Arguably patents held back the airplane industry

The story goes that the Wright brothers were extremely aggressive about enforcing their patent rights, even though they weren’t innovating on them. The Wright monopoly caused American airplanes to suck enough that America flew European Airplanes in WWI. The government subsequently forced airplane manufacturers to form a patent-sharing consortium, after which the airplane industry took off. (Hurr hurr hurr)

However, The myth of the early aviation patent hold-up—how a US government monopsony commandeered pioneer airplane patents disputes that claim in favor of patents. I am skeptical for two reasons mostly based on the authors themselves. First, they argue that patent trolling is primarily a made-up phenomena by the government mostly because the lead author works at a company that seems sketch AF and might just be a patent troll themselves.

Spillover Effects of Intellectual Property Protection in the Interwar Aircraft Industry argues that
the effects of IP protection can be both direct (i.e., IP increases the incentive to innovate in areas where IP is granted) and indirect (i.e., IP increases or decreases innovation in areas where technology is either substitute or complement). We use the setting of the interwar aircraft industry in the United States to show that both effects are quantitatively important. In particular, granting IP protection for airframes increased the rate of innovation for airframes and decreased the rate of innovation for complementary aero-engines. We also show that this led to mergers between airframe and aero-engine producers.
Our results also add to existing work suggesting that in some cases IP protection may provide property rights to too many agents, creating patent thickets (Shapiro, 2000) and an anticommons (Heller and Eisenberg, 1998). While we do not argue that property rights are too strong in our setting, we highlight a cost of providing IP protection to weigh against potential benefits


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