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Tuesday July 01 2008

One of the most forceful cases against the currently dominant assumptions about “intellectual property” is now being put by Terence Kealey, most recently in his new book Sex, Science and Profits.  Here is what he says at the start of his chapter entitled “Let’s Abolish Patents” (pp. 362-4), about the Wright brothers:

The Twentieth century opened with three memorable technological advances.  In 1901 Guglielmo Marconi sent the first transatlatic radio signal, in 1903 Henry Ford launched his production line to bring cars to the masses, and in the same year Orville and Wilbur Wright flew the first manned heavier-than-air powered aircraft, Flyer 1.  But what is now forgotten is how all three advances were handicapped by patent fights.  Marconi fought Nikola Tesla through the courts for no fewer than twenty-nine years (before losing), while Henry Ford fought the patent on the motor car held by the Association of Licensed Automobile Manufacturers (a cartel of bespoke manufacturers that refused to license a mass producer like Ford) through another morass of courts, winning only in 1911.  Meanwhile, the Wright brothers patented the aeroplane, which was the biggest mistake of their lives.

The Wright brothers were bicycle manufacturers from Dayton, Ohio, who invented the aeroplane in tlieir spare time. They were amateurs. The person who felt he should have invented the aeroplane was a grander figure, Samuel Pierpoint Langley, the director of the Smithsonian Institution. Since 1885 he had been trying to fly his own planes, Aerodromes l to 6, yet each had crashed on take-off into the Potomac River, over which Langley launched his Aerodromes to allow his pilots a chance of survival. A reporter described the crash of 7 October 1903 as Aerodrome 6 ‘entering the Potomac like a handful of mortar’. Yet on 17 December Orville and Wilbur Wright took off near Kitty Hawk, North Carolina.

The Wright brothers had financed their own R&D (a mere $1,000) whereas the federal government had provided Langley with a grant of no less than $73,000. The federal government then, of course, funded only military and agricultural research, but Langley had exploited the Spanish-American War of 1898 to persuade Congress to finance him, only to have created, in the disenchanted words of one Representative, ‘a mud duck’. Both the government and the Smithsonian were therefore chagrined by the Wrights’ success.

But the chagrin was soon aggravated by the Wrights’ patents because, after the brothers’ success with Flyer l, other American aviators, including Glenn Curtiss, soon built their own planes. But each time Curtiss or any other aviator took to the American skies, the Wrights sued for patent infringement. Official America took Curtiss’s side, and in court the Smithsonian and the relevant federal government agencies claimed, falsely, that the Smithsonian’s Aerodrome had flown first. The Smithsonian even got Curtiss to adapt Langley’s surviving Aerodrome to show it could have flown, and for years the Wrights were reduced to protesting that it was only on being adapted in the light of later experience that Aerodrome (nearly) flew. But official America so denigrated the Wright brothers that in 1928, when Orville Wright (the surviving brother) sought a museum for Flyer l, he found no US institution prepared to take it nor one to which he was prepared to donate it. He sent it instead to the British Museum in London. Only after Orville died in 1948 did the Smithsonian ask London for America’s plane back - the Smithsonian did not want to give a Wright brother the satisfaction of knowing that it acknowledged his priority.

Yet this unpleasant story was not just one of frustrated amour propre: the federal government had legitimate concerns. The aeroplane was of strategic value, and the Europeans (who readily paid the Wright’s licence fees) were pulling ahead in aeronautics, but the US was threatened with obsolescence because the federal authorities would not pay those fees.  It is hard to understand why America could not reach an agreement on licence fees, but the federal government had funded Langley’s research, so it did not want to recognize its waste of money, and the Smithsonian colluded with the charade because it needed to sustain the credibility of future government grants. ...

Okay so far, but this next bit seems to me to overstate Keeley’s case:

If the federal government was determined not to pay the licence fees, it would have been more honest of it to have modified the relevant patent laws.  Indeed, in a key episode, the federal government did, as a war measure in 1917, revoke the Wrights’ patent rights, a revocation that it sustained until 1975.  Between 1917 and 1975, therefore, the federal government forced all US aeroplane manufacturers to pool their patents collectively – and the consequence was the vast growth of the US aeroplane industry.  ...

And here comes what seems to me to be a serious non sequitur:

Thus we see that the Wright brothers’ patents destroyed aeronautical innovation in the US, and that only on their revocation in 1917 did America’s planes take off.

But how, if the Wrights and their patents had stymied aeroplane progress in America, was Europe still able to make progress?  Answer: Europe paid the fees.  What stopped American progress was the unwillingness of any Americans to pay such fees.  The federal government refused to do business with the Wrights, and presumably that reluctance was shared by the likes of Glenn Curtiss.  (Why?) Then, the federal government switched off (a supporter of patents would say “stole") the Wrights’ patents, and American aeroplane progress resumed.  Americans started to make proper use of the Wrights’ invention.  But surely if they’d paid up, as the Europeans did, they could have done that anyway.

I agree that the period between 1917 and 1975 suggests that patents are not necessary for technological progress, assuming Kealey has his facts about that period right.  But I do not accept that the period before 1917, the way he describes it, proves anything except that the federal government was an ass.

And what about the period since 1975?  Aeronautical progress in the USA has not exactly ground to a halt.  Has it?

The conclusion I draw from this story is not that patents are a huge bar to progress, but that, actually, they don’t make that much difference, either as a bar to progress or as a stimulus to it.  Which, interestingly, is the opinion that I recall Michael Jennings (the new British citizen of the previous posting) expressing in this recorded conversation (which I wrote about in this posting here).

A few pages later (p. 368) Kealey concludes his account of the Wright brothers thus:

In any case, the Wright brothers did not invent the aeroplane in a vacuum: in a letter of 1899 the brothers had written to Langley asking for information.  And the irony is that the Wrights would have produced Flyer 1 in the absence of patent laws.  They did not create powered flight for profit; instead , like most great researchers, they were driven by the love of discovery.  The patent laws being in existence, however, they naturally exploited them. But their persistent litigation brought them only unhappiness.

Indeed, from about 1908 the Wright brothers produced no more innovations, they simply fought patent case after patent case.  They won their cases at vast expense, but, ironically, they would have made real money if, instead, they had focused on growing their very considerable first-mover advantage.

Here is a case against patents, that they entice glory-seeking inventors away from invention and into money-seeking litigation.  If patents do no good, in terms of encouraging innovation, but harm by side-tracking successful innovators, then that is a reason to abolish them.

I have more reading to do.  I anticipate (although I promise nothing) that there will be further gobs of Kealey here, and then probably a review of this book here, and further writings about it here.  Also here, because there are big competition issues in Kealey’s work as well as intellectual property issues.