New UK Banknote Celebrates James Watt, Patent Bully and Monopolist

from the litigation-is-easier-than-innovation dept

As do many nations, England likes to put images of its great and good on banknotes. In a somewhat quixotic attempt to stem the decline of what little manufacturing remains in the country, the governor of the Bank of England has come up with the following idea:

Sir Mervyn King, the governor of the Bank of England, has often voiced his yearning for a “rebalancing” of the economy towards neglected manufacturing, and he will put the nation’s money where his mouth is next month when the Bank produces a new £50 note celebrating two pioneers of the industrial revolution.

The Bank will evoke the memory of the inventor James Watt and his Birmingham business partner, Matthew Boulton on the new note.

Here’s the orthodoxy regarding Watt and Boulton’s contribution to innovation and the industrial revolution, as retold by the Guardian piece about the new banknotes:

[Boulton] later went into partnership with James Watt, who took the Newcomen steam engine, then the latest design, and made a series of crucial improvements, improving its efficiency and making it more commercial.

By 1800, Watt’s version [of the Newcomen steam engine] was outselling its predecessor, and they were shipping it across the world. Boulton and Watt worked together to pioneer the use of the steam engine in the cotton spinning industry; and Boulton also used Watt’s engine to power minting machines, pressing coins at his Soho Mint in Birmingham, to boost the supply provided by the Royal Mint.

What’s missing from this rosy picture of jolly engineers and entrepreneurs working together to apply technology for the benefit of humanity is that Watt was one of the first to exploit the monopoly power of patents to stymie innovation by others:

Once Watt’s patents were secured and production started, a substantial portion of his energy was devoted to fending off rival inventors. In 1782, Watt secured an additional patent, made “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 him with the full force of the legal system.

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; while between 1810 and 1835 it is estimated to have increased by a factor of five.

After the expiration of Watt’s patents, not only was there an explosion in the production and efficiency of engines, but 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 developed earlier these innovations were kept idle until the Boulton and Watt patent expired.

So rather than representing all that is best about invention and industrial innovation, the story of Watt and Boulton turns out to be one of how the nascent patent system was abused to prevent progress in this field. Indeed, it offers one of the best demonstrations that patents often harm everyone ? even patent-holders:

Ironically, not only did Watt use the patent system as a legal cudgel with which to smash competition, but his own efforts at developing a superior steam engine were hindered by the very same patent system he used to keep competitors at bay. 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 at efficiently transforming reciprocating 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.

As such, Watt and Boulton’s appearance on the new £50 banknote is not so much a celebration of engineering excellence, as a timely reminder of the harm that patents and their thickets continue to wreak on true innovators today.

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Comments on “New UK Banknote Celebrates James Watt, Patent Bully and Monopolist”

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Chargone (profile) says:

Re: Re:

that’d be a first.

most modern economic theory is built on the assumption that the nation is a (and in fact, the) meaningful base unit.

it really, really isn’t.

(seriously, how can Russia, the USA, India, Belgium, Taiwan, Fiji and the Vatican all be the same sized unit in a meaningful system?)

cities, and the regions they most closely interact with as a consequence, on the other hand, are. (city, in this case, being defined as a settlement which undergoes a cycle of import replacement and thus expansion of it’s internal economy and thus expansion of it’s exports and thus imports More, of new and different things.)

most economic policy breaks because it’s raw data is the combined (and often averaged) information from each city-region… which isn’t terribly useful.

(on a fun note, the problem with free trade is that it reverses the import replacement element and instead of replacing imports with local production, replaces local production with imports, thus shrinking what is available for export, thus shrinking how much can be imported. any situation where tariffs on imports are too low will do this, of course. and why get rid of them anyway? it’s not the sellers who pay them, it’s the customer. and they go into the coffers of the government, (at whatever level) which is, functionally, another producer, keeping it in circulation internally (at least within the country) and not actually disrupting the flow of goods and services. the Percentage values make it look like the seller is missing out, but the Actual values are at worst unchanged, provided the economy in question is doing well enough to support the resulting price.)

the above is Highly sumerised.

go read ‘the economy of cities’ by Jane Jacobs for a more detailed explanation of the city growth bit.


short version: if he’s been ‘educated’ in economics as the current theory goes, it’s more reasonable to expect him to understand the patent bit than to have any grasp on the reality of how an economy actually works, or even what it IS.

Richard (profile) says:

Better Candidates

I would like to see John Walker and Frank Whittle on the banknotes. John Walker invented the match but never patented it – saying that he could make enough money for his own needs without a patent.

