The first practical pen with reservoir is credited to Lewis Edson Waterman a 45 year old American insurance broker in 1884. The story goes that he was getting ready to sign a vital contract on a building site and had bought a new pen for the occasion feeling that it would create a good impression and be more convenient for the circumstances than the more usual dip nib pen. The contract was on the table, and the pen was in the client's hand. Once, twice and even a third time the pen refused to write and then it made an ink blot on the important paperwork. Mr. Waterman returned to his office in all haste, obtained a fresh contract and returned to the site - a rival broker had beaten him to it and the client had signed a contract with the competitor.

Waterman refused to be caught out again in like fashion and having an inventive mind designed his own pen and commenced to produce them in his brother's workshop. His design was based upon the physical force of capillarity where air replace the ink used giving a smooth, even, blot free flow. His idea was patented in 1884 but he continued to sell insurance while manufacturing just a few hundreds pens per year. However Waterman saw the benefits of advertising and sales increased rapidly. Gold nibs were obtained from New York and in 1900 a factory was built in Montreal, Canada to make the pens.

Lewis Waterman died in 1901 but his son Frank took over the successful business and conquered Europe with sales rising to 350,000 pens per year. Another first for Waterman was adding a clip to the cap in 1905.