Posted by Adam Mossoff, guest-blogging: Patent Thickets, Incremental Invention, and Innovation: http://volokh.com/archives/archive_2009_05_03-2009_05_09.shtml#1241493210
The story of the sewing machine is an important empirical case study of how the American patent system has long successfully dealt with incremental invention and resulting patent thickets. This historical patent thicket challenges the principal focus of the literature on recent inventions and recent changes in patent law, such as the rise of biotech patenting since the early 1980s. Given the cutting-edge nature of biotech research and its equally innovative commercialization, this new field presents a moving empirical target for patent scholars and economists. This explains perhaps why recently published studies on patent thickets, at best, have found none, or, at worst, have been inconclusive. The Sewing Machine War thus serves in many respects as a cautionary tale. One lesson suggests that incremental invention of complementary elements of new technology seems to be a common feature of cutting-edge discoveries. From the sewing machine to automobiles to airplanes to radios, incremental innovation seems to be omnipresent in the historical evolution of science and technology. There was even incremental innovation in the invention of the incandescent light bulb, which, contrary to popular myth, was not discovered by Thomas Edison. Just as Isaac Singer invented only the final few elements of a practical and successful sewing machine, Edison invented only first practical incandescent light bulb. (Of course, both of these were tremendous achievements, and thus this is not meant to denigrate their inventive contributions.) In fact, Edison was even sued for patent infringement by one of the earlier inventors of the light bulb. Unlike Singer�s hapless luck with Walter Hunt, however, Edison was able to invalidate this earlier patent under one of the statutory requirements for a valid patent grant. Yet, decades later, the inventive cycle repeated itself again, as Edison was again embroiled in controversy, but this time it was with Nikola Tesla, who successfully patented and commercialized follow-on innovation to Edison�s own cutting-edge work in electrical power systems. Professor Michael Heller and other scholars have given passing acknowledgements to a few of these historical examples of incremental innovation and resulting patent thickets. As I noted in my introductory post, much of the chapter on patents in Heller�s [1]The Gridlock Economy is spent discussing alleged patent thickets in biotech. In fact, the only historical patent thicket to which Heller devotes anything more than a sentence or two is the airplane patent thicket of the early twentieth century. Coincidentally, this was also the only patent thicket that was solved through a public-ordering solution -- a compulsory patent pool imposed on the patent-owners by federal legislation. In fact, Heller devotes more time to discussing this legislatively coerced solution to the airplane patent thicket than to the nature of the patent thicket itself. Again, the underlying assumption is that patent thickets are a property problem to which a public-ordering regulatory model is the best solution. As commentators have pointed out in prior posts, especially in my first introductory posting ([2]Who Cares About the Invention of the Sewing Machine?), there are important differences between the nineteenth century and our modern digital age. The computer revolution was spawned by the invention of the integrated circuit in 1958 by Jack Kilby and Robert Noyce, and innovation in computer technology and related fields, such as biotech, has grown exponentially. This is technological growth that surely outpaces anything humanity has seen before. This is undeniable. But there are perhaps just as many myths about the significance of these differences as there are truths. For instance, one commentator claimed that a significant difference in the inventive activity between today and the nineteenth century is that hobbyists can work on computers in their garages today but that inventive work in the nineteenth century required massive capital expenditures. Yet Elias Howe and many other inventors in the nineteenth century, such as Charles Goodyear, Samuel Morse, Samuel Colt, and Eli Whitney, to name just a few, were what we would now call �hobbyists� -- people without formal training or full-time employment in the field of technology in which they hit inventive pay dirt. One could still argue that, compared with the potential success of a new computer technology, nineteenth-century industrial technology required massive upfront investment outlays -- what economists call �sunk costs.� This is certainly true with respect to railroads, steamboat fleets and, later in the nineteenth century, steel mills and industrial factories. But the investment dollars were there to be had for those with new ideas. Charles Goodyear, for instance, toiled for years after his invention of vulcanized rubber in 1839 to convince American firms of the value of his invention. Goodyear�s troubles were the same as those that affected Howe -- both inventors faced skeptical investors and commercial firms who had already lost boatloads of money on prior inventors who had claimed to have solved the technological problem. In fact, the nascent rubber industry experienced in the 1820s and 1830s a bubble that was equivalent to our own �dot com� bubble at the turn of the last century. Hundreds of thousands of dollars in investments went up in smoke when products made from pure rubber lost their cohesion in hot weather or became brittle in cold weather. Goodyear�s invention of vulcanized rubber solved these problems, but it was difficult for him to convince firms and the buying public after so many failures -- and such spectacular financial wipeouts. Goodyear struggled, but, more important, he succeeded. The sheer number of patents and the increased amount of inventive activity in the twenty-first century is another important difference between today and the nineteenth century. For instance, some have pointed out that Sewing Machine War was a manageable thicket insofar as it was resolved through an agreement between only four entities: I.M. Singer & Co., Grover & Baker, Wheeler, Wilson & Co., and Howe. Today, a patent thicket may comprise thousands of patents, which are owned by individuals or corporations spread throughout the globe. Yet the same technology that makes inventive activity and patenting more common also reduces the transaction costs in finding information and in coordinating commercial behavior. Word processing programs, email, and web-based searchable databases, such as at the U.S. Patent and Google, make it possible to research patents, communicate across the globe, and to reach deals quickly and efficiently in ways that Singer and Howe could have only dreamed about one-hundred-and-fifty years ago. Today, one can search every U.S. patent with a single click of a mouse, send email with proposed licenses as attachments, or FedEx a cease and desist letter in a fraction of the time it took in the nineteenth century. In the mid-nineteenth century, travel between Boston and New York City took a couple days, at best, by horseback (the most efficient method of travel over land). And, even after the telegraph was up and running by the mid-nineteenth country, it facilitated only minimal communication (via the dots and dashes of Morse Code). It is very hard for us today to imagine trying to search patents, negotiate licenses, litigate numerous lawsuits, or operate national commercial enterprises under such conditions -- as the sewing machine patentees all had to do in the Sewing Machine War! In sum, we must beware of anachronisms when we assess technological advances, commercial activities, and legal interactions in a bygone era that lacked, not just the problems of our technology, but also its benefits. To be clear, it bears emphasizing the empirical merits of the Sewing Machine War and its related features, such as Elias Howe�s roll as a non-practicing entity in this patent thicket. This is admittedly a single patent thicket involving a single commercial product. I would be committing the logical fallacy of a hasty generalization to draw definitive generalizations from this single data point. At a minimum, though, this case study serves as a cautionary tale against the assumptions that dominate the current discourse concerning patent thickets and closely related policy concerns, such as the impact of incremental innovation and the so-called complicating features of modern inventions. To wit, these are not modern phenomena that are necessarily best resolved with distinctly modern regulatory measures that restrict the property rights secured to patentees. They have long been features of the American patent system, which has long dealt with incremental invention and resulting patent thickets. In my next post, I�ll discuss the issue of �patent trolls� and patent litigation, and whether these have proven to be insurmountable problems to the resolution of patent thickets, past and present. References 1. http://www.amazon.com/Gridlock-Economy-Ownership-Markets-Innovation/dp/B0023RSZPU/ref=sr_1_1?ie=UTF8&s=books&qid=1241492970&sr=8-1 2. http://volokh.com/archives/archive_2009_04_26-2009_05_02.shtml#1240974253
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