Helge Holst’s 1963 Argument for Institutional Control of Government Inventions

In 1963, Helge Holst, an attorney for Arthur D. Little and member of the U.S. Chamber of Commerce’s National Defense Committee published a report titled “Government Patent Policy: Its Impact on Contractor Cooperation with the Government and Widespread Use of Government Sponsored Technology.” The report was republished in 1976 with other materials on patenting by a subcommittee of the House Committee on Science and Technology.

The report in its way repeats the most repeated claims about research, innovation, and government practices. It is a compendium of the vocabulary used by corporate pundits of the time–especially attorneys–to frame the discussion of government-sponsored inventions to address their interests. There’s really nothing in the report from inventors, or from the random general public, or from research scientists who might have inventors on their teams. The report is a missive of institutional concerns. We might expect as much, given the authorship. What’s lacking are statements from other angles. There appears to be little institutional representation of the interests of inventors, lab directors, members of various professions (doctors, engineers, mechanics), or members of the general public. Who is willing to make an argument for the benefit of anyone other than institutions? Perhaps that’s Research Enterprise’s role these days.

In the report we find themes we continue to find common, and commonly accepted simply by being common. But look at any of these themes and they fall apart. They don’t make sense, they don’t reflect practice, they are blind to a wide range of alternatives, and sometimes they are just stupid but presented as authoritative. It is clear, however, that Holst’s effort is to present a view of inventions and patents in a light as favorable as possible for the organizations he represents. For that, his work is exceptional. The challenge for the rest of us, however, is to put such arguments in context.

Let’s work through Holst’s claims regarding “inventors” and “entrepreneurs.” The report launches out with the assertion that government officials don’t understand how limited and incapable inventors are:

it is altogether too common to overlook the fact that very seldom is the inventor by himself able to bring his new concepts into use

This assertion sets up the requirement for “entrepreneurs” to step in and take control of each invention from inventors. And to attract entrepreneurs, there have to be patents, and patents therefore serve a dual purpose–removing the incapable inventor from his invention and attracting a capable entrepreneur who is motivated by the prospect of a private patent monopoly.

But look at this bit of assertion. “Very seldom”–but it appears also that “very seldom” are others able to bring the inventor’s new concepts into use, too. And most anyone acting alone “by himself” won’t get very far. The issue then is not that a person in isolation can’t do much with inventions, but rather that once someone has invented, who might they affiliate with to teach the invention, improve upon it, and put it into practice? That would be a fundamentally different question than the one asked.

Alternatively, we might ask after those conditions under which “very seldom” an inventor does have the ability to bring his “new concepts into use.” What are those inventions? What sort of inventors have this ability? Can this ability be taught? Can institutions do a better job of attracting research personnel with such ability? These, too, are very different questions.

And for all that, it might not be an inventor’s ability at all–nor the ability of the entrepreneur, nor the magical qualities of a patent. It may well be in the inherent nature of the invention that it can be used–a surgery technique, for instance. All that is needed is an inventor who is able to teach the invention. Or it may be situational luck–the invention is made in just the right circumstances that others ready to practice or develop the invention recognize its value to them and are able to act on that recognition. Again, patenting might have nothing to do with the use of the invention–indeed, patenting might reduce the prospect for situational luck through secrecy, legal wrangling, prospects for excluding many to reward some few, monopoly pricing, and endless delays while someone futzes with trying to control improvements or create some nasty version of the invention as a commercial product.

The assertion continues:

The personality and interest of inventors which provide them with curiosity and special insight into the phenomena of nature, or the ability to make comprehensive analyses of industrial or technical problems, is frequently quite foreign to the requirements for creating a production organization and establishing a distribution and marketing system.

It’s hard to know where to start with such nonsense. First we have an idealized view of inventor personalities presented as fact, as if there is a uniform personality type for inventors. That’s nonsense. Consider that most of the inventions in the industrial revolution–weaving, for instance, or steam–appear to have come from the mechanics and technicians who managed the industrial apparatus. They knew exactly what they wanted, and had ready at hand the means to implement their improvements. Same for the railroad engineers of the 19th century. All they needed was access to a tool shop. Where then does this isolated, maladjusted, incapable inventor come from? Why should the attorney general adopt such a strange depiction of inventors and make that depiction universal as a way to solve the government’s problem with patents? Inventor loathing  goes back a long way.

Consider an alternative depiction of inventors: Inventors vary widely by training, aptitude, and circumstances. A technician working with machinery or electronics equipment might be ideally placed to make inventive changes and immediately put them into service, as might a surgeon or a research scientist. A company engineering developing a new product might make thirty related inventions in the process, but choose only the best four or five to include in the final version of the product. The other inventions served a design purpose, and there is no loss whatsoever that they are not used. In might well produce a poorer product. An academic scientist might invent and immediately start a new company, as Frederick Cottrell did with the electrostatic precipitator, a device still in widespread use, or might dedicate his invention to the public, as Jonas Salk did with his polio vaccine. Or, as John von Neumann did with the digital computer, inventors might agree to make their work available to industry as a standard design, and encourage the development by industry of devices to improve the performance of the basic invention. Indeed, it may be rare that an inventor invents and lacks the ability to find others to assist in the development or use of the invention. The barriers to doing so might rather be found in institutional controls on inventions, including employment agreements, patent ownership requirements, non-compete covenants, conflict of interest rules, demands to receive a significant share of any money earned, and general bureaucratic delays, bother, and silliness.

