The Wright Brothers Patent War - The Patent Pool Solution

The Patent Pool Solution

In 1917, the two major patent holders, the Wright Company and the Curtiss Company, had effectively blocked the building of new airplanes, which were desperately needed as the United States was entering World War I. The U.S. government, as a result of a recommendation of a committee formed by Franklin D. Roosevelt, then Assistant Secretary of the Navy, pressured the industry to form a cross-licensing organization (in other terms a Patent pool), the Manufacturer's Aircraft Association.

All aircraft manufacturers were required to join the association, and each member was required to pay a comparatively small blanket fee (for the use of aviation patents) for each airplane manufactured; of that the major part would go to the Wright-Martin and Curtiss companies, until their respective patents expire. This arrangement was designed to last only for the duration of the war, but in 1918, the litigation was never renewed. By this time, Wilbur had died (in May 1912) and Orville had sold his interest in the Wright Company to a group of New York financiers (in October 1915) and retired from the business. The "patent war" had come to an end.