The standard justification for patent protection is that without this government-granted monopoly, innovations will come to an abrupt halt. People only innovate with the expectation that they will make money, and this form of economic protectionism is therefore necessary in a capitalist economy.
So say the great expositors of crony capitalism, anyway.
But when one begins to study the history of technology, the patent demonstrates quite clearly that such protection is a roadblock to innovation, rather than the driver of it. I can cite numerous examples of this (firearms, television, etc.), but I believe the most telling history is that of the airplane.
According to our textbook histories, the Wright brothers are hailed as the inventors of the airplane. To say that this is an exaggeration is generous. Orville and Wilbur Wright offered an important innovation that served as a step toward sustained flight – namely, they developed a system for controlling the airplane by twisting the wings of a plane – but after taking aircrafts a step forward, the brothers spent most of their career making sure that no other innovations could follow. This is because what standard histories call “the invention of the airplane” is really just the government grant of a patent.
The patented technology was important, but it still required serious improvement before the airplane could become a viable means of transportation. But with their patent in hand, the inventive brilliance of these two men transferred from designing new machines to developing legal strategies to prevent anybody else from improving on their innovations. Time magazine refers to the Wright brothers as “patent trolls.”
Most of the great innovations in flight did not come from the Wright brothers but, instead, came from their greatest competitor, Glenn Curtiss. Although the Wright brothers were the first to make a successful controlled flight, they refused to demonstrate this ability to the public. Instead, they patented their technology and guarded their innovation jealously, all while Glenn Curtis was busy innovating publicly and with no great fear of people “stealing” his ideas.
In the first two decades of the twentieth century, Curtiss developed several innovations in flight – far surpassing the Wright brothers’ wing-warping novelty. In fact, to circumvent their patent, he developed his own system of controlling flight that is the predecessor to the modern technology: the aileron.
The Wright brothers claimed that the aileron – what was then referred to as a “horizontal rudder” attached to the wingtip – infringed on their 1906 wing-warping patent. Instead of continuing to improve on their own invention, the Wrights spent their energy in the courtroom by filing lawsuits against every design Curtiss made.
Glenn Curtiss, meanwhile, was less concerned with patents and more concerned with innovation. He responded to the Wrights by constantly redesigning and improving his airplanes – including coming up with more innovations, such as lightweight engines and planes that could land and takeoff from the water. He spent a fortune deflecting all of Orville and Wilbur’s legal challenges, all while continuing to advance the technology of flight.
But if Curtiss was winning the contest of innovation, the Wright’s would win the legal competition. Eventually, the courts ruled that any of Curtiss’s designs could not legally be sold unless he obtained a license from the Wright brothers and paid them a twenty-percent royalty on every plane he manufactured. By this time, he had a slew of airplane designs – each one better than anything the Wright’s could produce – but he was not legally allowed to take them to market without a license the Wright brothers were unwilling to sell him.
With their government-granted monopoly secure, the Wright brothers became the sole manufacturer of airplanes in the United States. And like many such industrialists – with a market artificially protected from competition – they lacked any incentive to improve their product. This, of course, is the exact opposite effect that patent-apologists claim to be the purpose of patent protections.
The status of the airplane industry in the United States continued to be stagnant until the United States government finally decided to take action to incentivize further improvements. With the onset of World War I, the outdated Wright planes were being rapidly eclipsed by German engineers who were not subject to the Wright monopoly protections. When the U.S. entered the war in 1917, it had a vested interest in the improvement of the airplane, so it all but repealed the Wright patent. The government reduced the Wright royalties from twenty percent to only one percent, and more importantly, it removed Orville’s power to sell or withhold licenses to his competitors (Wilbur Wright died in 1912, leaving the patent solely in the hands of his brother).
With the patent protection held by Orville Wright effectively done away with, the United States finally saw an explosion of innovation in the airplane industry – many of which were innovations that already existed but were artificially prevented from being brought to market. Contrary to standard patent theory, the Wright brothers were not incentivized to innovate because of the prospect of patent protection, but they did use their patent rights to stifle innovation both within their own company and the innovations of any potential competitors who dared to improve on their design.
