Planet Money

The Invention Invention

February 11, 2026

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  • The history of invention and technological progress, as explored in "The Invention Invention," is often driven not by singular, selfish inventors, but by the necessity of collaboration, exemplified by the creation of the patent pool. 
  • The patent pool, first established by sewing machine rivals in 1856, serves as a crucial mechanism to resolve 'patent thickets' by allowing complementary inventions to be shared legally, balancing individual reward with industry advancement. 
  • The legal framework for modern collaboration, particularly in technology standards like MPEG, hinges on the principle of being 'Fair, Reasonable, and Non-Discriminatory' (FRAND) to avoid antitrust violations that plagued earlier, overly restrictive patent pools. 

Segments

Introduction to Italian Inventor
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(00:01:09)
  • Key Takeaway: Leonardo Chedidione, an Italian inventor, was motivated by a dream to connect the world through universal video communication.
  • Summary: The episode introduces Italian inventor Leonardo Chedidione, who sought to create a world where ’evvvvverybody can talk with evvvvverybody else.’ His vision focused on making video easily shareable across all devices. This required solving the problem of massive digital video file sizes prevalent in the 1980s.
MPEG Invention and Collaboration Need
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(00:03:25)
  • Key Takeaway: Leonardo invented MPEG, a file format that compressed huge digital video files, necessitating industry-wide agreement to succeed as a universal standard.
  • Summary: MPEG (Moving Pictures Experts Group) is a video file format that compresses large files, similar to JPEG for pictures or MP3 for audio. For MPEG to become the universal language of digital video, electronics manufacturers needed to collectively agree to adopt it, raising antitrust concerns about collusion.
Sewing Machine War Context
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(00:06:41)
  • Key Takeaway: The legal precedent for collaboration was found by looking back to Isaac Merritt Singer’s patent disputes in the Industrial Revolution.
  • Summary: Isaac Merritt Singer, the inventor of the successful sewing machine, was an ambitious figure who faced numerous lawsuits from rivals like Elias Howe Jr. This period created a ‘patent thicket’ where numerous competing patents hindered further innovation.
First American Patent Pool Formation
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(00:14:15)
  • Key Takeaway: Lawyer Orlando B. Potter proposed the first American patent pool in 1856, uniting Singer, Howe, and other rivals to share complementary patents for a fee.
  • Summary: To escape the destructive sewing machine war, competitors formed the ‘sewing machine combination,’ the first patent pool in America. This pool required that only complementary inventions—those that work together but do not overlap—could be included.
Patent Pool Concerns and Glassware Case
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(00:17:05)
  • Key Takeaway: The success of patent pools led to concerns about cartels, culminating in a Supreme Court case against the glassware industry’s ‘gob feeder’ pool for price fixing and output restriction.
  • Summary: The Supreme Court ruled in 1945 that the glassware patent pool violated the Sherman Antitrust Act because it operated like a cartel, restricting output and fixing prices. This established the requirement that patent pools must operate under ‘Fair, Reasonable, and Non-Discriminatory’ (FRAND) terms.
Antitrust Chill and Patent Pool Decline
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(00:20:01)
  • Key Takeaway: The 1970s saw a shift toward stricter antitrust enforcement, including the ’nine no-no’s,’ which discouraged collaboration and caused patent pool formation to essentially cease.
  • Summary: A new antitrust sentiment in the 1970s, characterized by the Justice Department’s ’nine no-no’s,’ made companies fearful of collaboration. This legal climate led to the near-total cessation of new patent pool formations throughout the 1970s and 1980s.
MPEG Patent Pool Rebirth and DOJ Approval
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(00:23:21)
  • Key Takeaway: The MPEG collaboration successfully revived the patent pool model in the 1990s by proactively securing DOJ approval via a letter promising FRAND compliance.
  • Summary: Leonardo’s MPEG effort required a patent pool to establish a universal video standard, necessitating navigation of past antitrust pitfalls. Lawyers crafted a letter to the Department of Justice promising fair treatment (FRAND) and non-coercion, which was approved in 1997, setting a new template for modern standards.
Legacy of Cooperation in Technology
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(00:30:44)
  • Key Takeaway: Modern technology, from Bluetooth to 5G, relies heavily on patent pools, demonstrating that cooperation often supersedes the narrative of the singular, heroic inventor.
  • Summary: The saga of patent pools reveals that cooperation among self-interested competitors is often the engine for widespread technological adoption and consumer benefit. These pools separate legitimate collaboration from illegal collusion, enabling complex technologies to reach the market.