Monday, September 10, 2007

Did the FTC accurately recount the history of Carlson and xerography?

The press release from the Coalition for Patent Fairness on 7 Sept 07 included the text:

The call for reform has been loud and vast with the Federal Trade
Commission [FTC], the U.S. Solicitor General, the National Academy of Sciences,
the Council on Foreign Relations, leading editorial boards and a wide
range of businesses ranging from high-tech to financial services to
traditional manufacturing all calling on Congress to act.

In October 2003, the FTC released a report titled To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy. Included within is a rather interesting statement about the invention of the xerographic process. It is in the format of the FTC citing to someone else, although it is apparent that the FTC did not check the accuracy of the statement. Specifically, at page 21 of the report, in a section about follow-on innovation in the face of a single blocking patent, the report asserts that Xerox’s photocopying technology developed out of an effort to design around Kodak’s silver halide photography patents. This simply is not true.

Within the legal academic literature, one can also find unusual statements about the invention of the xerographic process. For example, John F. Duffy, in Rethinking the Prospect Theory of Patents, 71 U. Chi. L. Rev. 439 (2004) wrote:

Seeking a better way to copy images, Chester Carlson, the eventual inventor of the xerographic process, decided to investigate electrostatic methods of copying because he knew that "a lot of big companies were deeply involved in research using chemical or photographic processes, and [in the inventor's words]--'Who was I to compete against Eastman Kodak.'" n97 Although today xerography is seen as a great invention of the twentieth century, that was not true even in 1959, nearly two decades after Carlson had received his first patent. Then, as Xerox was introducing its first plain-paper copier, the conventional wisdom was that the new machine would "find plenty of competition" in the "crowded field" of office copying, and that Xerox's business strategy was a "calculated risk" and a "gamble." n98 [page 464] That some such gambles pay off handsomely does nothing to demonstrate that rents are preserved, for the many less famous failures must be considered. n99 Any claim that competitive rivalry poses a diminished threat at some stage of technological development is speculation, supported by neither intuition nor empirical proof.

IPBiz notes that Chester Carlson worked on what would later be named the xerographic process because he believed it was better than the existing processes. Recognizing that he individually lacked the resources to develop his invention, he tried to make deals with other companies, INCLUDING Eastman Kodak, by using the patents he possessed.

Also in the legal academic literature, one finds Kurt M. Saunders, Patent Nonuse and the Role of Public Interest as a Deterrent to Technology Suppression, 15 Harv. J. Law & Tec 389 writing:

Footnote 199: Cf. William J. Abernathy & Kim B. Clark, Innovation: Mapping the Winds of Creative Destruction 14 RES. POL'Y 3, 4 (1985) ("What may be a startling break-through to the engineer, may be completely unremarkable as far as the user of the product is concerned."). In a similar vein, Judge Easterbrook recounts IBM's lack of interest in acquiring the rights to Chester Carlson's corona-charging patent, which enabled plain-paper photocopying:

Before Xerox Corporation made a fortune selling Carlson's photocopiers, his original licensee, the Battelle Institute, tried to raise development funds by selling a fifty percent interest in the invention to leading makers of office equipment. One potential buyer was International Business Machines Corporation. IBM commissioned a study by the best consulting firm money could buy; the consultants determined that there was no market for plain-paper photocopying, and after receiving this assessment IBM declined to invest. This was a spectacular blunder, but only in retrospect.

Frank H. Easterbrook, Cyberspace Versus Property Law?, 4 TEX. REV. L. & POL. 103, 107 (1999). For a collection of strange and (apparently) useless patents, including a water spray burglar alarm and an eye protector for chickens, see Michael J. Colitz, Jr., Wacky Patent of the Month, at (last visited Apr. 5, 2002).

IPBiz notes that BEFORECarlson made a deal with Battelle (and before Battelle was in the xerographic business at all), Carlson himself tried to make deals with major US corporations. Carlson offered the invention to more than 20 major corporations, including IBM, General Electric, Eastman Kodak and RCA, all of whom turned Carlson down, expressing what he later called "an enthusiastic lack of interest." These major corporations all turned down the opportunity to manufacture what Fortune magazine would describe as "the most successful product ever marketed in America."

Separately, Mark Lemley wrote of Carlson in Patenting Nanotechnology:

Chester Carlson, a patent attorney, invented xerography in 1938. Being a patent attorney, he immediately patented his invention and proceeded to patent a series of improvements. Fascinating Facts About the Invention of Xerography by Chester Carlson in 1938, (last visited Oct. 28, 2005). While one could dispute whether xerography is in fact an enabling technology in the sense I mean, it did open up a variety of fields and so is probably worth inclusion.

Lemley also wrote: By "enabling" technology, I mean to refer not merely to important new ideas or even ideas that create a new market, but only to tech-nological breakthroughs that facilitate a wide range of different exploitations. Obviously, the term is not capable of precise definition. It shares significant characteristics with what Brett Frischmann calls "infrastructure" technologies - those that may be consumed nonrival-rously, whose social value is driven primarily by downstream use, and for which there are a wide spectrum of such uses. Brett M. Frisch-mann, An Economic Theory of Infrastructure and Commons Management, 89 Minn. L. Rev. 917, 919 (2005).

IPBiz notes that Chester Carlson was not an attorney in 1938, but later graduated from New York Law.


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