Other countries intent on catching up with Britain knew that they had to get hold of these advanced technologies, whether the method used to do so was ‘legal’ or ‘illegal’ from the British point of view. The ‘legal’ means included apprenticeships and factory tours.[17] The ‘illegal’ means involved the governments of continental Europe and the US luring skilled workers contrary to British law. These governments also routinely employed industrial spies. In the 1750s, the French government appointed John Holker, a former Manchester textile finisher and Jacobite officer, as Inspector-General of Foreign Manufactures.While also advising French producers on textile technologies, Holker’s main job was running industrial spies and poaching skilled workers from Britain.[18] There was also a lot of machine smuggling. Smuggling was hard to detect. Because machines were still quite simple and had relatively few parts, they could be taken apart and smuggled out bit by bit relatively quickly.
Throughout the 18th century, the technological arms race was fought viciously, using recruitment schemes, machine smuggling and industrial espionage. But by the end of the century, the nature of the game had changed fundamentally with the increasing importance of ‘disembodied’ knowledge – that is, knowledge that can be separated from the workers and the machines that used to hold them. The development of science meant that a lot of – although not all – knowledge could be written down in a (scientific) language that could be understood by anyone with appropriate training. An engineer who understood the principles of physics and mechanics could reproduce a machine simply by looking at the technical drawings. Similarly, if a chemical formula could be acquired, medicines could be easily reproduced by trained chemists.
Disembodied knowledge is more difficult to protect than knowledge embodied in skilled workers or actual machines. Once an idea is written down in general scientific and engineering language, it becomes much easier to copy it. When you have to recruit a skilled foreign worker, there are all sorts of personal and cultural problems. When you import a machine, you may not get the maximum out of it because you may only poorly understand its operative principles.As the importance of disembodied knowledge grew, it became more important to protect the ideas themselves than the workers or machines that embody them. Consequently, the British ban on skilled worker emigration was abolished in 1825, while that on machinery export was dropped in 1842. In their place, the patent law became the key instrument in managing the flow of ideas.
The first patent system is supposed to have been used by Venice in 1474, when it granted ten years’ privileges to inventors of ‘new arts and machines’. It was also somewhat haphazardly used by some German states in the 16th century and by Britain from the 17th century.[19] Then, reflecting the growing importance of disembodied knowledge, it spread very quickly from the late 18th century, starting with France in 1791, the US in 1793 and Austria in 1794.Most of today’s rich countries established their patent laws within half a century of the French patent law.[20] Other intellectual property laws, such as copyright law (first introduced in Britain in 1709) and trademark law (first introduced in Britain in 1862) were adopted by most of today’s rich countries in the second half of the 19th century. Over time, there emerged international agreements on IPRs, such as the Paris Convention on patents and trademarks (1883)[21] and the Berne Convention on copyrights (1886). But even these international agreements did not end the use of ‘illegal’ means in the technological arms race.
The year 1905 is known as the annus mirabilis of modern physics. In that year, Albert Einstein published three papers that changed the course of physics for good.[22] Interestingly, at the time, Einstein was not a professor of physics but a humble patent clerk (an assistant technical examiner) in the Swiss Patent Office, which was his first job.[23]
Had Einstein been a chemist rather than a physicist, his first job could not have been in the Swiss Patent Office. For, until 1907, Switzerland did not grant patents to chemical inventions.[24] Switzerland, in fact, had no patent law of any kind until 1888. Its 1888 patent law accorded protection only to ‘inventions that can be represented by mechanical models’. The clause automatically (and intentionally) excluded chemical inventions – at the time, the Swiss were ‘borrowing’ a lot of chemical and pharmaceutical technologies from Germany, the then world leader in those fields. It was thus not in their interest to grant chemical patents.
