This article examines the evidence behind claims that innovation is <p> hindered or blocked (termed technology suppression) by <p> corporations’ use of patents. In other words, are there ways in <p> which the exploitation of the exclusive development right of the <p> patent can be shown to retard the process of innovation, other than <p> in the trivial sense of excluding third parties from the right to <p> develop the technology covered by the patent? There are many <p> references to this possibility in the management, economic and <p> legal literatures, but two papers stand out for grounding their claims <p> of corporate suppression of innovation in the historical record <p> (Dunford 1987; Merges and Nelson 1990). Historical writing is the appropriate form of evidence bearing on how companies have made <p> use of their patents, but this paper shows that in Dunford and <p> Merges and Nelson’s writing the historical evidence has been <p> misinterpreted as providing evidence of technology suppression. <p> What it really reveals are a variety of practical problems in the <p> administration of the patents system as a system of development <p> prospects. <p> In the first sections of this paper the ground is prepared by a brief <p> review of the nature of property rights and the changing view of the <p> function of the patent system in the literature. This argues that the <p> development prospect function of patents must be considered a <p> feature of significant patent development. Then follows a detailed <p> reexamination of the claims for technology suppression in the <p> commonly cited historical cases. These are organised to cover the <p> major ‘development scenarios’ involving: ‘pioneer’, or platform <p> technology patents; multiple, necessary, but independently held <p> patents (eg. radio); the hundreds of minor patents in the so-called <p> ‘patent thicket’.2 <p> The empirical reanalysis confirms that most claims of deliberate <p> corporate technology suppression are the product of a misinterpretation <p> of the evidence. The interpretation that patents have <p> been used to retard technology development is found to have been <p> promoted by a number of features of the literature; <p> 1) the widespread belief, especially amongst economic analysts, <p> that a patent is a form of economic monopoly <p> 2) basic features of property law most pertinent to the function of <p> patents have been forgotten within the contemporary legal <p> literature <p> 3) some of the historical accounts themselves are confused in their <p> use of the term ‘competition’ and in their understanding of <p> patents as property <p> 4) the longstanding, hostile US anti-trust treatment of patents, itself <p> a product of the assumption that patents are conducive to the <p> formation of economic monopoly. Merges and Nelson argue that the cases of radio, the Selden <p> patent, Edison’s carbon filament patent and the Wright brothers’ <p> warped wing patent illustrate the general problem that awarded <p> patent scope tends to be excessively broad. In contradiction to their <p> position, it is shown here that these cases illustrate a range of <p> idiosyncratic problems in the administration of the patent system <p> that generated unusually severe conflicts between awarded scope <p> and technology development. The general problem is not an <p> excessive award of ‘broad scope’, but the ability of Patent Offices <p> and courts to maintain the patent institution as an effective system <p> of development prospects. In particular problem cases, one must <p> consider the reasons why the patent failed to act as a proper <p> development prospect and devise a tailored policy solution with the <p> object of retaining the development prospect function as much as <p> possible. <p> This revision therefore reinforces an understanding of the patent <p> system as a system of property rights that in principle, and usually <p> in practice, is an effective social device to aid the exploration and <p> exploitation of novel technical ideas (inventions).