Frank Whittle initially patented the jet engine – but allowed the patent to lapse after a few years because he could not afford the renewal fee. Ironically, in view of the arguments often made by patent advocates, he secured funding for the development just a few months later.

Chargone (profile) says:

Re: Re: Better Candidates

ehh, the british were working on them too…

but the guy who was doing it couldn’t get the funding to do anything meaningful with it until after the war.

(or at least, that’s what i remember of the story. had the war ministry, or whoever was running that bit of government at the time, picked up on it, the british could have actually had better jets, sooner, than the germans. i can’t remember why they didn’t… a mix of legitimate and practical resourcing and production issues and the typical ‘it’s new, therefore beyond us, therefore we want nothing to do with it.’ mentality, if i remember rightly.)

Lawrence D'Oliveiro says:

Watt Engine Not Fit To Be Called ?Steam Engine?

The Watt engine was just a minor variation on the Newcomen engine. It wasn?t a ?steam? engine, it was an ?atmospheric engine??driven not by the pressure of steam, but by the pressure of the atmosphere after the steam had entered the cylinder and condensed.

The true steam engine, recognizable as a steam engine today, running off actual steam pressure, was developed by Trevithick and the other Cornish mining engineers, after Watt?s patent had expired and could not bother them any more.

cc (profile) says:

The idea of patents wasn’t exactly new in Watt’s time, as patents had been around since the Middle Ages in the form of letters patent. Those were basically complete monopolies granted by kings to certain merchants, who were the only ones allowed to trade or invent in a certain area. Of course the kings received huge profits by sharing a cut of the obscene wealth gathered by those merchants.

The patents in Watt’s time were under the newly codified and reformed patent system from Queen Anne’s time (yes her), which are similar to what we have today. In contrast to the medieval patents that preceded them, these patents were actually allowed to expire after a certain period, so perhaps there’s a case to be made that even though Watt’s patents delayed the Industrial Revolution by several decades, the fact that patents were no longer perpetual is what eventually let us move forward.

So now every time you think about the 20-year delay between the granting and expiration of a patent, think of it as a 20-year dark age waiting to end. That’s the true effect of monopolies on progress.

We just need another brave reformer who isn’t afraid to stick his neck out, who’ll finish what Queen Anne started so long ago. The story for copyright is similar, though the dark age lasts quite a bit longer.

Anonymous Coward says:

” Watt was one of the first to exploit the monopoly power of patents to stymie innovation by others”

A nice and careful re-writing of history I see! Actually, during the time that Watt had his patent, there was an incredibly huge amount of innovation going on, which manifested itself as soon as the patents expired. It isn’t like the competition sat on their hands and did nothing during the patent time. They worked their asses off, and the reason there was such a nice boost at the end was because they all came to market with useful, tested, and functional products.

That is without even mentioning the steam engines used outside of the view of Watt, which also expanded on his (and other) patents.

Patents didn’t stop them from innovating. Quit trying to re-write history.

Chronno S. Trigger (profile) says:

Re: Re:

Patents didn’t stop most people from innovating. It sure as hell stopped them from bringing their ideas to market where they and others could improve on those ideas (that could then be brought to the market and improved upon). What, you think it’s just a coincidence that his competition waited until the patent (That they knew can and would be used to sue them into oblivion) expired to come to market?

Anonymous Coward says:

Re: Re:

You fail to see the point of a patent system then. The point of a patent system is for innovators to make their innovations public. That’s the only reason the patent system exists. So if, in practice, the patent system encouraged innovators to hide their innovations until so arbitrary date for fear of litigation it was, by definition, operating expressly opposite from its intended function.

Anonymous Coward says:

Re: Re: Re:

Sorry, you read that wrong.

The patent system encourages innovation in a number of ways. First and foremost, it allows those who have new ideas to profit from them for a short period of time, allowing them to recoup on the investment and time spent to create them.

It also encourages true innovation for others, who will look a the invention (and it’s result) and attempt to find other ways to accomplish this (and a bit more).

The ones it deters are those who do the old “innovation by paint color”, those who seek to use someone else’s work, make a small change to it, and profit from it entirely.

It’s the reasons why we often end up with more than one solution on how to do things, and then the public (or the end user) gets to choose amongst many competing ideas and systems.

Those who create something truly new have nothing to fear from litigation. Those who copy a patent device and attempt to pass it off as their own because they repainted it or added a bauble onto it should fear litigation every day.

