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How Patent Law Held Back Communications Technology

Old telephone lines at dawn
Old telephone lines at dawn
Phyllis Eckhaus,
Manager of Foundation Relations,
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June 28, 2016

For all our professed democratic values, we Americans like to put big-talking, risk-taking guys on pedestals. And then reward them for their pioneering enterprise—even if their iconic American triumph consists of shrewd marketing and possible theft.

Forgive my rant. I’m recuperating from learning that Alexander Graham Bell arguably did not “invent” the telephone.

According to Invented by Law, Christopher Beauchamp’s intriguing case study of Bell’s patent and how it affected the early development of the telephone, Bell’s original patent application was “rife with improprieties.” On Valentine’s Day 1874, electrical engineer Elisha Gray filed a confidential “caveat” with the patent office, to protect his idea for “Transmitting Vocal Sounds Telegraphically.” It apparently sat in a pile. The very same day, Bell’s lawyer hand-delivered Bell’s competing patent application to the patent office—and got it time-stamped.

Bell and his partners almost surely got inside information and favorable treatment from the patent examiner, who was in deep debt to Bell’s attorney. By March 1874, when Bell famously did succeed in transmitting speech and summoning his assistant Watson, his supposed invention resembled not his original patent but that of his rival Gray, who—by virtue of that time-stamp—Bell had beaten to the patent office by hours.

Still, Alexander Graham Bell was widely celebrated as the genius whose invention “annihilated space and cuddled the cities of the Republic around a single fireside.” The Steve Jobs of his day, his legend reflects a public appetite for heroes, obscuring both his appropriations from others and the shady shortcuts that enabled his success.

This says less about him than about us. Success immunizes celebrated Americans from significant scrutiny, especially if they’re white, male, and wealthy. And even when they’re scrutinized, their celebrity luster remains undimmed—indeed, may even be enhanced by “bad boy” exploits. Look at Mark Zuckerberg, an American icon thanks to his “invention” of Facebook and $47.5 billion fortune. The Social Network showed Zuckerberg pilfering the Facebook idea from Harvard classmates who had hired him to write the software, and arguably the Hollywood blockbuster just added to his legend.

The “great man” narrative, attributing invention to individual genius, can lead us astray. It distorts and undermines scientific inquiry, which is a process. Beauchamp makes this point, but his almost exclusive focus on Alexander Graham Bell undersells this argument, which could be bolstered by other genius inventor myths. Perhaps you credit Samuel F.B. Morse with the invention of the telegraph. But what of physicist Joseph Henry, whose discoveries in the field of electromagnetism were the foundation of Morse’s work? Henry even developed an early telegraph, which he demonstrated to his Princeton students. But the good professor valued research and open inquiry over profit.

Beauchamp uses Bell’s story to examine the crucial role of patent law in shaping the history of an invention—who triumphs in the marketplace and the history books. Patent law, by allowing an individual or company to stake a claim to a piece of the continuous process of scientific inquiry, often frames the invention narrative we come to accept.

It can also undermine the public interest —in Bell’s time and today. In 2013, the ACLU went all the way to the U.S. Supreme Court to invalidate Myriad Genetics’ patents on two breast cancer genes—patents that not only made genetic testing for breast cancer exorbitantly expensive, but also stymied medical research because researchers needed to obtain prior consent from Myriad.

Myriad lost its patent battle. Bell’s legend survives because his patent lawyers prevailed. Bell’s brilliant attorneys went for the broadest possible claim, stepping away from the specifics of his original patent to contend that Bell had patented voice transmission. And in 1888, in a hugely controversial 4-3 Supreme Court split, Bell triumphed. The Court’s minority maintained that Bell only won because his years of fame had already cast him as a winner, noting that it is “perfectly natural for the world to take the part of a man who has already achieved eminence.”

Bell’s questionable patent gave Bell Telephone a monopoly on the American telephone industry that extended from 1876 to 1894, when his patent rights expired. Was the public well served? Beauchamp remains seemingly noncommittal as he accumulates evidence that the company’s profit motive subverted the public interest. Bell Telephone’s large-scale rate increases sparked populist fury—and state attempts at regulation were met with ruthless retaliation by Ma Bell. For example, in 1885, when Indiana sought to limit phone rates to $3 a month, the local Bell exchange ripped out a quarter of Indianapolis’ lines and the southern part of the state was left entirely without service.

Bell Telephone’s monopoly stifled the growth of phone service. There were 250,000 phones in the United States when the company’s monopoly ended. Five years later, by 1899, the number was over one million—and in the following five-year intervals the numbers leaped to three million and seven million.

Across the pond, Beauchamp notes, Sweden demonstrated what could happen without a patent law to enforce monopoly. Swedish engineer L. M. Ericsson developed his own version of the phone to compete with the Bell franchise—and by the 1890s, Stockholm had the highest number of telephones per capita of any city in the world. Ericsson’s firm “became a leader in innovation and export.”

The rationale for patents is that they promote invention. This claim seems doubtful, at least with regard to the telephone. A recent blog post by Sam Pizzigati reminds us of Dr. Jonas Salk, who invented the polio vaccine—and deliberately never filed for a patent. Pizzigati contrasts the public-spirited Dr. Salk with today’s patent-holding billionaires:

“Who owns the patent on this vaccine?” [journalist Edward R.] Murrow asked the newly famous doctor.
“Well, the people, I would say,” Salk replied. “There is no patent. Could you patent the sun?”

Beauchamp’s mild-mannered book avoids ideology, but to me it reads like a wonky addendum to The Big Short, the book and movie displaying capitalism run wildly amuck. Patent law, like finance, seems to have developed a culture of obscurity and expertise that serves to enrich a select few. “Trust us, we know what we’re doing,” they say. And we oblige, treating our profiteers like prophets and visionaries even when they screw us.

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