What about such an alternative depiction of inventors as a diverse group? Perhaps the thing that matters most is where an inventor invents, not so much what bureaucrats imagine to be the “inventor’s disposition.” Such a change in focus would no doubt stimulate a change in government patent policy. Ownership would not be nearly so important as managing the situations in which inventors invent. The nature, too, of the invention, rather than a pop psychology account of the invention, might also inform policy. Inventions that are improvements on products that require fifty or more inventions to operate (like a basic ink-jet printer) might be released and immediately used, while inventions that set out a novel class of compounds that would prevent bureaucratic mindlessness might be tightly held and developed slowly over an extended period of time so as not to disrupt normal organizational life.

Let’s make one further observation regarding the reports psychopathy regarding inventors. Here’s the bit:

is frequently quite foreign to the requirements for creating a production organization and establishing a distribution and marketing system.

The report assumes that each invention will require a new production, distribution, and marketing system. This, too, is absurd. Many inventions extend existing systems or work within them. A new textile might use the same weaving equipment. A new surgical instrument unlikely requires entirely new operating room designs. And even where a new invention requires new production–Jane Jacob uses the example of the brassier–existing equipment and expertise may be readily redeployed to serve the purpose.

No, perhaps it is the rare invention that requires an entirely new production organization and a new distribution system. But think of it another way: big companies trying to swallow something entirely different from what they have done before may very well have to justify a new production organization and new distribution for a new market. A typical big corporation mindset is that if something new is to be done, it has to be done bigly, for a big profit. Otherwise, why do it? There are corporations that won’t consider business propositions unless there is at least $100 million in it for them. Anything less is a rounding error and not worth the time. Xerox classified inventions at its Palo Alto Research Center as “strategic” or “non-strategic.” For strategic inventions, Xerox would form a new division and do all those bigly things to launch a whole new product. The typical result was failure. Xerox released non-strategic inventions, such as the graphical computer interface, the mouse, ethernet, and postscript. The inventors of these non-strategic inventions appear to have been able to get their inventions into widespread use without starting with a bigly corporate investment. Funny that.

Thus, this assertion that inventions must require new production organizations and distribution systems is just silly stupid, taken as a statement purporting a general truth about inventors. We might say–most people lack the ability to create new production organizations and distribution systems. Or we might say–most people don’t need to create new production organizations and distribution systems themselves, since they often can adapt what is already there. Or we might say–only people in large organizations and determined to hold on to anything that might be valuable would think in terms of creating new production organizations and distribution systems–and those people would be thinking in the most expensive, the most difficult, the most proprietary terms possible. Why would a government policy focused on the use of inventions get caught up in how big corporations think about inventions? Why would the institutional perspective on inventors and inventions dominate the conversation?

This is no criticism of the inventor. Without his creative concept, following from insight into the problem, or his interest in analyzing complex situations, there would be no novelty. But equally, without organization genius and the promotional drive of the entrepreneur, there would not come into being the human, material, and economic resources required to put inventions to use.

Of course this is a criticism of the inventor. But worse, it is a stick-drawing idea about the capabilities of human beings. That somehow the inventor’s genius is never the entrepreneur’s genius. Farnsworth apparently could only invent television and could not entreprenoop. Same for Tesla, apparently, according to the report’s inventor psychopathy. The purpose these depictions of inventor and entrepreneur is to lay the foundation for a corporate view of invention in government patent policy. For corporations, inventors are hens that lay eggs. Brilliant in their way, but awful driving a truck to market and worse with a frying pan. Here, government policy is shaped to separate the inventor from the invention by claiming that inventors are nothing more than productive hens. The patent, then, becomes the means of separating these hens from their inventive work.

The basis of government patent policy is to ensure that institutions take control of inventions, and from that ownership position then do those things to create new production organizations and distribution systems. This is the friendly face of the Moloch state working on behalf of corporations. Later, nonprofits will be invited to join this thinking as a way for corporations to gain monopolies over inventions made with federal money in areas such as public health. In return for harvesting eggs from the incapable hens and delivering these eggs to companies, the companies will share 1% or so of their monopoly pricing, which might happen once in a two hundred inventions. This, then, is the great social contract embedded in government patent policy. Bayh-Dole is just an arrogant, botched, backhanded way of turning private patent monopolies built with public money–which should be an exception to standard government policy–into the norm, by making the exception “uniform.”

If we decline to accept that inventors have a uniform profile of capability and situational awareness, and if we also decline the idea that the thing that most needs to be done with inventions is to pass them with monopoly patent rights to corporations and speculators in corporations for development into mass market products, then we reach a very different policy space from the one Holst framed. Of course, it turns out that Holst’s view is widely accepted, despite being almost entirely unsupportable. Ah, the power of oft repeated rhetoric–the imagined world is so much more readily malleable than the actual one.

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