PATENT WARS: INTRODUCTION
If the industrial age had taught any lasting principles as it neared the end of the century, it was the danger of allowing one company to monopolize an industry. But first Britain and then the United States carved out one key exception. Since inventiveness was essential to stoke the fires of industry, it became sound public policy to vouchsafe the inventor a period of time in which to explore his brainchild before competitors could horn in.
As capitalists came to realize that a patent really amounted to coinage, the noncreative but monied were allowed to buy patents and then erect their own industry tollgates, exacting a levy each time a product rolled off the shop floor. Rather than spurring industrial production, patent trading actually retarded it by causing product prices to rise and demand, in consequence, to fall.
19th century venture capitalists licked their chops as they watched Pierre Lallement, a French carriage maker, migrate to America to patent and then utterly fail in trying to market his ‘mechanical velocipede.’ Calvin Witty of Brooklyn bought his patent on the cheap; he then exacted a $10 tribute for each bicycle that anyone else made.
The Lallement patent passed from hand to hand, gaining in value as bicycles grew in popularity, until its owners in 1876 called on Colonel Pope, who, they had learned, intended to manufacture high-wheelers. They ‘pulled’ out their dusty parchments and promptly made their claims for royalties. Before the session had ended, an annoyed Pope had bought the patent and a dozen relating to its components and learned a lesson he’d not soon forget.
– Colonel Albert Pope and His American Dream Machines, by Stephen B. Goddard
In the early days of transportation, more money was often made from patents than from manufacturing and selling the invention concerned. But many early inventors also had to become specialists in litigation, as competitors would often copy their product surreptitiously, and sometimes it was difficult to prove. For example, the American patent-holder for ball bearings, Simmonds Rolling Machine Co, hired detectives to infiltrate the Pope Mfg Co: one got a job at the factory, while another pretended to represent a group of investors so he could inspect the accounts. When they presented their findings, Pope settled out of court. But Pope had been trading in the patent market for nearly two decades. He had bought Pierre Lallement’s original patent for the bicycle, and aggressively bought all other bicycle patents he could find, amassing a fortune by restricting the types of bicycles other American manufacturers could make and charging them royalties.
Some patent wars seriously affected further development of the invention. The Wright Brothers were hailed as heroes in 1903. But their litigation against other aircraft developers caused much resentment, and a consequence was that America had no home-built aircraft to use in The Great War: they had to use French machines.
Another example is Thomas Edison, who held a record 1093 patents, and hired goons to protect his motion picture patents. This affected all the other early cinematographers in New Jersey, the centre for the movies at the time. Eventually, other innovators moved to California beyond his reach …and founded Hollywood.
Tyre patents were hotly contested. Although Dunlop was the first to put the pneumatic tyre into production, his patent was subsequently overturned …because the original inventor and patent holder was Robert William Thompson. Another result of tyre patents is that tubeless tyres were used in America – to the utter detriment of that country’s cycle industry – to avoid paying fees on the Dunlop patent.
The Selden Patent probably represents the greatest drawback to subsequent development of an invention…
PATENT WARS: PATENT HISTORY
In the late nineteenth century and the beginning of the twentieth century, patent law regulation meant that British patents lasted for 20 years, while American patents had a duration of 17 years.
The history of patents and patent laws is generally considered to have started in Italy with a Venetian Statute of 1474 which was issued by the Republic of Venice. They issued a decree by which new and inventive devices, once they had been put into practice, had to be communicated to the Republic in order to obtain legal protection against potential infringers. The period of protection was 10 years.
Patents, however, existed before the Statute of 1474. In England grants in the form of ‘letters patent’ were issued by the Sovereign to inventors who petitioned and were approved. The earliest authenticated instance of a royal grant was King Edward III’s incentive in 1331 to John Kempe, a Flemish weaver, for a woolen weaving monopoly, to inspire foreign artisans to move to England. Another early example of such letters patent was a grant by Henry VI in 1449 to John Utynam, a Flemish man, for a 20 year monopoly for the making of stained glass.
