What Patent Situation?
accounts of the “patent wars,” followed by Walcott’s alarm to the “patent
situation” have been interpreted by many historians to show that the growth of
the American aviation industry was stunted by patent gridlock, beginning with
the Wright patent. In their article “The myth of the early aviation patent
hold-up — how a US government monopsony commandeered pioneer airplane patents,”
authors Ron Katznelson and John Howells surveyed the pioneer American aviation
industry and charted its activities. Their findings show that production,
patents, and investment were all on the increase in the years preceding 1917 in
anticipation of increased orders for war materials. The market had not responded
negatively to the 1913 decision of Judge Hazel that granted the patent pioneer
status or the 1914 appeals court that upheld Hazel's adjudication.
Nor was it overly affected by the Wright-Martin letter demanding royalties for that patent. Members of the industry repeatedly told the government that they stood ready to fulfill increased wartime orders, should they ever materialize. In truth, Wright-Martin’s 5% licensing fee was not outside business norms. European manufacturers typically paid more for use of aeronautical patents. Nor was the U.S. military opposed in principal to paying licensing fees. At that time it was paying patent license fees for other war materials, including an 18% fee for machine guns. The objection that the military had to the Wright-Martin patent fee seems to have been based on the high cost of each airplane (even without the royalty fee attached) and the sheer volume of airplanes needed.
In short, there was no gridlock; Walcott’s “patent situation” did not exist. His message to the president and its consequence was, at best, an overreaction to the Wright-Martin letter brought on by years of media hype surrounding the Wright patent and the patent suit the Wright Company had brought against Curtiss. At worst, it was an attempt by the industry’s largest customer – the U.S. military – to control the market.
The Patent Wars