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[Adam Mossoff, guest-blogging, May 1, 2009 at 11:58pm] Trackbacks
The Sewing Machine War -- The First American Patent Thicket:

The typical story of the Sewing Machine War is that the incremental invention of the sewing machine through complementary contributions by differing inventors now came to its full fruition with a litany of patent infringement lawsuits. However, Howe and Singer may have had something to do with this descent into full-scale legal warfare with their public announcement of the settlement of their "long and protracted legal controversy." In the August 12, 1854 issue of the Scientific American, for instance, they concluded their settlement announcement with the following dire warning: "We caution the public against buying any of the numerous infringer machines in the market. They all infringe one, and some of them several, of our patents, and those who attempt to use them will be prosecuted."

With Howe and Singer assuming this very aggressive litigation stance — now standing united together through their license agreement — it is perhaps unsurprising that the sewing machine manufacturers soon let loose a flurry of their own lawsuits. As one historian has observed, after Howe and Singer concluded their dispute, "all the sewing machine manufacturers got busily down to the job of suing each other out of existence.

Although it was no longer defending itself against Howe, I.M. Singer & Co. was soon defending itself against numerous patent-owners in more than twenty separate lawsuits filed in three or four different venues, including Philadelphia, the Northern District of New York, and the Southern District of New York. I.M. Singer & Co. was not just a defendant, as it filed lawsuits in federal court in Philadelphia against Grover & Baker and Wheeler, Wilson & Co., two of its main competitors in the sewing machine market. Howe was also soon defending himself in lawsuits in which he was charged with infringing the other elements of the fully practical sewing machine that had been invented by others.

The sheer number of lawsuits was not the only problem. These were patent infringement lawsuits, requiring testimony and documentation of detailed technical evidence concerning both the infringing product and the patented invention. The deposition testimony taken in a single lawsuit filed by Grover & Baker, for instance, was reported at the time to have "fill[ed] two immense volumes, containing three thousand five hundred and seventy-five pages" (emphasis added). In an age before computers, word processers or typewriters, producing more than 3,500 pages of legal transcripts for a single case was no small feat.

This was not an unusual case either, as Singer was reported to have "made a special closet to hold his [legal] files," and "Wheeler and Wilson had several closet shelves filled with testimony." An author of a nineteenth-century history of the sewing machine reported that he had pieced together Elias Howe's life story, in part, from having "gone over thirty thousand pages of printed testimony, taken in the numerous suits to which sewing machine patents have given rise" (emphasis added). One historian observes that "the continuing court litigation over rival patent rights seemed destined to ruin the economics of the new industry."

Although these details of the Sewing Machine War are well known, at least to some historians, no one has yet explained why this patent thick arose beyond identifying the fact that there were overlapping patent claims. But this does not by itself create a patent thicket. There have to be reasons why patent-owners assert their property claims against each other to the point of creating a litigation free-for-all, replicating the conditions of Thomas Hobbes's state of nature, in which life is "solitary, poor, nasty, brutish, and short."

From the historical record, it is possible to glean several reasons for the rise of the Sewing Machine War.

First, in the early 1850s, the sewing machine was not yet a commercially successful product, and there had in fact been numerous failures by both inventors and firms. On both sides of the Atlantic, Howe had attempted to secure financing to manufacture and sell his invention in the late 1840s, but failed. Even Sherburne Blodgett was skeptical of the commercial promise of sewing machines, although the Lerow & Blodgett firm was the first large-scale American manufacturer of sewing machines, which were produced under Blodgett's patent. In fact, it was a Lerow & Blodgett sewing machine on which Singer tinkered in 1850, leading Singer to make his contributions to this soon-to-be valuable commercial product. Yet, after I.M. Singer & Co. began selling the Singer Sewing Machine in late 1850, Blodgett reportedly told Singer that he was an idiot for trying to manufacture and sell sewing machines. Sewing machines simply would not work, Blodgett told him, and the only profit a sewing machine patentee could make was in selling territorial licenses in the patent itself.

Singer's early sales experiences confirmed Blodgett's pessimism, as he would later write: "I met with continual objections to the introduction of my machine from persons who had bought those of prior inventors and had thrown them aside as useless, and in some cases was showed out of the stores where I called as soon as my business was made known by me."

