Hsieh and Mossoff on IP and Sewing Machines
The Sewing Machine War was the first instance of what is today called a “patent thicket.” The disputes prevented Singer from selling his invention, and tensions ran high in and out of court: When Howe personally called on Singer, Singer threatened to throw him down a flight of stairs.
But there’s a happy ending to the story, as your machine-stitched clothes evince. The Sewing Machine War ended with a just and lasting peace in 1856, when Orlando B. Potter–a lawyer representing one of the plaintiffs–suggested a solution that Mossoff calls “groundbreaking but also breathtakingly simple”: The patent-holders would combine their patents in a “patent pool” and share the profits from selling the machines. The patent pool participants lived happily and wealthily ever after—or at least until 1877, when the last patent expired.
The happy ending is that the holders of patent monopolies granted by the states pooled them to form a united front to quash competition. Thus larger companies erect barriers to entry, partially monopolizing a field, with the help of the monopolies granted by the state. Ironically, the state then turns around and uses its own antitrust law against them–as the article notes, “anti-trust legislation today would likely render a smartphone patent pool an impossibility.” (See my posts When Antitrust and Patents Collide (Rambus v. FTC); The Schizo Feds: Patent Monopolies and the FTC; The Schizophrenic State; Intel v. AMD: More patent and antitrust waste; Are Patents “Monopolies”?; Patents, Prescription Drugs, and Price Controls.)
Quoting Mossoff, the article says:
the fact remains that lawsuits are often no more than an invitation to negotiation. “Oftentimes the way a party signals to another party in one’s industry, ‘I’m serious about this–you need to speak with me,’ is by filing a lawsuit,” says Mossoff.
Ha! Extortion is an “invitation to negotiate.” The euphemisms for statist aggression are many and varied–collateral damage, and so on.
And most companies do reach amicable licensing agreements where they use one another’s technology for a fee.
Amicable! This means friendly. Yes. Very friendly to threaten to sue someone unless they pay you not to.
The article concludes:
So while the maze of patent lawsuits might seem like wasteful litigation, Mossoff cautions that the opposite might very well be true. Those who defend the patent system and intellectual property rights argue that it encourages innovation by ensuring that inventors get their due. “What the patent system is about is not what’s happening today or yesterday, but what’s going to happen tomorrow,” says Mossoff.
This seems to recognize that IP creates injustice, but that those who favor it think it’s worth it in the long run, for the sake of higher goals. This is exactly the structure of the argument normal statists use to endorse conscription, taxation, and so on–that the violations done to individuals are “worth it” for the greater good.
(For discussion of Hsieh and Mossoff see IP: The Objectivists Strike Back!.)