Wireless Patent Gold Rush – Back to the Future

The stock soared 7 fold supported by a patent war chest and powerful backing of the industry giants of the day. Are you thinking Apple or Google? Well, this isn’t 2011, it is 1900 and the Marconi Wireless Telegraph Company, Ltd. began thriving in the stock markets, run by a young Italian inventor backed by Edison and Andrew Carnegie. These facts are fascinating especially in the context of 2011.

As was documented in the PBS history series on inventors http://www.pbs.org/tesla/ll/ll_whoradio.html ] The roots of the invention can be traced to Tesla and his design of coils that transmitted and received radio signals when they were tuned to resonate at the same frequency. When the coil was tuned to a signal of a particular frequency it magnified the incoming electrical energy through resonant action. Tesla filed his basic radio patent applications in 1897. They were granted in 1900, giving him the earliest rights to one of the greatest inventions of the era.

Marconi's first patent application in America, filed on November 10, 1900, was turned down. Marconi's revised applications over the next three years were repeatedly rejected because of the priority of Tesla and other inventors.

The vagaries of the patent office caused an about turn in 1904 and gave Marconi a patent for the invention of radio. As the story from PBS states, the reasons for this were never fully explained, but the powerful financial backing for Marconi in the United States suggests one possible conspiracy theory. Add insult to injury, Marconi won the Nobel Prize in 1911.

Tesla turned around and decided to fight in the courts. He sued the Marconi Company for infringement in 1915, but because of poor financial conditions he was unable to fight the case adequately. Despite many setbacks he was hopeful that he would eventually prevail. It wasn't until 1943 that the U.S. Supreme Court, in the court case “Marconi Wireless Telegraph Co. of America v/s United States,” upheld Tesla's radio patent number 645,576 (1897) over Marconi’s patent number 763,772 (1904). The Court had a selfish reason for doing so: the Marconi Company was suing the United States Government for use of its patents in World War I. The Court simply avoided the action by restoring the priority of Tesla's patent over Marconi. Tesla was not around to savor the vindication- he had died a few months earlier.

Here we are in 2011, a consortium of Silicon Valley companies including Apple successfully bid for important patents from the wreckage of a bankrupt company called Nortel. The losing bid was from another company called Google. Google is fighting back by buying patents from IBM and others. Also, calling attention to the collusion by Apple and its partners Microsoft and Oracle. [ http://arstechnica.com/tech-policy/news/2011/08/google-publicly-accuses-apple-microsoft-oracle-of-patent-bullying.ars ]. Meanwhile, the Justice Department is investigating the bids to see if there are any anti-trust implications and the sale was not done to hobble competition.

The patent wars of the 21^st century may well be underway. The patents from financially bankrupt companies and inventors will be the weapons of choice. Will history repeat itself at the Supreme Court and Patent Office?