A MARTÍNEZ, HOST:
How do inventions happen? NPR's Planet Money's team brings us the history of one underappreciated invention that has enabled countless other inventions, from the Phillips screwdriver to Bluetooth. You can call it the invention invention. Planet Money's Sam Yellowhorse Kesler takes us back to the start.
SAM YELLOWHORSE KESLER, BYLINE: The sewing machine. The person who made the sewing machine famous was Isaac Merritt Singer.
MICHAEL MATTIOLI: He was described by some people as an irascible scoundrel.
KESLER: Michael Mattioli is a law professor at Indiana University who studies the history of innovation. He told me, one day back in 1850, Singer is in Boston. And he sees this rudimentary sewing machine in a shop.
MATTIOLI: And the story goes that he saw this machine and said, I could do better.
KESLER: Singer took it back to his workshop to redesign it.
MATTIOLI: He came up with the idea that you could have a straight needle that would be suspended from an arm.
KESLER: Singer patented his invention, the Singer sewing machine. But it was the Industrial Revolution. Many people were also inventing and patenting all kinds of things, including other versions of the sewing machine. A sewing machine war starts brewing.
MATTIOLI: Elias Howe Jr. fired the first legal shots in the war.
KESLER: Some call him the first patent troll, someone who invents something, doesn't actually make it, but sues others who do. He sued Singer, Singer fought back, other inventors got involved. It became this big court battle.
MATTIOLI: Singer had to make a closet to store all of his legal files.
KESLER: This created what's known as a patent thicket. All these lawsuits over patents stopped people from actually making things. It's bad for innovation. They needed a new way to think about ideas, an invention for inventions. It was Singer's lawyer who intervened. He said, what if we took all of these patents and pooled them together?
Every time someone wants to make a machine, they pay a little fee and everyone gets a cut - the patent pool. Patent pools have a moment after the sewing machine. Like, the Wright brothers joined a pool to make airplanes for World War I. There's one for radio broadcasting, oil refining, glass jars. But right from the beginning, it was clear they were good for cooperation, but also good for collusion.
MATTIOLI: There was a lot of skepticism and outrage about the possibility that we're looking at a cartel.
KESLER: Yeah, when a bunch of companies decide, we're going to work together and set prices, that is what a cartel looks like in the world of economics. Around the mid-20th century, a few court cases tried to limit the collusion, and as a result, patent pools kind of faded away. Until, that is, the dot-com era, and a new wave of patent thickets arose. Specifically, a group of companies trying to standardize digital video in the '90s went and made the case to the government for the patent pool. The government said, OK, so long as you promise it won't be a cartel. And just like that, patent pools were back.
MATTIOLI: Just in the course of setting up this call, I touched at least five things that involved a patent pool - my smartphone, the tablet that I'm using, the desktop. So, yeah, we're surrounded by patents that are parts of pools.
KESLER: The more new technologies need to be interoperable with other existing inventions, the more the patent pool tends to be called into action again. For NPR News, I'm Sam Yellowhorse Kesler.
MARTÍNEZ: For the full story of Isaac Singer and the roots of the new wave of patent pools, listen to the Planet Money podcast episode.
(SOUNDBITE OF THOMAS DOLBY SONG, "SHE BLINDED ME WITH SCIENCE") Transcript provided by NPR, Copyright NPR.
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