Who Stole IP Rights in a Pencil Eraser? Not Faber-Castell

It has to be one of the oddest comments that I have encountered in quite a while. The setting is the September 18th issue of The Economist. In the Business section, the magazine presented the kind of article for which it is rightfully reknown. Entitled "The Future of the Pencil" the article recounts the multi-generation saga of Faber-Castell, a German company located near Nuremberg that has been making pencils since 1761. They have done so with such success that the company is described as the world's largest branded pencil manufacturer.

This is no small feat. After all, a pencil is not a pen, and the market seems to be predominently school-age youngsters (although Otto von Bismark and Vincent van Gogh are also mentioned). As such, the company has to convince parents to opt for a branded pencil, when presumably unbranded options (perhaps at a lower price) are available. From the IP perspective, this saga of success spanning four centuries should be equal parts of trademarks and know-how. Sadly, however, the trademark issue is totally ignored in the article. I don't for how long the company has used the epopymous name as the mark for its products. But I have to guess that it reaches back to the 19th century. If this is true, there is a great story here about the longevity and continuing flourishing of this venerable brand.

Instead, the article focuses entirely on the innovative activities of the company. Thus, in 1839, the great grandson of the founder came up with the hexagonal pencil, whose principal virtue is that it effectively prevented the pencil from rolling off the table. Later on, they worked on making more firmer leads and identifying the types of woods that are less likely to break when the pencil is dropped. In more modern times, the company has come up with three major innovations: First, it began use of water-based, environmentally friendly paints. Second, it developed an ergonomic triangular shape that has been well-received by children (presumably they also teach the children the meaning of the term). Third, they added so-called rubbery dots to prevent the pencils from slipping out of the sweaty hands of the children.

All of this seems jolly good, so where is the problem? I quote from the article:

"Faber-Castell's second big innovation was stolen. In 1875 America's Supreme Court ruled that Faber was entitled to put rubber erasers onto the back of its pencils, although another inventor had already patented the idea. The court felt that the idea was too obvious to patent."

What did The Economist mean by "stolen"? I mean, in today's world, the bad guys, at least under one view of things, are the patent trolls, who are accused of seeking to enforce a patent solely for the purposed of extracting "unfair" rents from unsuspecting users of the patented invention. No one would go so far as to say that patent trolls are "stealing" from the third parties who agree to pay the troll a sum to settle. Be that as it may, the pejorative context of the patent troll is exactly the opposite from the Faber situation in the 1870's. All that Faber apparently did was defend itself from an infringement claim by alleging that the patent was invalid. If that is theft, then virtually every defendant in a patent litigation action is candidate to be of a "thief", if it succeeds in invalidating the patent at issue.

I actually looked up the judgment in question, Reckendorfer v. Faber, 92 u.s. 347 (1875). Interestingly, the patentee argued that the court did not have the authority to review a decision by the Patent Commisisoner to accept an invention for patent registration. That argument was rejected, but it seems that if there was any incorporeal larceny going on, it was the attempt by the patentee to prevent the court from reinstating in the public domain an exclusive right that never should have been granted in the first place. If there was any opprobrium to be heaped on the parties in that case, it should have been on the patentee and not on Faber.

I wonder what The Economist intended by its use of the word "stolen". Did it want to intimate that even in the 19th century, corporate America (or corporate Germany) was taking advantage of the legal system to deprive private inventors of their intellectual property rights? If so, how odd. As well, one has to wonder a bit about the nature of the understanding about the patent system that is found in this most august of weekly news magazines.