Were the Wright Brothers Patent Trolls? One View of R Street Institute’s Capitol Hill Panel on Patents

By Lydia Malone
October 16, 2019

“Knowing that our perspective on the patent system is not the only one, we had hoped this would be an opportunity to learn more about the other side and participate in an honest discussion between the two…. Unfortunately, honest intellectual discussion was jettisoned, and the hour was filled with propaganda and disinformation.”

wright brothers - https://depositphotos.com/64468005/stock-photo-wright-brothers-national-memorial.htmlThis article has been updated to include a statement from R Street Institute.

On Tuesday, I attended a panel discussion on the National Security Implications of Patents along with my siblings, Madeline and Gideon Malone, and we were informed that inventors like the Wright brothers pose a threat to innovation. We were joined by approximately 50 attendees at the Capitol event moderated by Charles Duan from R Street Institute, along with panelists Abby Rives from Engine, Daniel Takash from Niskanen Center, and Ian Wallace from New America. They argued that patents harm innovation, and government subsidies are a better alternative to incentivize innovation. In order for R Street (a free-market think tank) to justify these blatantly anti-free-market claims, they focused on the problems with “bad patents” and how patent monopolies prevent competition. To top it all off, their example of a “bad patent” was the one granted to the Wright brothers, which the panelists felt unreasonably excluded their competitors from making improved versions of their airplane.

Frankly, we were dismayed by the poor quality of the analysis and reasoning presented by the representatives from these institutions and we sincerely hope that this is not how our national innovation policy is developed. On the other hand, it could explain the bizarre legal experience our family just endured. Anti-patent efforts such as the America Invents Act and the creation of the Patent Trial and Appeal Board (PTAB) could only have been accomplished with the help of the largely spurious patent troll narrative that has dominated the conversation on patents. We felt somewhat justified in witnessing one of the ways this narrative has been circulated. Knowing that our perspective on the patent system is not the only one, we had hoped this would be an opportunity to learn more about the other side and participate in an honest discussion between the two. We expected to be challenged with new information and cogent reasoning. Perhaps the patent system is not working as intended for some, and this seminar would inform our own efforts to improve it for inventors. Unfortunately, honest intellectual discussion was jettisoned, and the hour was filled with propaganda and disinformation.

Patents Aren’t Subsidies

The first problem with the arguments presented is the idea that patents are a form of government subsidy. The panelists from Engine and Niskanen repeatedly referred to patents as nothing more than a subsidy. Patents aren’t subsidies. Subsidies are grants the government gives to private companies, while patents more closely resemble contracts. They’re not gifts from the government but exchanges in which both parties provide value. The inventor agrees to release to the world the details of their invention in exchange for temporary ownership of the commercial rights to it. The beauty of the patent, and most likely the reason it is mentioned in the constitution, is that the benefit it gives to the inventor is directly proportional to the benefit the inventor gives society. If we relied on government money to reward inventors, we would have taxpayers’ dollars wasted on bad ideas while good ideas might be overlooked because the government failed to foresee their value. Why not let the market decide what an invention is worth?

If the Wright Brothers Were Patent Trolls, Who is a Legitimate Inventor?

A second major flaw in the panel discussion was the idea that there are countless bad patents being enforced by patent trolls. The logic is simple: examiners are human, and humans make mistakes; therefore, examiners make mistakes, and bad patents are issued; therefore inventors like the Wright brothers are patent trolls. One of the panelists actually told us that the Wright brothers were an example of patent trolls because although they invented the first type of airplane, they claimed to have the rights over all types of airplanes that followed. He claimed that because the Wright brothers enforced their patent, American aviation was lagging behind during WWI. Where would American aviation be without the Wright brothers? What planes would exist to be improved? Any fifth-grader can tell you that the Wright brothers invented the airplane. It’s absurd to claim that two of the most significant inventors in all of history were just “patent trolls.” If the Wright brothers were patent trolls, then do legitimate inventors even exist? The panelists conveniently ran out of time before we were able to ask this question.

