As their royalty revenues grew, the Drapers extended their product line to include complete machinery.
By 1870 the Drapers had made a conscious decision to redirect their efforts in securing patentable inventions from primarily loom-related mechanisms to the field of spinning.
Just as George Draper had done with Warren Dutcher earlier, the Drapers brought Jacob Sawyer to Hopedale to manage the Sawyer Spindle Company.
The Hopedale Machine Company had sufficient production capacity to meet the demand for Sawyer spindles as replacements in spinning frames already in place, and the Drapers controlled the sales of high-speed spindles for use in retrofitting old frames of various types from the start.
As their capacity increased, the Drapers tried to sell Sawyer spindles manufactured at Hopedale directly to the spinning frame manufacturers, but this strategy encountered other sorts of difficulties.
The Drapers faced competition from inventors and investors pursuing the goal of high-speed spinning with a variety of often closely related designs.
In both cases, the Drapers exchanged a small number of Sawyer Spindle Company shares for patent rights to maintain control over the patent pool.
By raising the costs of patent competition through unrelenting and effective litigation, the Drapers created a wide berth for their internally developed patents and enhanced their bargaining leverage when acquiring patent rights from others.
For example, the Drapers successfully brought suit against the Eureka Spindle Company for infringement of a patent that was not in use in any form.
The Drapers had their lawyers interview all the mill employees who could be found for the years 1868 to 1871, incurring legal costs for this case in excess of $25,000.
In 1903 the Drapers reviewed the performance of the spindle market and listed all the inventors of important spindle innovations since 1870 and the number of spindle patents issued to each (see Table 2).
The acquisition of three-quarters of the patents in the pool from external sources indicates how the Drapers consolidated their control.
The Drapers not only maintained their technological leadership in improved spindles, but, by increasing their stock of patents, they also gained bargaining leverage in negotiating patent acquisitions and enhanced their capability for legal defense of the patents they controlled.
The Drapers developed unassailable control over the returns to their loom innovations through an unprecedented buildup in the scale of in-house inventive activity.
Patent royalties had provided the Drapers with a singularly large and liquid capital fund among textile machinery manufacturers.