The Wright Brothers, Patents, and Technological Innovation
We remember the Wright brothers for their skill at invention, but luckily their vision of the aircraft industry did not take off. In December 1903 the Wright Flyer made its fateful flight over the sands of Kitty Hawk. Unsatisfied with their achievement, the Wrights continued to work on improving the Flyer and practicing at Huffman Prairie, near Dayton. In 1906 they received patent number 821,393 for their “flying machine.” Complications began soon afterward.
The Flyer embodied solutions to a massive set of problems that the Wrights ingeniously solved. Perhaps their cleverest achievement was figuring out how to maneuver the craft, through a method of wing-warping not unlike riding a sled down a snowy hill. The pilot, on his belly, twisted nearly the entire airframe in the direction the plane was to turn. It was awkward, but it worked.
Aiming to improve maneuverability, Alexander Graham Bell suggested to another aviation pioneer, Glenn Curtiss, that he investigate ailerons. These evolved into the familiar flaps on the rear of wings and tailpieces that move, while the rest of the wing remains fixed. In 1908, Curtiss’s June Bug used ailerons to fly about 3,000 feet.
The Wrights interpreted their patent as covering the entire craft and believed that Curtiss had infringed on it. They became tenacious defenders of what they saw as their rights to their invention, and made Curtiss one of many defendants. By the time the decision was handed down, Wilbur was dead and Orville had sold his share of the business. When the Wright firm won again on appeal in 1915, it was clear that potential competitors needed to tread carefully in their designs or face the Wright Co. in court, where success was unlikely.
The brothers’ motivation in the inventing process seems to have been the sheer determination to develop a flying machine. Once it flew, they were fully aware of its value, for example in military use. When the War Department came calling in 1907, their initial price was a hefty $100,000 for a single plane. The government balked, and then opened up bidding to other makers. The Wrights came down to $25,000 and got the sale.
Government interest and patent rights collided on the eve of World War I. The War Department expected in the near future to need large numbers of aircraft, which no one wanted to make for fear of being sued by what was then the Wright-Martin Co. Anxious to prevent the war effort from being bottled up before it could start, Congress moved to condemn the Wrights’ patent.
In response, aircraft manufacturers formed a patent pool. Members of the pool agreed to share patents and provide royalties for a time to the Wright and Curtiss firms after which current and new patents would be shared royalty free.
This unusual arrangement could have been interpreted as a violation of antitrust law, but fortunately it was not. It served a clear economic purpose: preventing the holder of a single patent on a critical component from holding up creation of an entire aircraft. Practically, the pool had no effect on either market structure or technological advances. Speed, safety, and reliability of US made airplanes improved steadily over the years the pool existed (up to 1975). Over that time several firms held large shares of the commercial aircraft market: Douglas, Boeing, Lockheed, Convair, and Martin, but no one of them dominated it for very long.
Governments can encourage technological progress by establishing and enforcing property rights to invention. Governments can also suspend such property rights in cases of extreme threats to the national security. But in this case, it was critical for the U.S. government to let the airplane manufacturers sort out how best to protect their patents while enabling production of aircraft for wartime uses. By doing that, rather than unilaterally changing patent rights after they had been granted, the government acted prudently to secure both war materiel and advances on the technologies first developed by the Wright brothers.
John E. Murray is an associate professor of economics at University of Toledo. This article originally appeared as The Buckeye Institute's August Perspective.
