Thursday, February 10, 2005

Bicycle patents

Although some legal commentators of today complain of games played to alter claims to cover competitors' products, this practice has been around for a while.

from Robert Mionske in VeloNews:

While the reissue of Mackenzie's 1862 patent wound its way through the patent office, Smith and Witty sued each other over the Mackenzie and Lallement patents. Instead of fighting it out, they settled out of court and combined forces, using Witty's resources to jointly enforce royalties. They demanded retroactive payments of $10 to $20 per unit from both importers and manufacturers. The velocipede craze was rapidly dying by this time, and the royalty demand persuaded many firms to pull out of the business. Exactly how much money they made is unclear. Witty claims he earned over $25,000 in December 1869 alone, and Lallement biographer David Herlihy believes he turned down a $75,000 offer at the peak of the fad. After Smith died in 1874 his wife sold off the Mackenzie patents to her husband's former lawyer, Charles Durgin, who in turn sold them in the spring of 1876 to the Montpelier Manufacturing Company, a Vermont maker of baby carriages, sleds, hobby-horses and other toys.

With the American velocipede industry dead after 1869, all four patents lay idle and ignored. However, as Americans began to show some interest in the high-wheeled bicycle after the 1876 Philadelphia world's fair, their owners started to pull them out of safes and file drawers and give them a second look. In July, 1877 the Montpelier firm reissued Mackenzie's 1864 patent, changing its claims language in a way similar to that earlier done by Smith to Mackenzie's 1862 patent.

In September, Calvin Witty sold the Lallement patent to the Boston firm of Richardson & McKee. The partnership of Henry M. Richardson and George McKee manufactured children's carriages and baby buggies. In 1876 and 1877 they were joined by a relative of George McKee named Joseph McKee. It was probably a part-time arrangement, as Joseph was a partner in a New York firm, McKee & Harrington, a manufacturer of carriages and carts. It is possible that Colonel Pope was acquainted with the Boston firm, as Albert A. Pope and Company, the colonel's shoefindings firm, shared the same address as Richardson & McKee, 6 Merrimac, for several months in 1875. In any event, Pope took out a license from Richardson & McKee when he had the Weed Sewing Machine Co. of Hartford make his first 50 high-wheelers in early 1878.

Pope's application galvanized Richardson & McKee. They immediately sought a reissue of the Lallement patent that dramatically expanded the scope of its claims language. Three days after the Lallement reissue was approved, Richardson & McKee bought three velocipede patents from Harvey Reynolds, including the crucial March 1865 patent with opposable cranks.

In January, 1878 Richardson & McKee and Montpelier entered into an indenture agreement effectively pooling the rights to the eight patents they held, including the Lallement, Mackenzie and Reynolds documents. Together, the two firms now controlled the basic rights to the bicycle, and Pope was in a bind. By early 1879, Richardson & McKee were squeezing him for royalty demands totaling $27.50 per bicycle. Pope turned to Charles Eadward Pratt to sort out the mess.

Born in Vassalborough, Maine, in 1845, the son of a Quaker minister, Pratt graduated from Haverford College in Pennsylvania in 1870. By April 1878 he was working for Pope, writing David Brandon about French bicycle patents prior to 1866. Brandon replied, "We presume that your object is to find a previous patent in order to upset Lallement's U. S. Patent." Brandon was correct, but the information he could locate was of little assistance, and unable to break the patent pool, Pope instead opened his checkbook.

In March 1879 Richardson & McKee sold half of their rights - a quarter of the total - in the eight pooled patents to the Pope Manufacturing Company. Although the agreement was dated March 19, the full text of the agreement that Pope was required to submit to the patent office was not sent until April 21, suggesting that the parties were tweaking the exact language of the document for a month after entering into their initial agreement. The next day, April 22, the directors of the Montpelier firm agreed to sell all rights in their one-half interest in the eight patents. Interestingly, Montpelier did not sell to the Pope Manufacturing Company, but to Charles Pope, the colonel's father, who subsequently conveyed his interest to the firm.

Although the Pope company's 1907 official history, with Albert talking Richardson & McKee into a deal, then racing through the night by express train from Boston to Vermont to cinch the Montpelier sale, makes for good reading, the patent office ledgers suggest that in reality Albert carefully crafted an agreement with the Boston firm, while Charles spent several days, possibly weeks, in Vermont negotiating with Montpelier. Once the Boston agreement was finalized, Albert wired his father in Vermont, who closed the other half of the deal. Six days later, Richardson & McKee capitulated and sold their remaining interests to Pope.


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