Government Does Not Know Best

The next false claim made by the panelists is that government subsidies are a better incentive for innovation than patents. They made the claim that not only are patents one of many incentives for innovation but that patents are the most harmful and least efficient of them all, and according to Daniel Takash, it is flawed to rely on patents as a necessity for innovation. R Street, while claiming to be a free-market think tank, supports the idea of increasing government subsidies to incentivize innovation. The overall stance of the panel was that innovation will just happen anyway. If they asked an inventor maybe they would get a better understanding of how untrue that is. Inventors will not invent without patents. They cannot risk, invest, and work for free. The Wright brothers did not throw away their money and time on aerodynamic testing without the hope that they could get paid for it. But the panelists believe that government funding of the prototype phase alone would’ve been sufficient to pay the brothers for the decades of benefit society continues to enjoy. They concluded that we should abolish patents and begin centrally planning the subsidization of research and development for all innovation, all in the interests of their “free market”.

If the government has to predict future innovations in order to subsidize them, the only innovation we get in the R Street world is obvious incremental improvements. We all agree that obvious innovations should not be patentable, and yet that’s all that government subsidies would be able to incentivize. The R Street “solution” would really just contribute to the exact problems they’re complaining about.

The panel’s primary example, the Wright brothers, proves them wrong.  New ideas are unique in that they haven’t been tested in any market, yet we are expected to trust bureaucracy to predict the innovations we need, find the best candidates to create those innovations, and accurately assess the value of that non-existent invention? Interestingly, this is exactly what we tried in the case of the Wright brothers, and the government subsidized the wrong guy. This case of misguided incentives is summed up by Lee Habab and Mike Leven in their brilliant National Review article – “Who better to win the race for us, thought our leaders, than the best and brightest minds the government could buy? They chose Samuel Langley.” Contrary to the false narrative espoused by the October 15 panel, subsidies sunk Langley’s prototype in the Potomac river, and patents gave us manned flight. Of the millions of individual inventors in America, how can a giant federal bureaucracy predetermine which will succeed and how much we owe them when they do? Only a patent can do this. Anyone who advocates for the free market knows that the government can’t be trusted to plan how our economy should grow, and although they avoid saying it explicitly, R Street wants us to put future innovations in the hands of our government. As we learn from the Wright Brothers example, patents incentivize free individuals to innovate; government subsidies fail.

Not So Free-Market

It seemed to us that the entire panel discussion was just a way to convince the 50 people in that room that patents are anti-innovation. By describing patents as a subsidy, they avoided the issue of property rights and the moral wrong of stealing someone else’s invention. By telling stories of overbroad patents and constantly referring to patents as a dangerous monopoly, they created a fear around the idea of patents and a need to find an alternative. And throughout the discussion, the panelists repeatedly claimed that patents aren’t the only way to incentivize innovation. The unstated but implied conclusion is that we should work to replace privately funded invention backed by patents with centrally planned, publicly funded innovation. We expected more from R Street, given our sympathy for their mission “to engage in policy research and outreach to promote free markets and limited, effective government”.

With contributions by Madeline Malone and Gideon Malone

R Street Responds

In an email sent to IPWatchdog on Thursday, October 17, the R Street Institute noted the following errors in this article. “First, it attributes multiple statements to R Street that correctly should have been attributed to the panelists, who are not affiliated with R Street,” said Ann Phelan, Associate Director, Communications at R Street Institute. “Furthermore, the article misstates the position of R Street and the panelists by saying they ‘concluded that we should abolish patents’; the panelists expressly rejected that position during the panel.”

R Street plans to submit a guest post to IPWatchdog responding in more detail to these apparent misrepresentations of its position.

Image Source: Deposit Photos
Photography ID: 64468005
Copyright: actionsports 

The Author

Lydia Malone

Lydia Malone is a student at Liberty University (online) pursuing studies in public policy and is an intern with US Inventor. She recently moved with the Malone family from Texas to Alexandria, Virginia to carry out the mission of US Inventor. She is the daughter of Josh Malone, the inventor of Bunch O Balloons. Since the invention took off, Lydia and her family have been immersed in the world of innovation, patents, and politics.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 26 Comments comments. Join the discussion.

