Against Intellectual Monopoly

"necessary in consequence of... having
been so unfairly anticipated, by [Matthew] Wasborough in the crank
motion." More dramatically, in the 1790s, when the superior Hornblower
engine was put into production, Boulton and Watt went after Jonathan
Hornblower with the full force of the legal system.3
    During the period of Watt's patents, the United Kingdom added about
750 horsepower of steam engines per year. In the thirty years following
Watt's patents, additional horsepower was added at a rate of more than
4,000 per year. Moreover, the fuel efficiency of steam engines changed little
during the period of Watt's patent; however between 1810 and 1835 it is
estimated to have increased by a factor of five.4

    After the expiration of Watt's patents, not only was there an explosion in
the production and efficiency of engines, but also steam power came into
its own as the driving force of the Industrial Revolution. Over a thirty-year
period, steam engines were modified and improved as crucial innovations
such as the steam train, the steamboat, and the steam jenny came into wide
usage. The key innovation was the high-pressure steam engine - development of which had been blocked by Watt's strategic use of his patent.
Many new improvements to the steam engine, such as those of William Bull,
Richard Trevithick, and Arthur Woolf, became available by 1804: although
they had been developed earlier, these innovations were kept idle until the
Boulton and Watt patent expired. None of these innovators wished to incur
the same fate as Hornblower.5
    Ironically, Watt not only used the patent system as a legal cudgel with
which to smash competition, but the very same patent system he used to
keep competitors at bay hindered his own efforts to develop a superior steam
engine. An important limitation of the original Newcomen engine was its
inability to deliver a steady rotary motion. The most convenient solution,
involving the combined use of the crank and a flywheel, relied on a method
patented by James Pickard, which prevented Watt from using it. Watt also
made various attempts to efficiently transform reciprocating motion into
rotary motion, reaching, apparently, the same solution as Pickard. But the
existence of a patent forced him to contrive an alternative, less efficient
mechanical device, the "sun and planet" gear. It was only in 1794, after the
expiration of Pickard's patent, that Boulton and Watt adopted the economically and technically superior crank.6
    The impact of the expiration of his patents on Watt's empire may come
as a surprise. As might be expected, when the patents expired "many establishments for making steam-engines of Mr. Watt's principle were then commenced." However, Watt's competitors "principally aimed at ... cheapness
rather than excellence." As a result, we find that, far from being driven out of
business, "Boulton and Watt for many years afterwards kept up their price
and had increased orders."
    In fact, it is only after their patents expired that Boulton and Watt really
started to manufacture steam engines. Before then, their activity consisted
primarily of extracting hefty monopolistic royalties through licensing. Independent contractors produced most of the parts, and Boulton and Watt
merely oversaw the assembly of the components by the purchasers.
    In most histories, James Watt is a heroic inventor, responsible for the
beginning of the Industrial Revolution. The facts suggest an alternative
interpretation. Watt is one of many clever inventors who worked to improve steam power in the second half of the eighteenth century. After getting one
step ahead of the pack, he remained ahead not by superior innovation but
also by superior exploitation of the legal system. The fact that his business
partner was a wealthy man with strong connections in Parliament was not
a minor help.

    Was Watt's patent a crucial incentive needed to trigger his inventive
genius, as the traditional history suggests? Or did his use of the legal system
to inhibit competition set back the Industrial Revolution by a decade or
two? More broadly, are the two essential components of our current system
of "intellectual property" - patents and copyrights - with all of their many
faults, a necessary evil we must put up with to enjoy the fruits of invention
and creativity? Or are they just unnecessary evils, the relics of an earlier
time when governments routinely granted monopolies to favored