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Famous Patent Wars: 1900-1950


Famous Patent Wars-1900-1950.jpg

Continuing our analysis of famous patent wars, we look at the first half of the 20th-century. (We covered three of the most important patent wars between 1850 and 1900 in Part One).

At the dawn of the 20th-century, the foundations of modern transportation and communication were being created in garages and workshops. As collective knowledge about internal combustion engines, wind resistance, electricity, material science, radio waves, propulsion, the atmosphere and gravity expanded, scientists and inventors were able to solve problems faster. Modern investment markets improved their access to capital, while modern communication meant that news of their discoveries and advances could be celebrated and shared faster.

If their inventions were “big” enough and promoted well, an industrializing world would enthusiastically welcome them as fans and customers. The stakes were high, the potential rewards huge, and the egos of many of the principal figures even larger. It shouldn’t be surprising, therefore, that some of the most famous patent wars between 1900 and 1950 include the names of some of the most famous inventors in American business history.

 

Automobile Patent War (1895-1911)

Automobile Patent War-Henry Ford and Selden Patent. IPfolio.com

The origin of the automobile patent war was U.S. patent No. 549160, the so-called Selden Patent. It was issued in 1895 to patent lawyer George Selden for an "improved road engine" powered by "a liquid-hydrocarbon engine of the compression type."

Selden’s invention was an adaptation of George Brayton’s internal combustion engine, which he had seen demonstrated at the Centennial Exposition in Philadelphia in 1876. Seiden returned to Rochester, NY, spent two years making a much smaller multi-cylinder version, and finally submitted his application in 1879. By filing amendments for 16 years, he delayed its granting until 1895 when an automotive industry had begun to form.

In 1899, Selden sold the rights to the Electric Vehicle Company (EVC), after which they pursued licensing agreements with aspiring manufacturers. A year later, they targeted the largest American automobile manufacturer at the time, hoping that a landmark victory would influence smaller companies to follow the market leader.

As the case against the Winton Motor Carriage Company dragged on during 1902 and other independent automobile makers tired of the high royalty payments, an association called the Manufacturer's Mutual Association (MMA) formed. Within a year, however, what was originally conceived as a defensive collective became a cartel. In 1903, the MMA rebranded itself as the Association of Licensed Automobile Manufacturers (ALAM), welcomed Winton as a member, and signed an exclusive licensing deal with EVC. Despite never contesting the patent’s validity, the independent manufacturers believed it gave them de facto dominion over the nascent auto industry, and the power to run it as a private club.

Hell Hath no Fury Like a Ford Scorned

By controlling the Seiden patent, ALAM claimed the right to choose who could manufacture gasoline-powered cars for a 1.25% royalty per vehicle. Licensed vehicles bore a "Manufactured Under Selden Patent" plate near the engine. The denial of an ALAM membership application meant that you couldn’t secure a Selden licence, and you were likely to be sued. This protectionism strategy was ultimately the ALAM’s downfall because Henry Ford was unwilling to roll over.

Ford, who had previously failed with two car companies, launched a third in 1903. As soon as the new Ford Motor Company opened, he applied for a Selden license. It was denied and he was duly sued. The case took six years to come to trial. Ford lost the first round in September 1909, but ultimately prevailed on appeal in January 1911. Although the Selden patent was validated, it was restricted to cars made to its specifications.

The Selden patent reportedly generated about $5 million in royalties, none of which came from Ford, who once told a reporter that his greatest ambition was to be “a free man.” Ford realized this ambition by optimizing manufacturing processes to deliver cars such as the Model T at a price within reach of millions of excited customers. The ubiquity of all-black cars manufactured by the Ford Motor Company also ensured that the hopeful dream Selden described in his original patent application actually materialized:

"The object of my invention is the production of a safe, simple, and cheap road locomotive, light in weight, easy to control, and possessed of sufficient power to overcome any ordinary inclination.”

Additional Reading:

Automotive News: Landmark Patent Case Broke Selden's Lock on Auto Industry

The Chicago Daily Tribune: Selden Patent Lose in Court 

 

Airplane Patent War (1906-1917)

Airplane Patent War-Glenn Curtiss. IPfolio.com

The airplane patent war should really be characterized as a Wright Brothers v. Glenn Curtis dispute shaped by a “cooperate or else” nudge from the US government. It’s also an enduring example that the existence of prior art, of which there was plenty, doesn’t always prevent inventors from patenting an invention.  

