The next stage of development came almost fifty years after Loud’s patent, with an improved version invented in Hungary in 1935 by Ladislas Biro and his brother, Georg.   Ladislas Biro was very talented and confident of his abilities, but he had never had a pursuit that kept his interest and earned him a good living.  He had studied medicine, art, and hypnotism, and in 1935 he was editing a small newspaper-where he was frustrated by the amount of time he wasted filling fountain pens and cleaning up ink smudges.  Besides that, the sharp tip of his fountain pen often scratched or tore through the newsprint (paper). Determined to develop a better pen, Ladislas and Georg (who was a chemist) set about making models of new designs and formulating better inks to use in them.

One summer day while vacationing at the seashore, the Biro brothers met an interesting elderly gentleman, Augustine Justo, who happened to be the president of Argentina.   After the brothers showed him their model of a ballpoint pen, President Justo urged them to set up a factory in Argentina.  When World War II broke out in Europe, a few years later, the Biros fled to Argentina, stopping in Paris along the way to patent their pen.

Once in Argentina, the Biros found several investors willing to finance their invention, and in 1943 they had set up a manufacturing plant.  Unfortunately, the pens were a spectacular failure. The Biro pen, like the designs that had preceded it, depended on gravity for the ink to flow to the roller ball. This meant that the pens worked only when they were held more or less straight up, and even then the ink flow was sometimes too heavy, leaving smudgy globs on the paper.  The Biro brothers returned to their laboratory and devised a new design, which relied on "capillsry action" rather than gravity to feed the ink.  The rough "ball" at the end of the pen acted like a metal sponge, and with this improvement ink could flow more smoothly to the ball, and the pen could be held at a slant rather than straight up.  One year later, the Biros were selling their new, improved ballpoint pen throughout Argentina. But it still was not a smashing success, and the men ran out of money.

The greatest interest in the ballpoint pen came from American flyers who had been to Argentina during World War II. Apparently it was ideal for pilots because it would work well at high altitudes and, unlike fountain pens, did not have to be refilled frequently. The U.S. Department of State sent specifications to several American pen manufacturers asking them to develop a similar pen.  In an attempt to corner the market, the Eberhard Faber Company paid the Biro brothers $500,000 for the rights to manufacture their ballpoint pen in the United States. Eberhard Faber later sold its rights to the Eversharp Company, but neither was quick about putting a ballpoint pen on the market. There were still too many bugs in the Biro design.

Meanwhile, in a surprise move, a fifty-four-year-old Chicago salesman named Milton Reynolds became the first American manufacturer to market a ballpoint pen successfully. While vacationing in Argentina, Reynolds had seen Biro’s pen in the stores and thought that the novel product would sell well in America.  Because many of the patents had expired, Reynolds thought he could avoid any legal problems, and so he went about copying much of the Biros’ design.  It was Reynolds who made the deal with Gimbels to be the first retail store in America to sell ballpoint pens.  He set up a makeshift factory with 300 workers who began stamping out pens from whatever aluminum was not being used for the war.  In the months that followed, Reynolds made millions of pens and became fairly wealthy, as did many other manufacturers who decided to cash in on the new interest.

The competition among pen manufacturers during the mid-1940s became quite hectic, with each one claiming new and better features. Reynolds even claimed that his ballpoint could write under water, and he hired Esther Williams, the swimmer and movie star, to help prove it. Another manufacturer claimed that its pen would write through ten carbon copies, while still another demonstrated that its pen would write up-side down.  However, the effect of the slogans and advertising wore off as soon as the owners discovered the many problems that still existed with the ballpoint pens. As the sale of the pens began to drop, so did the price, and the once expensive luxury now would not even sell for as little as 19 cents.  Once again, it looked as if the ballpoint pen would be a complete failure.  For the pen to regain the public’s favor and trust, somebody would have to invent one that was smooth writing, quick drying, nonskipping, nonfading, and most important didn’t leak.

Two men, each with his own pen company, delivered these results.  The first was Patrick J. Frawley Jr.  Frawley met Fran Seech, an unemployed Los Angeles chemist who had lost his job when the ballpoint pen company he was working for had gone out of business. Seech had been working on improvements in ballpoint ink, and on his own he continued his experiments in a tiny cubbyhole home laboratory.  Frawley was so impressed with his work that he bought Seech’s new ink formula in 1949 and started the Frawley Pen Company.  Within one year, Frawley was in the ballpoint pen business with yet another improved model-the first pen with a retractable ballpoint tip and the first with no-smear ink.  To overcome many of the old prejudices against the leaky and smeary ballpoint pen of the past, Frawley initiated an imaginative and risky advertising campaign, a promotion he called Project Normandy.  Frawley instructed his salesmen to barge into the offices of retail store buyers and scribble all over the executives’ shirts with one of the new pens.  Then the salesman would offer to replace the shirt with an even more expensive one if the ink did not wash out entirely.   The shirts did come clean and the promotion worked.  As more and more retailers accepted the pen, which Frawley named the "Papermate," sales began to skyrocket. Within a few years, the Papermate pen was selling in the hundreds of millions.