June 7, 2012 12:34PM

How Loser‐​Pays Helped Launch Abe Lincoln’s Political Career

Rockford, Ill. inventor John Manny and his partner Wait Talcott hired the future 16th President to help fend off a patent infringement suit filed by the celebrated Cyrus McCormick, who manufactured a competitive reaper. After venue in the case was moved from Illinois to Ohio Lincoln subsequently took little role, and the main defense at trial was handled by Edwin Stanton, later to serve in Lincoln’s Cabinet as Secretary of War. Even so, loser‐​pays proved a boon. Quoting Kyle Graham’s account:

Good news finally came in April [1857] when the Court dismissed the appeal by McCormick – who was ordered to pay Talcott’s $75,000 in legal fees. Lincoln received only a small fraction of that, but it was enough to give him the financial freedom that year to mount his historic campaign for US Senator against Stephen Douglas, his last stepping‐​stone to the Presidency.

The litigious McCormick, of course, was to go down in history as one of his century’s leading industrialists, while Manny (who died before the case was resolved) and Talcott are known today only to history buffs. Critics of loser‐​pays like to portray it as favoring moneyed interests against the unoffending little guy. But they should save their fire for the wider process of litigation itself, which does pose exactly that danger: giant market incumbents and cynical “patent trolls” alike regularly employ questionable patents to harass and extract money from competitors. Where courts are allowed to recognize it, a right to loser‐​pays tends to curb the abuse by providing some measure of justice, however belated, for litigants in Manny’s and Talcott’s position.

That’s aside from its attractions as a campaign finance technique.