As Orville and Wilbur Wright were tinkering in Dayton, OH and dreaming of powered flight, Glenn Curtis was building ever-faster motorcycles in his Hammondsport, NY workshop. While the brothers were enjoying their post-Kitty Hawk fame, they were acutely aware of the potential for heavier-than-air flight, and the rewards for owning the rights to the critical IP required to keep a plane safely in the air.

Orville and Wilbur’s inventiveness was rewarded in 1906 when they were issued US patent 821393 for a "Flying Machine." Their application described the invention of a system of aerodynamic control to change the shape and in-flight characteristics of airplane wings. Despite prior art covering rudders, elevators and ailerons, the brothers were successful.

From the Telephone to Powered Flight

Supported by the fortune earned from his telephone inventions, Alexander Graham Bell had also turned his attention to powered flight. In 1907, he co-founded an aeronautical research group called the Aerial Experiment Association (AEA). Bell, who considered Curtiss "the greatest motor expert in the country," invited him to join. Curtis contributed his engine expertise, mechanical genius and courage as an engineer, mechanic and test pilot.

During its two-year existence, the AEA built four planes, each of which used the same aileron design described in the Flying Machine patent. The AEA’s third aircraft, June Bug, was designed and piloted by Curtiss. In 1908, he made the first official one kilometer straight-line flight in North America and won the Scientific American Trophy. The AEA disbanded a year later when Curtiss founded the Herring-Curtiss Company to build and sell commercial aircraft.

Orville and Wilbur saw potential in commercial aircraft and partnered with several well-known financiers, including Cornelius Vanderbilt, to found The Wright Company. Launched in late-1909, it pursued a two-step licensing and litigation approach with varying results. Although their key patent was invalidated in Germany due to prior knowledge, the Wrights did sign some licensing deals in France. Similar agreements were signed in North America with both manufacturers and air shows. Curtiss simply refused. This refusal and his early success establishing the Herring–Curtiss Company as a serious competitor earned the Wright’s unrelenting enmity.

Imitation is the Sincerest Form of Flattery

Airplane Patent War-Wright Brothers. IPfolio.com

 

Wilbur and Orville - like Steve Jobs in the 21st-century - were incensed by the idea that a competitor had simply ripped them off. They sued Curtiss and won an initial victory, which was duly appealed. Despite Wilbur’s premature death in 1912, Orville continued to pursue what he viewed as justice. It appeared to arrive in January 1914 when a U.S. Circuit Court of Appeals upheld the verdict in favor of the Wrights.

The Herring–Curtiss Company, however, had a Plan B, which was suggested by Henry Ford’s lawyer. It quickly announced that it had devised a new method of flight control, one that it claimed did not infringe the Wright’s patent. Although the 1914 decision had not considered Claim 1 of the Flying Machine patent, the Wright’s legal team believed that it did cover Curtiss’ new method. Before the year was over, the Wright Company again sued Curtiss to seek an injunction by asserting that the new aileron design infringed Claim 1. The second case dragged on until 1917 when the US government stepped in.

The US was about to enter the First World War without any suitable aircraft because the animosity between the dominant patent holders had prevented development of newer aircraft. A government committee formed by Franklin D. Roosevelt, then-Assistant Secretary of the Navy, decided a patent pool was the best solution. As a result, almost every American aircraft manufacturer joined the Manufacturer's Aircraft Association and contributed its patented inventions to the war effort.

Orville was only indirectly involved by then. He’d sold The Wright Company in 1915 and remained as a director. It merged with the Glenn L. Martin Company and rebranded as Wright Aeronautical in 1919. Finally, Wright Aeronautical merged with the Curtiss Aeroplane and Motor Company on July 5, 1929, to become the Curtiss-Wright Corporation.

Additional Reading:

TIME: The Wright Brothers: Pioneers of Patent Trolling

Air & Space Magazine: Oldies and Oddities: Where Do Ailerons Come From?

Air & Space Magazine: Where is the Wright Brothers’ Patent?