  1. Concerned October 16, 2019 5:57 pm

    The government has been giving contracts to many private companies for decades and no solution on the problem my claims solved. In fact it cost those governments dearly and also the families who were financially harmed.

    It was hard for me to even dignify my response to R Street’s assertions. Clearly this institution cannot be serious with their views, a hidden agenda has to be in play.

  2. AAA JJ October 16, 2019 6:09 pm

    McCollough’s biography of the Wright brothers is excellent and does a masterful job of explaining the absolute genius of their invention.

  3. Paul Johnson October 16, 2019 6:37 pm

    “We pose that these arduous patents are a means by which to slow and inhibit American companies from achieving success in the race to 5G and continued leadership in AI.”
    https://www.rstreet.org/event/national-security-implications-of-patents/

  4. Pro Say October 16, 2019 7:24 pm

    . . . leads one to wonder how many R Street members and audience members and their family members are currently taking (just look at all the pill bottles in their travel bags) — and have in past years taken — currently or originally-patented drugs to cure and prevent infectious diseases, strokes and heart attacks; along with a large and amazingly diverse panoply of other diseases.

    Patented medicines which have kept — are keeping — them and various of their family members — from early graves.

    Patented medicines which — were it not for our (previously gold-standard) patent system — would never have received the billions of dollars needed to create and develop them.

  5. tlddr October 17, 2019 1:14 am

    In my view, one of the most fundamental errors in thinking that government grants will better encourage innovation . . .

    A patent is a reward for success. You don’t get paid until you succeed.

    A grant is a payment until you succeed. That is, once you succeed, no need for any further grant money. One can clearly see that the incentive with grants is NOT to invent, but to delay and show just enough “progress” or “promise” to get the next grant, because once you succeed, the money is gone.

    In conclusion, patents incentivize success, while government grants incentivize delays.

  6. Jeff Hardin October 17, 2019 1:48 am

    This is brilliant.

    This “panel discussion” replete with fear mongering against inventors and patents reminds me of the “panel discussion” I witnessed in Austin with Director Iancu present:
    https://www.ipwatchdog.com/2019/03/20/cta-preaches-patent-troll-fairy-tale-chat-iancu-sxsw/id=107539/

    I was the only inventor in the room.

  7. Ron Katznelson October 17, 2019 6:36 am

    The R Street panelists argued the oft-repeated fable that the Wright Brother’s patent “unreasonably excluded their competitors from making improved versions of their airplane.” This patent hold-up assertion is a baseless myth created by government officials in 1917 and propagated ever since by “scholars” promoting the “patent troll” narrative. The historical evidence reveals otherwise — that during those years, there was a surge in patenting of aircraft improvements. In that period, the U.S. government was essentially the only customer for more than 15,000 airplanes produced in this country and no aircraft manufacturer was prevented from freely exploiting the Wright patent. In my paper with John Howells, we describe detailed evidence showing the unabated industry growth and that none of the aircraft manufacturers were liable for patent infringement owing to a 1910 law which fully protected them from any liability as suppliers to the U.S. Government.

    Read our full paper: “The Myth of the Early Aviation Patent Hold-Up,” Industrial and Corporate Change, Vol. 24(1), pp.1-64, (2015). Available at SSRN: https://ssrn.com/abstract=2355673

