Nothing New Here: Patents and IP Holding Companies

You think that companies setup for the sole purpose of holding patents on intellectual property (IP) are a new pain? Think again. Way back in 1879 lawyer George Selden or Rochester New York started the patent process of the horseless carriage or automobile.

Sensing that the time was not right for a horseless carriage, he delayed issuance of the patent until 1895, by which time a young automobile industry was growing in the USA. Although he had no interest in manufacturing his invention, he was very interested in benefiting from it. Under threat of suit, almost all of the manufacturers took out licenses from Selden, or from the Association of Licensed Automobile Manufacturers (ALAM), to whom he sold the patent.

One manufacturer who refused to license the technology was Henry Ford’s motor company. There was a long drawn out trial before the patent was declared invalid for all but one specific type of engine that was actually not used by anyone making automobiles.

Who will be the Ford of the current generation? Who is strong enough today to stand up to the huge IP corporations and call their bluff? Of course it did help that in the late 19th century you had to produce a working model to get a patent. Perhaps we need to reconsider how easy it is to get a patent today.

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