Centennial of Flight Commision: Glenn Curtiss and the Wright Patent Battles

 

Radio Patent War (1903-1943)

Radio Patent War-Guglielmo Marconi-IPfolio.com

The invention of radio narrative is usually reduced to a narrow “Marconi vs. Tesla” over-simplification. The truth is far more complicated and includes a much larger cast of individuals and organizations.

Nikola Tesla is the pure science hero. Arriving in New York in 1884 with an electrical and mechanical engineering background and little money, he began working for Thomas Edison on direct current generators. Within two years, he quit to begin a peripatetic journey during which he invented and patented hundreds of advances in alternating current, power transmission, electric motors, generators, wireless transmission, and radio.

Guglielmo Marconi, an Italian aristocrat who moved to Britain and later to America, is the applied science hero. He was an Italian aristocrat with money, connections, business acumen and rare scientific abilities. He also shared the 1909 Nobel Prize for Physics. By developing, demonstrating and marketing the first successful long-distance wireless telegraph, then making smart business decisions, he created one of the most dominant companies in the world.

Electricity and the Telegraph

Wireless communication and electricity are linked, and Tesla had unique abilities to understand both. During an 1893 lecture, he detailed the principles of radio broadcasting. Three years later, Marconi demonstrated a wireless system in England using a ground connection, antenna, and other equipment that closely resembled the system Tesla had discussed in his lecture. Marconi then applied in England for, and was granted by the British government, the world's first wireless telegraphy patent (No. 12039), “Improvements in Transmitting Electrical impulses and Signals, and in Apparatus therefor.”

Tesla continued his research in America, and received the first USPTO radio patent (No. 645576). A "System of Transmission of Electrical Energy" was patented on March 20, 1900. A second patent, "Apparatus for Transmission of Electrical Energy” (No. 649621) for propagating "natural medium from one point to another remote point therefrom" by transmitting signals was issued on May 15, 1900.

In late-1900, Marconi filed a USPTO patent application for the same invention described in his English patent. It was initially rejected due to Tesla’s invention of the induction coil and his already-issued patent. Marconi persevered for another three years until a stunning surprise; the USPTO changed its evaluation in June 1904 and granted him a patent for "Apparatus for Wireless Telegraphy" (No. 763772).

Most radio patent war summaries focus on three years; 1915, 1916 and 1943. On Aug. 4, 1915, Tesla finally sued Marconi for infringement. The result was negligible because Tesla lacked both the desire and financial resources to seriously fight Marconi (or anyone else) in court. The 1916 reference begins with actions by the United States government. Due to the urgency and necessity of war readiness, the government had openly infringed on multiple radio patents. The The Marconi Company sued for damages as a result.

Summaries then typically jump to 1943 and a split Supreme Court decision that declared the Marconi patent invalid, yet affirmed prior work and patents by Tesla, Oliver Lodge, and John Stone. The decision, announced during the middle of World War Two, was a long and tortuous end to a case that had begun when the US Navy was trying to ensure its readiness for World War One.

Commercializing Technology

Marconi was a far more astute businessman than other inventors working on radio. He founded the Wireless Telegraph and Signal Company in 1897. In 1912, it relocated as the Marconi Wireless Telegraph Company to New York to take advantage of the publicity effect of the Titanic sinking. Thomas Edison became an advisor. Eight years later, it became part of RCA through acquisition.

Marconi's wealth and business success is an important part of history of radio patent litigation because it enabled him to pursue competitors with a far greater zeal than anyone else. While Tesla toiled in his lab, he employed a network of litigators to go after others who had made important contributions - most of which were patented, though not effectively protected - to the science of radio. Damages and injunctions were won against multiple competitors, including National Electric Signalling Company, Kilbourne & Clark Manufacturing Company, De Forest Telephone & Telegraph Company, and Atlantic Communication Company.

Cynical Marconi supporters might claim that the Supreme Court’s 1943 decision was a solution to avoid paying millions in damages. Equally cynical opponents could also point out that Marconi had used an improperly granted patent to successfully assert against competitors for years.

Additional Reading:

PBS: Who Invented Radio?

United State Early Radio History: Nikola  Tesla: The Guy Who DIDN'T "Invent Radio"

Missouri Law Review: Tesla, Marconi, and the Great Radio Controversy: Awarding Patent Damages without Chilling a Defendant's Incentive to Innovate


 

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