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On September 30, 1846, Morton performed a painless tooth extraction after administering ether to a patient. Upon reading a favorable newspaper account of this event, Boston surgeon Henry Jacob Bigelow arranged for a now-famous demonstration of ether on October 16, 1846 at the operating theater of the Massachusetts General Hospital, or MGH. At this demonstration Dr. John Collins Warren painlessly removed a tumor from the neck of a Mr. Edward Gilbert Abbott. News of this use of ether spread rapidly around the world, and the first recorded use of ether in Britain was by Robert Liston at University College Hospital on 21 December 1846. The MGH theatre came to be known as the Ether Dome and has been preserved as a monument to this historic event. Following the demonstration, Morton tried to hide the identity of the substance Abbott had inhaled, by referring to it as "Letheon", but it soon was found to be ether.

A month after this demonstration, a patent was issued for "letheon", although it was widely known by then that the inhalant was ether. The medical community at large condemned the patent as unjust and illiberal in such a humane and scientific profession. Morton assured his colleagues that he would not restrict the use of ether among hospitals and charitable institutions, alleging that his motives for seeking a patent were to ensure the competent administration of ether and to prevent its misuse or abuse, as well as to recoup the expenditures of its development. Morton's pursuit of credit for and profit from the administration of ether was complicated by the furtive and sometimes deceptive tactics he employed during its development, as well as the competing claims of other doctors, most notably his former mentor, Dr. Jackson. Morton's own efforts to obtain patents overseas also undermined his assertions of philanthropic intent. Consequently, no effort was made to enforce the patent, and ether soon came into general use.