  8. Larry Glaser October 17, 2019 6:51 am

    Concerned writes “…hidden agenda has to be in play”. No kidding? I had an app delay for 13 years. Cost me $ 600,000 in legal fees. Why was it delayed? Ex Parte complaint from a huge company that my invention predated theirs and they did not want it to issue as a US Patent. I can name the names. Plain and simple. My witnesses were Lawyers at a huge firm. Next comes US 7462485. Every imaginable insult has come, gone and all but stripped away the core invention. Other foreign companies walk in, get cash prizes in the US. Government funds 20 million dollars to rush this to market. (falsely, they spent your money on something they do not have the rights to, Qui Tam) Examiner let the Government team double patent, steal trade secrets and to get the patent, even the Government team falsified who they say invented it and when it was invented. (They had a prior attempt which failed, they let it go “public domain” and the refused to list it as prior art to their next attempt) Everything major (violation and wrong) my Counsel(s) have coached me never to do, they did. Now the Government thinks it has Bayh Dole rights. No, it does not. And the technology is stunning, make the cover of the NY Times Science edition. https://archive.nytimes.com/www.nytimes.com/imagepages/2007/03/26/science/20070327_VIRAL_GRAPHIC.html?action=click&contentCollection=Science&module=RelatedCoverage&pgtype=article&region=EndOfArticle This behavior is the next click down the false justification pathway…. see it, steal it. No matter how well the inventor protected themselves. It’s a KING GEORGE moment for the USA. If this is out system, truly, just tell the inventors. Be honest with them. It reminds me of Wall Street. Insiders at public companies have to disclose their sales. 1934 Securities Exchange Act. Never repealed. Oxley Sarbanes mandates the insiders disclose their sales or go to prison. So how could these insiders sell, never disclose it to this day, and get away with it? SEC, FINRA and the Exchanges know. Nothing done. Our Government fell. Long ago.. (see 06 civ 170 sd ny sas) You (and I) are concerned about the erosion of our Patent system. Some suspect a deeper agenda. It’s way way way past all that… I hope you can see it now. When 55000 US accounts turned up at UBS Warburg, accounts who had not paid any federal taxes, about 4000 were prosecuted. 51000 they never say what happened. Suddenly, the Clinton Foundation got Millions in Donations, a 30 Million Dollar loan and wild Bill got paid millions to ***speak***. We have a DOJ and FBI shattered, misdirected and CIA….who knows what team they are on? Inventors likely come way last on the list of concerns now. Russia has weapons aimed at us, right now, which the Clintons helped create. Directly. Deep State and the Swamp have iron fist control. Nothing can stop them now.

  9. MaxDrei October 17, 2019 10:31 am

    Instead of arguing that all patents are bad versus all patents are good, let us debate where the boundary of patentability should fall. Consider patents in the worlds of finance, fashion and marketing. Is it not so, that the pre-eminence of the USA in these fields has accrued without any help from the Patents Act, and that it might be more hindered than helped, if every creative thought of every couturier, every algorithm of a hedge fund devisor or every Madison Ave film director could patent their creations?

  10. Curious October 17, 2019 12:36 pm

    Is it not so, that the pre-eminence of the USA in these fields has accrued without any help from the Patents Act, and that it might be more hindered than helped, if every creative thought of every couturier, every algorithm of a hedge fund devisor or every Madison Ave film director could patent their creations?
    Oh Lord … look what the cat dragged in. Unsurprisingly, we get nothing useful but a belief disguised as a question.

    It is a simple bargain … a disclosure in exchange for (non)exclusive rights for a limited time. Our esteemed European patent shill cannot put forth any explanation as to why such a bargain would not promote the progress of these fields any more or less than such a bargain would promote the progress of fields more directly associated with what is more commonly described as “technology.”

    You have creative and intelligent people in all of these fields that are creating new and useful inventions — be it “things” or methodologies. Why should the inventor of a new widget that aids someone practicing their golf game be given a patent while someone who creates a better financial product not be afforded the same protection?

  11. Greg J Owoc October 17, 2019 12:48 pm

    To L. Glaser: Clever HIV virus trap bio emgineering innovation !

  12. Anon October 17, 2019 2:56 pm

    MaxDrei @ 9,

    Your inclusion of finance is completely out of place.

    Have you ever heard of Deming and how his work catapulted American productivity (and — without question — fully belongs in the Useful Arts(?

    As I know that you have been informed of this previously, I can only take your comment here in the negative light of dissembling.

  13. Jam October 17, 2019 5:14 pm

    “But the panelists believe that government funding of the prototype phase alone would’ve been sufficient to pay the brothers …”

    But would the brothers even bother to build a prototype if that’s all they got? Of course, they’d also get the satisfaction of watching overly capitalized corporations make millions with their idea without paying them anything.

