring a gossamer veneer to desire to make patenting a King’s game, a game only for those already entrenched.

    Fear mongering of a number of sorts (including the widely debunked “Tr011” mongering) often wears the sheepskin of “quality” while merely pursuing the wolf’s desire of negating the principles as the author of this article so eloquently states.

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