Before there were trolls, there were sharks

With all the news about patent trolls, you may find this bit of history interesting — from Patent Alchemy: The Market for Technology in U.S. History. Apparently, in the 19th Century, a similar phenomena occurred – labeled sharks:

The best known examples of such predators targeted railroads and farmers. In the case of railroads, a shark named Thomas Sayles bought rights to three overlapping patents for “double-acting” brakes that had been issued initially to three different sets of inventors. Whenever a railroad licensed one of the patents, Sayles would sue it for infringing on the other two. In response to these and other, less notorious claims, the railroads banded together in trade associations to take joint legal action. Battling Sayles all the way to the U.S. Supreme Court, they won an important victory in 1878 in which the Court effectively limited the amount that sharks could extract by ruling that infringers were liable only for the incremental benefits they garnered from using a particular invention over possible substitutes.
In the cases involving agriculture, the outcome was mixed. During the 1870s and ’80s western farmers were deluged with threats of legal action if they refused to pay licensing fees for a range of devices they were using–from barbed wire to milk cans to plows to drivewells (basically, pumps attached to pipes driven into the earth with a sledge hammer.) These cases seem to have flourished because there was uncertainty about the value and legitimacy of many of the patents on such devices, and because farmers in the more remote parts of the country were still prey to the kinds of unscrupulous itinerant agents described above. Like the railroads, farmers banded together in associations to fight the harassment in court. In the case of drivewells, farmers eventually managed to get the offending patent invalidated. In other cases, for example barbed wire, they repeatedly lost in the courts. Nonetheless, the farmers’ increasingly well-organized opposition took its toll on the sharks’ business–first, by raising the litigation costs involved in enforcing patent rights, and second, by changing the political environment in ways that discouraged local officials from aiding patent owners. By the time the Populist movement swept through the region in the 1890s, the problem had significantly abated.

The paper does not mention one of the later and important anti-patent activities, however. I’m referring to the fight by Henry Ford to break the Shelden patent on the automobile (actually on the internal combustion engine) and overturn the Association of Licensed Automobile Manufacturers. (See Monopoly on Wheels: Henry Ford and the Selden Automobile Patent.) Had that patent not been thrown out, it is unclear that the auto industry would have developed into a mass consumption industry as it did.
Does all this sound familiar?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s