  14. Liberty October 17, 2019 6:13 pm

    The Wright Brothers nor Nickola Tesla or Thomas Edison or Alexander Graham Bell would be given a patent in today’s Anti patent America.

    Silicon Valley have slammed the door shut behind them and have hijacked patents all for them selves. Silicon Valley elites like Apple Google and Amazon take inventors IP with out any recourse as the rule of law no longer works, as FAANG helped push laws through like the AIA Act, PTAB EBay, Alice,Mayo,TC Heartland, Oils cases. The discusting part is how Silicon Valley have managed to buy up the Republicans and Democrats to help keep their anti patent rhetoric strong as there is no more compensation IN licensing a inventors invention. Sen Tillis is working on fixing 101 but will cave out a sweetener in 112 to help the theft continue. My advise IS do NOT file for a patent in America and look to Germany where the courts still work and protect the small inventor.Good luck

  15. TESIA THOMAS October 17, 2019 10:47 pm

    Thank you for this article. I am, like many other credentialed and non-credentialed innovators, possibly hurtling toward getting worked over by the government.

    It’s pitiful to watch. Engineers existed before the Engineering Degree.

    Govt loves funding The Paper Belt (Degree mills) to spend Fed Reserve Paper.
    Congress goes, “Whee!! Funding the best and brightest and charity [most unis are nonprofit].” Uni shills say, “Gooo Bayh Dole success!”
    American taxpayers have personal problems and hardly balance their own checkbooks anymore, much less worry about government R&D spend.

    If you inherit half the decency of your father then our generation’s in a good place…to keep fighting…

  16. Dave Barcelou October 17, 2019 11:32 pm

    Larry Glaser #8

    You hit the nail on the head. Make your thing better/cheaper/faster and get out.

    IP is DOA

    *Speaking from MILLION$ in bad experience, after bad experience, after bad…

    P.S. Way to foster the narrative Josh -_-

  17. Paul Morinville October 18, 2019 8:06 pm

    Dave Barcelou, it’s not Josh. It is one of his very smart and observant daughters. Any dad would be proud of her thoughts, writing and guts to put it out for scrutiny and comments.

  18. Ternary October 19, 2019 12:21 am

    The following may require a bit of reading, but it illustrates the ideological opposition to patents. Sometimes the name of James Watt pops up as the one who obstructed innovation in engine technology because of patents that he asserted.

    The original steam engine was invented by Newcomen in 1712. The machine was an atmospheric engine, which means that steam pressure never exceeded atmospheric pressure. A cylinder was filled with steam and condensed by cold water creating a vacuum that caused a piston under atmospheric pressure to move into the cylinder. James Watt invented the external condenser that allowed a more efficient (and mobile) steam engine. Watt added other elements like the double acting machine. However, Watt stayed away from high pressure steam, the next step in steam technology.

    There is a 2009 article at https://mises.org/library/james-watt-monopolist that describes how Watt allegedly prevented high pressure steam engine innovation by asserting his patents. In 2011 an article was published (https://www.jstor.org/stable/10.1086/658495?seq=1/analyze) that debunked the myth of Watt’s Innovation blocking monopoly. Even funnier, it explains how Watt’s blocking patents on atmospheric engines probably accelerated introduction of high pressure steam engines to circumvent his patents.

    So, 1) allegations of patents as being “innovation blocking” are a known and well tried attempt to diminish the value of patents;
    2) do not believe any assertion of patents being a hindrance to innovation. Usually it reflects a deep misunderstanding of how innovation takes place and misrepresents the state of science/technology based on hindsight usually driven by ideological reasons (sounds familiar?) Usually, authors of these articles expect or hope that their readers will not fact check and just spout their nonsense as “historical research” or “scientific research.” (sounds familiar?)

    Many of the anti-patent crowd are true nutcases. I am always surprised on the amount of nonsense that they assemble to come up with a crazy story to support their views. The amazing thing is that there are people who distribute these stories as being factual. However, the most astonishing thing is that they seemingly always get serious hearings at Congress.