Richard (profile) says:

Re: Re: Re: Re:

Those who create something truly new have nothing to fear from litigation.

Stop right there. What you actually mean is that those who create something so novel that it uses nothing of the recent past. You can count those on the fingers of one ear.

Something sufficiently novel to avoid patent litigation doesn’t exist and never has. Read the book of Ecclesiastes.

Even if it did you could well be stymied by someone who filed a patent on your technology after you had already developed it (like Nintendo with the wiimote) or by someone who corrupted the patent examiners (like Bell did)

Anonymous Coward says:

Re: Re: Re:2 Re:

Richard, in current terms, yes – all the low hanging fruit (like steam engines) has been picked. There was plenty of true innovation in the 1800s and early 1900s, because we didn’t have any of it to start with.

As for Ecclasiastes, let’s just say that it is a simplistic way of trying to dismiss all of mankind’s accomplishments. If that is how you truly feel, I suggest you move back into a cave and hunt animals with a spear. Oh, eat them raw, we haven’t developed fire yet.


Richard (profile) says:

Re: Re: Re:3 Re:

There was plenty of true innovation in the 1800s and early 1900s, because we didn’t have any of it to start with.

I notice you don’t quote any actual examples – because if you read the real history as opposed to the popular misconceptions – you will find that there aren’t any.

Mankind’s accomplishments have been achieved by putting together already existing things/ideas – not by creating completely new ones.

(ps if you want to trade insults then it would be a good idea to learn to spell and type accurately.)

Richard (profile) says:

Re: Re:

Patents didn’t stop them from innovating.

Actually it did. From Wikipedia.

“Jonathan Hornblower … developed a compound engine in 1781 but was prevented from pursuing his invention by litigation with James Watt (Boulton & Watt) over intellectual property.[2]”

Quit trying to re-write history.

Actually it was Watt who re-wrote history – we are just trying to re-establish the truth. Does that bother you?

cc (profile) says:

Re: Re:

Like somebody else has already mentioned, real steam engines were invented by a man called Richard Trevithick while Watt’s patents were still in effect.

Watt’s engines were the size of a building and, while useful for pumping water out of a mine, weren’t suitable for things like locomotives. In fact, Watt’s engine did not even use pressurised steam (they depended on the vacuum created by condensing steam), so they were quite inefficient for their size.

Once Watt and Boulton realised that Trevithick invented a steam engine that was superior to theirs, they started a coordinated FUD campaign against the use of pressurised steam, and used their patents to sue Trevithick into bankruptcy. To add insult to injury, they then made a court extend the duration of their patents, so Trevithick never had the opportunity to see steam trains that used his inventions.

Watt died a millionaire; by today’s standards, possibly a billionaire.

Trevithick died without a penny to his name.

The first steam trains were introduced about five years after Watt’s patents expired.

Those are the facts.

RD says:

Re: Re:

“Patents didn’t stop them from innovating. Quit trying to re-write history.”

So what then is the practical difference between being stifled by patents and not innovating at all, if they couldnt DO anything with the inventions until AFTER the patents expire? An invention unreleased because it cant be is not much more use than an something not invented. The 10-20 year delay in having to wait would moot most inventions and put off most inventors. NO inventor will spend a DECADE working on something while rubbing his hands together and going “boy just wait until the patent expires next decade…I’ll be SET!”

DannyB (profile) says:

Why are you against bullies anyway? :-)

You complain that bullies are bad. I just don’t see it. I just don’t get it.

Think of the good bullies do for the economy!

Let me explain something to you about basic economics.

When a bully collects lunch money from several of his good friends, think of all of that income! It adds up. That is money that is directly spent right back into the economy to buy valuable goods and services. If the bully didn’t spend that money, it would just disappear from circulation. The friends who contributed it to the bully certainly never would have spent it — and they won’t miss it.

Bully is such an ugly word. You really need to consider how you phrase things. There are so many less provocative terms like Redistributors of Wealth for Economic Benefit. I’ll let you use your imagination.

It works the same with Patent Redistributors of Wealth. The money they collect contributes directly to the economy. And similarly, it is best to use less loaded terms like Innovators, Intellectual Vultures, or Patent Aggregators.

Or take a lesson from biology instead of economics. When leeches suck your blood, you don’t miss it. Yet the leech benefits and it is part of the food chain, leading to overall benefit for the entire ecosystem. Why would you be against that? Since you are also part of the overall ecosystem (or economy) you share in the benefit of the leech sucking your blood (or collecting your lunch money).

