Tuesday, January 26, 2016

Edison as a patent troll, re-visited in 2016

In 2006, LBE published the article Edison as a Patent Troll, or Where is California Going in Stem Cell Research? . At the time, the Wall Street Journal had recently asserted:

[that U.S. patent law is] "deterring research and penalizing innovation," [and that the patent system is] "fast becoming a detriment to U.S. competitiveness, not to mention basic fairness."

link: http://EzineArticles.com/221598

Ten years have gone by, and the Wall Street journal is saying much the same thing. Separately, the California taxpayers spent a lot of money on CIRM, with no cure for anything produced.

One side argument that went on in the CIRM discussion concerned the patents of the University of Wisconsin/WARF related to embryonic stem cells. There was a call by some Californians for a patent pool, with reference to the aviation patent pool created in World War I. In 2009, LBE posted a comment on californiastemcellreport:

Making an innovation, which really changes the way we live, is harder than merely making an invention. Incentives must be offered. Simpson would be advised to note the words of Lincoln:

The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.

In the past, Simpson has been confused on the
"production" issue (eg, there were no US-built fighter planes in World War I). If California taxpayers really want tangible, functioning therapies PRODUCED, there must be incentives. Otherwise, the "product" will be academic papers.

link: http://californiastemcellreport.blogspot.com/2009/03/timing-right-for-sharing-wealth-on.html

The Simpson in question is John M. Simpson, then Director, Stem Cell Oversight and Accountability Project,
Consumer Watchdog

Consumer Watchdog brought us the interesting CAFC case on lack of standing of third party non-competitors to appeal the loss of a re-examination proceeding.

See also Patent thickets and the Wright Brothers

**As to the 2006 article, the economic significance of patents on embryonic stem cells has more or less passed by, with the current hot item in biotech the CRISPR patent wars. Some issues from the past re-exams (e.g., enablement of prior art) are likely to reappear in the Doudna fight.

**Returning to Simpson's idea that a "patent pool" is a good thing, one might contemplate Edison's activities in the motion picture arena, specifically related to the formation of The Motion Picture Patents Company [the MPPC].

As noted at edison.rutgers.edu:

[I]n 1907 the courts upheld Biograph's camera patent. This allowed Biograph to operate without the threat of further Edison litigation. In this environment several industry leaders suggested that they form a trade association based upon an umbrella of Edison, Biograph, and Armat patents. The Edison and Biograph companies stood to benefit not only from the reduced competition but also from the substantial royalties that they would receive on their patents. Edison and Biograph executives could not, however, agree on the relative importance of their respective patents. Consequently, the industry split into two rival groups. (...)

In late December 1908, after months of negotiation, the Edison and Biograph groups formed the Motion Picture Patents Company. This corporation licensed nine producers and one importer: Edison, Biograph, Vitagraph, Lubin, Selig, Pathé, Essanay, Kalem, Méliès, and the Kleine Optical Company. For a few months a monopoly seemed possible, then new commercial opposition arose outside the "trust."

Motion pictures, unlike the aviation industry right after World War I, were booming, and in 1909, the Independent Motion Picture Company formed from those left outside of the MPPC patent pool, known by some as the "Edison Trust."
The demise of the MPPC happened in United States v. Motion Picture Patents Co. on October 1, 1915, with the MPPC found to violate the Sherman Antitrust Act. It is curious to note that the aviation patent pool was formed AFTER the bad experience with the MPPC. See also Motion Picture Patents Co. v. Universal Film Co., 243 U.S. 502 (1917). See also Antitrust in the Motion Picture Industry by Michael Conant

** Thomas Edison has been labelled a "patent troll" in some articles.

For example, in 2014, in Slate, Thomas Edison Was a “Patent Troll”, including the questionable text:

Even after he became widely successful and famous—known as the “Wizard of Menlo Park”—Edison still participated in the secondary market, such as selling his patented innovation in incandescent light bulbs to the General Electric Co. (as discussed in a recent biography).

IPBiz notes General Electric was formed through the 1892 merger of Edison General Electric Company of Schenectady, New York, and Thomson-Houston Electric Company of Lynn, Massachusetts, said merger done by J. P. Morgan. Unhappy with the result of the "war of the currents," J.P. Morgan forced Edison (not his patents) out of the company. The light bulbs used at the Columbian Exhibition at Chicago in 1893 were all Westinghouse bulbs and the electric power was the AC of Westinghouse and Tesla.
Adam Mossoff's statement in Slate is silly.


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