[Adam Mossoff, guest-blogging, April 28, 2009 at 11:10pm] Trackbacks
Who Cares About the Invention of the Sewing Machine?

I first want to thank Eugene for inviting me to blog on the invention and commercialization of the sewing machine in the antebellum era. I've long been a consumer of the Volokh Conspiracy, and it's quite exciting to experience it from the producer's side. More important, I'm really looking forward to sharing my research and to receiving some valuable feedback. So, let's jump in!

As someone who writes on topics in legal history, I often face the question: Who cares? I appreciate this question, as I've always believed it's critical for an academic to connect abstract identifications to concrete reality. I will give an in-depth answer to that question at the end of my posts, after I have identified the facts of the invention and commercialization of the sewing machine that make it possible to infer lessons for the modern policy debates. For those readers who may not have a burning personal interest in the history as such, I hope this introductory posting will set enough of the modern policy context to keep you interested.

There is currently a raging debate in the patent literature about patent thickets. A "patent thicket" exists when too many patents covering individual elements of a commercial product are separately owned by different entities. This concept is not unique to patent law; it is based on Professor Michael Heller's theory of the anticommons in real property, which arises when there is excessive fragmentation of ownership interests in a single parcel of land. According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: It increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.

The debate centers on whether patent thicket theory accurately explains or predicts such problems in practice, and the empirical studies produced thus far are arguably in equipoise. In speaking about anticommons theory, Professor Heller acknowledges that "the empirical studies that prove — or disprove — our theory remain inconclusive." Nonetheless, in the patent literature and in the popular press, vivid anecdotes abound about patent thickets obstructing development of new drugs or preventing the distribution of life-enhancing genetically engineered foods to the developing world.

Given the heightened interest today amongst scholars and lawyers concerning the existence and policy significance of patent thickets, a historical analysis of the sewing machine patent thicket in the 1850s — called the "Sewing Machine War" at the time — and the denouement of this patent thicket in the Sewing Machine Combination of 1856 is important.

On one hand, it is an empirical case study of a patent thicket that (temporarily) prevented the commercial development of an important product of the Industrial Revolution. The sewing machine was the result of numerous incremental and complementary inventive contributions, which led to a morass of patent infringement litigation given overlapping patent claims to the final commercial product. The Sewing Machine War thus confirms that patent thickets exist, and that they can lead to what Professor Heller has identified as the tragedy of the anticommons.

On the other hand, the story of the sewing machine challenges some underlying assumptions in the current discourse about patent thickets. One assumption is that patent thickets are primarily a modern problem having to do with recent changes in technology and law. Professor Heller explicitly makes this point in his recently published book, The Gridlock Economy:

There has been an unnoticed revolution in how we create wealth. In the old economy — ten or twenty years ago — you invented a product and got a patent .... Today, the leading edge of wealth creation requires assembly. From drugs to telecom, software to semiconductors, anything high tech demands assembly of innumerable patents.

In fact, Professor Heller's first foray into patent thicket theory was in assessing an anticommons in "biomedical research," which he and his co-author, Professor Rebecca Eisenberg, saw as a logical result of extensive patenting of biotech research tools. Despite Heller's and other scholars' off-hand references to earlier patent thickets, the principal focus of the theoretical and empirical studies of patent thickets is on very recent inventions in high-tech and science — computers, telecommunications, and biotech.

A second assumption is that patent thickets are a property problem — too much property that is too easily acquired that results in too much control — and so they are best addressed by limiting the property rights secured to patentees. Specific proposals have called for eliminating contractual rights in patented drugs, authorizing federal agencies to terminate patent rights to avoid patent thickets, and even prohibiting the patenting biotech inventions altogether. Although the empirics have yet to confirm patent thicket theory, this has not stopped people from proposing numerous regulatory or statutory measures to redefine and limit property rights in patents.

The story of the invention and development of the sewing machine challenges these two assumptions insofar as it is a story of a patent thicket in an old technology. More important, it is a story of the successful resolution of a thicket through a private-ordering mechanism: a contractual arrangement in which patent-owners cross-license the right to use their respective patents. This cross-licensing contractual arrangement is called a "patent pool," and it so happens that the first patent pool in United States history was the one that brought the Sewing Machine War to an end: the Sewing Machine Combination of 1856. In fact, the Sewing Machine Combination successfully coordinated the overlapping property claims in the sewing machine until the last patent in the pool expired in 1877.

As I researched the Sewing Machine War, I further discovered that this particular patent thicket is an important case study because it encompasses many other issues in patent law that are often intertwined today with concerns about patent thickets. For instance, there was massive and costly litigation between multiple parties in multiple venues. One of the patentees in the Sewing Machine War engaged in an extremely costly search for evidence of prior inventions (what patent lawyers call "prior art") that would invalidate the other sewing machine patents. There was hard-fought and expensive satellite litigation in the courts and in the patent office. In other words, the Sewing Machine War reflected all of the concerns expressed today about an alleged explosion in out-of-control patent litigation, and yet one finds the same conditions existing in the patent system more than one hundred years ago.

Last, but certainly not least, I also discovered that the Sewing Machine War was precipitated by patent infringement lawsuits filed by Elias Howe, who was America's first "non-practicing entity" (NPE). As an aside, commentators and judges sometimes call a NPE a "patent troll." Interestingly, the term "patent troll" has proven extremely difficult to define with precision, and perhaps one of the lessons of the Sewing Machine War is that it is an unhelpful rhetorical epithet.

Elias Howe was a NPE, because he commercially exploited his patent by licensing sewing machine manufacturers. He also obtained injunctions against those who refused to pay him royalties, and given that Howe's 1846 patents was valid, he obtained many of these injunctions. This is interesting, because patent scholars, as well as some Supreme Court Justices, believe that "patent trolls" arose only recently and that they are undermining the proper functioning of the patent system. Such scholars and Justices may be surprised to learn how these so-called modern problems have long existed within the historically successful American patent system.

The Sewing Machine War came to an end with the voluntary formation of the Sewing Machine Combination. In this respect, the Sewing Machine Combination reveals how patent-owners have substantial incentives to overcome patent thickets, even in contexts in which so-called "patent trolls" are exploiting the strong enforcement of the property rights in patents. The Combination was formed though pre-existing private-ordering mechanisms, such as contract and corporate law, and not through judicial decisions, PTO regulations, or statutes that limited or restricted the patent-owners' property rights. In sum, the Sewing Machine Combination reveals the innovative ways in which patent-owners can rescue themselves from commercial gridlock, and in so doing, unleash an explosion in productivity and innovation.

In my next posting, I will discuss the invention of the sewing machine, which was an effort that took place over a hundred years (approximately from the mid-1700s to the mid-1800s). The result of this lengthy inventive process was that the sewing machine — a tremendous technological accomplishment — was developed through incremental inventive steps. By the early 1850s, the inventive contributions by so many different people over so many years resulted in a product in which there were many differing (and legitimate) property claims. This set the stage for the Sewing Machine War, and thus to understand how this thicket arose, it is necessary to identify its first cause. I will discuss this part of the story in my next blog posting.

(If anyone is interested in seeing the sources for the quotes and other factual claims in my posts, please feel free to download my paper, A Stitch in Time: The Rise and Fall of the Sewing Machine Patent Thicket, where you can see the sources in all their glory. As everyone who reads law journal articles knows by now, law professors love citations so much, we put them on almost every sentence, phrase and word. :) )