Parasites is such an ugly word. There are so many less provocative terms like Collection Society.

DannyB (profile) says:

Re: Patent Aggregators

Patent Aggregators lead to Patent Pools.

Imagine someone walks in to your business and says “Nice business you’ve got there. It would be a shame if anything were to happen to it.”. Then he kindly offers to sell you rather expensive fire insurance.

Two days later, another guy comes skateboarding into your business with an offer you can’t refuse for another fire insurance policy.

And on and on it goes.

If you can’t afford to pay all of the separate fire insurances, then you greatly increase the odds of having a fire.

Now imagine a Fire Insurance Pool. The insurers get together and agree to each accept a portion of a more reasonable insurance premium. Only one red eyed heavily tattooed guy comes to collect, and only one convenient payment to make. And the odds of you having a fire are significantly reduced.

Similarly, with a patent pool, the odds of getting sued for your own hard work (eg, developing a video codec for instance) are significantly reduced.

Music collection societies work this way on one level. As soon as you pay a collection society, you can play music in your establishment without ever having to worry.

Oh, wait. But then another collection society comes knocking.

Hey, they should get together for form a Collection Society Society. That would be great! Only one guy comes to collect, and only one convenient payment to make. And the odds of you getting sued are significantly reduced.

But danger is never eliminated — because another collection society society that is not a member of the first collection society society may come knocking. Hey, they need to form a collection society society society!

Anonymous Coward says:

I tend to place greater stock on the history of steam engine design contained in William Rosen’s book “The Greatest Invention of All Time”, a book devoted to far more than simply the work of James Watt, and his later partner Boulton. Rosen places Watt’s work in the context of what was happening throughout England during the 18th century, and while Watt’s work was certainly very important in certain industrial applications, it was not the innovation stifler to so many appear inclined to believe.

Anonymous Coward says:

BTW, Watts legacy far transcends just his work on the inventions covered by his patents. He is generally acknowledged as one of the very important contributors in the advancement of thermodynamics.

It is also useful to try and keep in mind that the steam locomotives people appear to decry as being hindered by Watt’s work depend upon areas of technology far, far removed from just steam power. Metallurgy, manufacturing process, quality control, etc. Without all of them coalescing at about the same time the introduction of steam locomotives would have been greatly delayed.

Richard (profile) says:

Re: Re:

BTW, Watts legacy far transcends just his work on the inventions covered by his patents. He is generally acknowledged as one of the very important contributors in the advancement of thermodynamics.

Of course being an evil monopolist does not mean that you can’t do useful things too.

is also useful to try and keep in mind that the steam locomotives people appear to decry as being hindered by Watt’s work depend upon areas of technology far, far removed from just steam power. Metallurgy, manufacturing process, quality control, etc

A good point – that actually supports my argument. The idea of the mechanism of the steam engine is obvious. The materials and manufacturing techniques needed to make one are not – yet Watt deployed his patent against the idea (of the high pressure engine) – which anyone could have had (and many did). He was not responsible for the technological developments that made it possible (which actually came from gun manufacture) and yet he was able to abuse his patent to block it.

Consider the following from Boldrin & Levine “Against intellectual monopoly”:

“As a measure of the social value of competition versus
monopoly, consider the following facts. The duty of steam engines
(a measure of their coal-efficiency) that, during the twenty five
years of the Boulton and Watt monopoly (1775-1800), had remained
practically constant, improved by roughly a factor of five during the
1810-1835 period.”
“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

So whilst Watt’s patent may not have stopped progress permanently it certainly held it back.

MD says:

Another Patent Story

The Wright brothers, Orville and Wilbur, are another classic example of patent stifling. They invented wing-warping as the technique to steer and level a plane. They then proceeded to sue the ass off anyone who tried to compete. Inventions like Curtiss’ flaps and ailerons (what all aircraft use today) were deemed infringing and could not be marketed.

As a result, the US army had the Jenny, a flying rail, while europeans immune to their lawsuits, were the center of innovation; they were shooting it out in enclosed cockpits, triplanes, multi-engne aircraft, machine-guns through the propellers, etc.

staff says:

another biased article

“patents and their thickets continue to wreak on true innovators..”

By definition he who owns the patent is the innovator. It means you developed it first.

Masnick and his monkeys have an unreported conflict of interest-

They sell blog filler and “insights” to major corporations including MS, HP, IBM etc. who just happen to be some of the world?s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are patent system saboteurs receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don?t have any.

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