Second, in addition to the well-grounded skepticism of the buying public about the practicality of a sewing machine, there were cultural forces at work in nineteenth-century America that created roadblocks to the efficient adoption of sewing machines throughout the sewing trade. Thimonnier's story was well known to Americans, and the spirit of the French luddites who had destroyed Thimonnier's Paris workshop and had hounded him out of the country was appearing in pockets of American resistance to the sewing machine. One nineteenth-century article observed how tailors opposed the sewing machine, because they "thought it would beggar all hand sewers, and refrained from using it on principle"

Moreover, there was a strong cultural bias against the use of machines by women — the principal source of hand-sewing labor in the nineteenth century. For instance, Singer at first dismissed the entreaties of his business partners in 1850 to tinker with the Lerow& Blodgett sewing machine, responding in his usual hotheaded manner, "What a devilish machine! You want to do away with the only thing that keeps women quiet, their sewing!"

Although Singer eventually acted against his chauvinism, he was not alone in thinking such things, and the luddites who were agitating the sewing unions used these widespread prejudices to reinforce their arguments. An address to the Shirt Sewers' and Seamstresses' Union warned of the "disastrous consequences" to the hand-sewing female laborers resulting from the mass adoption of the sewing machine in the sewing trade, arguing "that peculiar branch of industry which exclusively belonged to women — that industry which developed itself in the facile and pliant use of the fingers — would be totally extinguished." In sum, in the early 1850s, the financial success of the sewing machine was still an abstraction, but the prior failures, the skeptical public, and existing cultural prejudices were a concrete reality.

Third, in contrast to the practical and cultural difficulties in successfully commercializing sewing machines, Howe succeeded brilliantly in the infringement lawsuits he began filing in 1852. As a result of his injunctions and licenses, Howe was in control of the nascent industry and was making money hand over fist, or at least it seemed as such to the firms who were paying royalties to Howe while struggling with the vicissitudes of the new sewing machine market. In 1852, Howe's patent, which had done nothing for the past six years to remedy the inventor's extreme poverty, was now producing an income of "a few hundred dollars a year." By 1860, he claimed to have earned $444,000 in profits from licensing his patent, which he attested to in his application for a seven-year extension of his patent term (which was granted). When Howe's patent finally expired in 1867, as a result of his participation in the Sewing Machine Combination, his royalties totaled more than $2 million.

Such extensive licensing profits led one anonymous writer in 1867 to complain that Howe had "been overpaid for his inventive labors." As some patent scholars would say today, Howe exploited "royalty stacking" to obtain license fees exceeding his incremental contribution to the sewing machine (he did contribute only 3 out of the 10 total elements of a successful sewing machine). By the early 1860s, Howe had not yet manufactured a single sewing machine, but he was one of the most financially successful patentees out of the hundreds of patents that had been issued on sewing machines by that time.

It was perhaps understandable that the other patent-owners perceived this non-practicing entity — the inimitable "patent troll" — to be flourishing through his use of lawsuits, injunctions and licensing, as they watched their own attempts at manufacturing actual sewing machines flounder in both the market and in court. They likely attributed the key to Howe's success, however slight by the mid-1850s, to his apparent disavowal of manufacturing and his pursuit of royalties as his sole source of profit.

This was more historical accident than careful strategic business planning on Howe's part, as he had attempted but failed to commercialize his patented invention, but that is not how the other sewing machine patentees probably saw it. A good subjective intent does not necessarily translate into actions that are objectively distinguishable from another person acting with bad intent. As lawyers well know, divining someone's intent is often a troublesome evidentiary (and metaphysical) issue, and thus objective actions more often than not are used as proxies for intent. In the Sewing Machine War, Howe's objective actions spoke loudly. As evidenced by the 1867 article in The Galaxy Magazine, most people attributed "the secret of Mr. Howe's success" to the fact that "he litigated himself into fortune and fame."

Of course, as a result of the sewing machine's provenance, as one mid-nineteenth-century book remarked, "it is now utterly impossible to make a sewing machine of any kind of any practical utility without directly infringing several subsisting patents, the validity of which cannot by questioned." The result was an explosion in lawsuits as these myriad patent-owners, such as I.M. Singer & Co., Lerow & Blodgett, Wilson, Wheeler & Co., and others, attempted to claim their rightful slice of the royalty pie. In so doing, they created the first American patent thicket.

David Drake:
I'll add another to the chorus of "thank yous" for this series. Interesting for fans of history, technology, business, or the law.


And for once, all the comments (so far) have been on point and free from acrimony. Professor, you've wrought a minor miracle!
5.2.2009 11:20am
tom:
Agreed. This is fascinating stuff; thank you for sharing this with us VC readers.
5.2.2009 2:23pm
BZ (mail):
Wonderful story, and masterful writing. Thank you.
5.2.2009 5:25pm
epeeist:
Ditto, thank you very much for this series. I find it particularly interesting that the pro-competition solution was an anti-competitive trust...(presumptively, at least now and given the probable price-fixing referred to).
5.3.2009 12:43am

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