Journal Article

The myth of the early aviation patent hold-up—how a US government monopsony commandeered pioneer airplane patents

Ron D. Katznelson and John Howells

in Industrial and Corporate Change

Volume 24, issue 1, pages 1-64
Published in print February 2015 | ISSN: 0960-6491
Published online March 2014 | e-ISSN: 1464-3650 | DOI: http://dx.doi.org/10.1093/icc/dtu003
The myth of the early aviation patent hold-up—how a US government monopsony commandeered pioneer airplane patents

More Like This

Show all results sharing these subjects:

  • Property Law
  • Technological Change; Research and Development
  • Antitrust Issues and Policies
  • Economic History
  • Manufacturing
  • Law and Economics
  • History of Manufacturing and Construction

GO

Show Summary Details

Preview

The prevailing historical accounts of the formation of the US aircraft “patent pool” in 1917 assume the US government necessarily intervened to alleviate a patent hold-up among private aircraft manufacturers. We show these accounts to be inconsistent with the historical facts. We show that despite the existence of basic aircraft patents, aircraft manufacturers faced no patent barriers in the market dominated by government demand. We show that the notion of the aircraft patent hold-up is a myth created by government officials and used to persuade the Congress to authorize eminent domain condemnation of basic aircraft patents. Government officials used the threat of condemnation to impose a depressed royalty structure on aircraft patents and induce key patent owners to enter a cross-licensing patent pool. We show that this cross-licensing agreement was not an archetypical private patent pool, but had been structured to suit the preferences of the government as monopsonist; it imposed on private suppliers to the government a nearly costless technology transfer.

Keywords: K11; K39; N42; N62; N82; O31; O33; O34; O38; L44; L62

Journal Article.  27018 words.  Illustrated.

Subjects: Property Law ; Technological Change; Research and Development ; Antitrust Issues and Policies ; Economic History ; Manufacturing ; Law and Economics ; History of Manufacturing and Construction

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.