The first Italian patent was actually awarded by the Republic of Florence in 1421, and there is evidence suggesting that something like patents was used among some ancient Greek cities. In 500 BC, in the Greek city of Sybaris (located in what is now southern Italy), “encouragement was held out to all who should discover any new refinement in luxury, the profits arising from which were secured to the inventor by patent for the space of a year.”
In the reign of Queen Anne (1702–1714) lawyers of the English Court developed the requirement that a written description of the invention must be submitted. These developments, in place during the colonial period before American independence, were the foundation for patent law in the United States, New Zealand and Australia.
In the United Kingdom, the Patents Act 1977 harmonised UK patent law with the European Patent Convention. Consequently, UK patent law is no longer based on the Statute of Monopolies, but an amalgam of UK and European practices. Coincidentally, the current length of UK/EU patents is still 20 years.
In America, the original patent term under the 1790 Patent Act was decided individually for each patent, but ‘not exceeding fourteen years.’ The 1836 Patent Act (5 Stat. 117, 119, 5) provided (in addition to the fourteen-year term) an extension ‘for the term of seven years from and after the expiration of the first term’ in certain circumstances.
In 1861 the seven-year extension was eliminated and the term changed to 17 years (12 Stat. 246, 249, 16) from the initial grant date.
Inspired by George Brayton’s mammoth internal combustion engine displayed at Philadelphia’s 1876 Centennial Exposition, George Selden began working on a smaller lighter version, succeeding by 1878 – eight years before the public introduction of the Benz Motorwagen – in producing a one-cylinder version with an enclosed crankshaft with the help of Rochester machinist Frank H. Clement and his assistant William Gomm. He filed for a patent on May 8, 1879. His application included not only the engine but its use in a four-wheeled car. He then filed a series of amendments to his application which stretched out the legal process, resulting in a delay of 16 years before the patent was granted on November 5, 1895.
Originally, people thought of powered vehicles as a medium for racing: it took a while before they realized they could be used for more functional purposes.
Although Selden never actually made a car, his patent was credible. In 1899, he sold the patent rights William C. Whitney, who proposed manufacturing electric-powered taxicabs as the Electric Vehicle Co (EVC) for a royalty of $15 per car with a minimum annual payment of $5,000. Whitney and Selden then worked together to collect royalties from other budding automobile manufacturers. He was initially successful, negotiating a 0.75% royalty on all cars sold by the Association of Licensed Automobile Manufacturers. He began his own car company in Rochester under the name Selden Motor Vehicle Co.
The Ford Motor Co was founded in 1903. Henry Ford and four other car makers resolved to contest the patent infringement suit filed by Selden and EVC. The legal fight lasted eight years, its case generating a record 14,000 pages. The case was heavily publicized in the newspapers of the day, and ended in a victory for Selden. In his decision, the judge wrote that the patent covered any automobile propelled by an engine powered by gasoline vapor. Posting a bond of $350,000, Ford appealed, and on January 10, 1911 won his case based on an argument that the engine used in automobiles was not based on George Brayton’s engine, which Selden had improved upon, but on the Otto engine.
This stunning defeat, with only 1 year left to run on the patent, destroyed Selden’s income stream. But his patent had stretched from 1879 to 1911 and, during that time, covered every motorized four-wheel vehicle, a remarkable achievement in patent law.
PATENT WARS: FRAME DESIGNS
The Cross frame patent was subject to much litagation in England, while the Truss Bridge Frame design was similarly challenged in America.
PATENT WARS: THE CUSHION FRAME
PATENT WARS: TYRES
The inventor and original patentee of the pneumatic tyre was not Dunlop, but Robert William Thompson, in 1845.
Although John Boyd Dunlop would go on to invent the rubber pneumatic tyre, the first design by RW Thomson in 1845 used a number of thin inflated tubes inside a leather cover, making it less likely to deflate if only one of the inner tubes were punctured.
Patent introduction: http://en.wikipedia.org/wiki/History_of_patent_law#cite_note-3