Only in 1907, under the threat of trade sanctions by Germany, did the Swiss decide to extend patent protection to chemical inventions. However, even the new patent law did not protect chemical technologies to the degree expected in today’s TRIPS system. Like many other countries at the time, the Swiss refused to grant patents for chemical substances (as opposed to chemical processes). The reasoning was that those substances, unlike mechanical inventions, already existed in nature and, therefore, the ‘inventor’ had merely found a way to isolate them, rather than inventing the substance itself. Chemical substances remained unpatentable in Switzerland until 1978.
Switzerland was not the only country at the time without a patent law. The Netherlands actually abolished its 1817 patent law in 1869, not to introduce it again until 1912. When the Dutch abolished the law, they were in no small measure influenced by the anti-patent movement I mentioned above – they were convinced that patent, as artificially created monopoly, went against their free-trade principle.[25] Exploiting the absence of a patent law, the Dutch electronics company, Philips, a household name today, started out in 1891 as a producer of light bulbs based on the patents ‘borrowed’ from the American inventor, Thomas Edison.[26]
Switzerland and the Netherlands may have been extreme cases. But throughout much of the 19th century, the IPR regimes in today’s rich countries were all very bad at protecting foreigners’ intellectual property rights. This was partly the consequence of the general laxity of early patent laws in checking the originality of an invention. For example, in the US, before the 1836 overhaul of its patent law, patents were granted without any proof of originality; this encouraged racketeers to patent devices already in use (‘phony patents’) and then to demand money from their users under threat of suit for infringement.[27] But the absence of protection for foreigners’ intellectual property rights was often deliberate. In most countries, including Britain, the Netherlands, Austria, France and the US, patenting of imported invention was explicitly allowed. When Peter Durand took out a patent in 1810 in Britain for canning technology, using the Frenchman Nicolas Appert’s invention, the application explicitly stated that it was an ‘invention communicated to me by a certain foreigner’, then a common proviso used when taking out a patent on a foreigner’s invention.[28]
17
Technologies were relatively simple at the time so that a person with the right skills background could learn a lot about its technology from a tour of a factory.
18
For further details, see Harris (1998), D. Landes (1969),
19
The British patent law came into being in 1623 with the Statute of Monopolies, although some argue that it did not really deserve the name of a ‘patent law’ until its reform in 1852, For example, see C. McLeod (1988),
20
Russia (1812), Prussia (1815), Belgium and the Netherlands (1817), Spain (1820), Bavaria (1825), Sardinia (1826), the Vatican state (1833), Sweden (1834), Württemberg (1836), Portugal (1837) and Saxony (1843). See E. Penrose (1951),
21
The original signatories were 11 countries: Belgium, Brazil, France, Guatemala, Italy, the Netherlands, Portugal, El Salvador, Serbia, Spain and Switzerland. The inclusion of trademarks in the agreement enabled patent-less Switzerland and Netherlands to sign up to the Convention. Before the Convention went into effect in July 1884, Britain, Ecuador and Tunisia signed up, bringing the number of original member countries to 14. Subsequently, Ecuador, El Salvador and Guatemala denounced the Convention, and did not re-join it until the 1990s. The information is from the WIPO (World Intellectual Property Organization) website: http://www.wipo.int/about-ip/en/iprm/pdf/ch5.pdf#paris.
22
They were on the Brownian motion, the photoelectric effect and, most importantly, special relativity.
23
It was only in 1911, six years after he finished his Ph.D., that he was made a professor of physics in the University of Zürich.
24
For further details on the history of Swiss patent system, see Schiff (1971),
25
Moreover, the 1817 Dutch patent law was rather deficient even by the standards of the time. It did not require a disclosure of the details of patents, it allowed the patenting of imported inventions, it nullified national patents of inventions that acquired foreign patents and there was no penalty on others using patented products without permission as far as it was for their own business. See Schiff (1971), pp. 19–20.
26
Although Edison made some critical contributions to the development of the filament-based light bulb, he did not single-handedly invent it, as is commonly believed. However, he owned all the relevant patents.
27
According to T. Cochran & W. Miller (1942),
28
Durand made the same statement regarding his 1811 patent of an oil lamp. See S. Shephard (2000),