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The Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s

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When Michael Heller proposed that excessively fragmented property rights in land can frustrate its commercial development, patent scholars began debating whether Heller’s anticommons theory applies to property rights in inventions.

Do “patent thickets” exist? The rise and fall of the first American patent thicket — the Sewing Machine War of the 1850s — confirms that patent thickets do exist and that they can frustrate commercial development of new products. But this historical patent thicket also challenges the widely held assumption that this is a modern problem arising from allegedly new issues in the patent system, such as incremental high-tech innovation and the impact of “patent trolls.” The Sewing Machine War exhibited all of these phenomena, proving that these are hoary issues in patent law.

The denouement of this patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the conventional wisdom that patent thickets are best solved through public-ordering regimes that limit property rights in patents.

The invention and incredible commercial success of the sewing machine is a striking account of early American technological, commercial, and legal ingenuity, which heralds important empirical lessons for how patent thicket theory is understood and applied today.

 

The Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s 
Arizona Law Review, Vol. 53, pp. 165-211, 2011,

George Mason Law & Economics Research Paper No. 09-19.

 

Google’s loss to Sonos settles it: Big Tech has an IP piracy problem

The U.S. International Trade Commission ruled on January 6 that Google infringed Sonos’ patented innovations in wireless speaker technology. This may sound like an obscure legal ruling about a complicated fight over intellectual property. But it confirms a problem that threatens America’s innovation economy and its international economic competitiveness.

The problem? Intellectual property theft.

Years ago, Big Tech companies like Google decided that they profit more by stealing smaller companies’ intellectual property than buying or licensing it. Google, Apple, Samsung and others — with cash reserves in the tens, even hundreds, of billions of dollars — do not sweat legal fees, court costs or even damages they might have to pay for this theft. Google has a reported $142 billion in cash in the bank. This is far beyond what most companies make in total annual profits.

Big Tech thus takes what it wants. It then uses scorched-earth litigation tactics to beat up on complaining IP owners. It drags out litigation over many years and imposes massive litigation costs on IP owners seeking justice. Many IP owners don’t even file a lawsuit. They know it is ruinous and self-defeating to try to protect what is rightfully theirs.

Simply put, Big Tech benefits from stealing IP. The legal costs and potential damages, if ever issued after years of litigation, are paltry by comparison.

A few companies have fought back, and the results confirm this predatory infringement practice. The story of Google’s abuse of Sonos is one of the more telling ones….

Read the full article at Tech Crunch.