  19. B October 19, 2019 3:34 pm

    I’m sure the USPTO and CAFC would invalidate the Wright Brothers’ patent(s) under Alice/Mayo. They took advantage of natural laws and it was the only known method of powered flight.

  20. AAA JJ October 20, 2019 11:32 am

    The Wrights wrote a letter to Octave Chanute in 1900 asking for information about powered flight. They had a falling out with him in 1910. In a letter Wilber wrote to Chanute in January 1910, he said, “Neither in 1901, nor in the five years following, did you in any way intimate to us that our general system of lateral control had long been part of the [flying] art…If the idea was really old in the art, it is somewhat remarkable that a system so important that individual ownership of it is considered to threaten strangulation of the art was not considered worth mentioning then, nor embodied in any machine built prior to ours.”

    The folks over at the professor’s site would of course respond with, “It was so obvious nobody ever even bothered to write it down or make it!!!!” That is of course the only “evidence” they have whenever they conclude, with their remarkable 20/20 hindsight, that something was obvious.

    The Wrights won all 9 suits they brought. And the 3 that were brought against them.

  21. TESIA THOMAS October 20, 2019 2:00 pm

    @AAA JJ,

    The Wright Brothers’ story is an extremely interesting case study for inventors. A lot of lessons to be learned.

    And it’s a wonder that writing was invented so important information was less likely to be lost or misinterpreted. Chanute liked the game of “telephone.”
    It’s a wonder we have so many textbooks, religious books, and encyclopedias today. And the internet! Texting!

    I’m sure even trade secrets are written down somewhere.

  22. Ron Katznelson October 20, 2019 4:11 pm

    AAA JJ @20 makes a key point worth amplifying. In Wright’s day, it proved impossible to fly without infringing the Wright patent; attempts to fly a non-infringing aircraft ended in a crash, injuring the pilot (see New York Times, 22nd April, 1914, p6); and Paulhan’s attempted design-around the Wrights’ patent ended in both of his planes crashing. (See Johnson, “Wingless Eagle” p. 105 (2001)).

    Even so, ascribing value only to the production of products but none to their invention and the underlying intellectual property — the “patent troll” narrative — appears to have originated then by a government agency’s free-riding effort against the Wright patent. This narrative more than a century ago is described in my article linked above (@ 7), p19: The NACA (the predecessor of today’s NASA) asserted that “any adequate return to the Wright [patent holders] must be through the manufacture and sale of airplanes, airplane engines, etc, and not through patent channels.” It insisted that “any return from patents must necessarily fade into insignificance …” That statement candidly epitomized today’s anti-patent narrative, ascribing no value to patent rights.

  23. AAA JJ October 21, 2019 8:59 am

    “I’m sure even trade secrets are written down somewhere.”

    It better be written down somewhere or you can’t prove it’s your trade secret. That would pretty much sink your case right then and there.

  24. TESIA THOMAS October 21, 2019 10:45 am

    @AAA JJ

    You’re right. That makes the whole thing just that much more ridiculous.

    If you’re interested, I’d like for you to take a look at what I’m currently going through:
    http://www.zipintothefuture.com/lets-see-if-i-receive-a-reply/

  25. Randy Landreneau October 21, 2019 2:38 pm

    Great article, Lydia! Back in 2015 when we were fighting the Innovation Act, there was a lunch for staffers in the US House. I think it was put on by R Street. This is where they trade free lunch for a captive audience to propagandize. It was billed as “We don’t want to hurt inventors, we just want to stop the Trolls.” One of the speakers actually said that Eli Whitney was the first patent troll! That says everything. Apparently, if you spend your time and resources to invent something valuable, you should be willing to just give it away. If you believe what the US Constitution says about your ownership of that invention, you are evil. Could there be a more anti-American viewpoint? Shame on those who have destroyed the rights of inventors in America!

  26. Paul Morinville October 28, 2019 1:13 pm

    This is the world when the wright bros lived in when they were inventing. So many people tried. So many failed.

    https://www.youtube.com/watch?v=iMhdksPFhCM

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