Thursday, April 27, 2006

Catching patent trolls?

Note Elizabeth D. Ferrill, Patent Investment Trusts: Let's Build a PIT to Catch the
Patent Trolls, 6 N.C. J.L. & Tech. 367.

The text includes: For example, Glenn Curtiss and the Wright Brothers earned more than two million dollars in 1933 by licensing their foundational airplane patents. n105

In 1933, the Wright Brothers' key patent had been long expired, and Wilbur had been dead even longer.

Of the PIT in the title: Patterned after the existing REIT legislation, a Patent Investment Trust, ("PIT "), would be a corporation that trades and licenses patents rather than real estate.


Blogger Elizabeth Ferrill said...

If you follow footnote 105, it refers to a paper from the California Law Review (84 Cal L. R. 1293, 1344, n.174), which in turns refers to Manufacturers Aircraft Association, Inc. v. United States, 77 Ct. Cl. 481, 487 (1933).

This case outlines the patent pooling agreement between Wright-Martin Aircraft Corporation and Curtiss-Burgess Airplane & Motor Corp.. In the patent pool were basic airplane patents. The plaintiff in the case represented aircraft manufacturers.

In "July 24, 1917, the first corporate meeting of the plaintiff was held and, in accordance with the approved plan, a cross-license agreement, hereinafter called the 'agreement', was entered into by plaintiff [the association] and eleven manufacturers of airplanes...."

"The agreement required the plaintiff to pay the remaining 87 1/2 per centum of the royalties received from all sources in declared proportions of 67 1/2 per centum to the Wright-Martin Aircraft Corporation and 20 per centum to the Curtiss-Burgess Airplane & Motor Corp., Inc. The agreement also contained a provision to the effect that within the period prior to November 1933, whenever and if said 87 1/2 per centum payments to Wright and Curtiss had equalled a maximum of $2,000,000 for each, the rate of royalty to be paid to plaintiff was automatically to change to a sum not exceeding $25 an airplane."

Therefore, I think it is safe to say that despite Wilbur's death in 1912 (Orville didn't die until 1948), and even if some patents had expired by 1933, other basic airplane patents were still in effect and were subject to a lucrative patent pooling license.

2:47 PM  

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