A Free Labor Ideology for the Ingenious Tinkerer: Class and the Ownership of Employee Patents, 1880-1925
Posted: 12 Oct 2002
Corporate ownership of employee-generated intellectual property is a legal construct that is now an accepted part of our culture and economy. Its development at the turn of the twentieth century represented a profound change in the ownership and control of ideas and a transformation in the social status and economic prospects of inventive employees.
Part I discusses two leading Supreme Court decisions on ownership of employee patents: Hapgood v. Hewitt (1886), which is the high-water mark of the nineteenth century judicial solicitude for the rights of employee inventors, and Standard Parts v. Peck (1924), which ushered in the twentieth-century regime of employer ownership of employee patents. The two decisions reflect profoundly different understandings of the necessity for upward mobility flowing from patent ownership in a democratic economy.
Part II examines the Philadelphia & Reading Railroad's policy that allowed at least some employees substantial control over their patents.
Part III shows how Du Pont began in the first decade of the twentieth century aggressively to claim all employee-generated patents and ideas as corporate property. By contrasting two influential Supreme Court cases and two influential company practices with particular attention to the status of the four employees at issue, the paper shows how changing legal rights in ideas changed the entrepreneurial prospects and, thus, the class position of inventive employees.
Assumptions about class played an important role in the changing law and changing business practices in the late nineteenth century and the early twentieth. In the early cases, judges often emphasized the independence and ingenuity of the creative employee. Judges' perception of the nature of the employees' middle class status vastly increased the employees' chances of becoming entrepreneurs if they were not already. By the early twentieth century, however, inventive employees increasingly were portrayed as servants in the master-servant regime and as a small part of the corporate research and development hierarchy. Once judges began to see inventive employees as servants first and inventors or creators second, it became that much harder for employees to capitalize on their ideas. Innovative employees became, at most, middle managers; they did not become business owners themselves. And even as middle managers, they enjoyed fewer entrepreneurial opportunities and less autonomy than the middle managers of the nineteenth century. Legal rules thus facilitated the redefinition of the middle class.
Part IV of the paper explores how the revolution in the ownership of ideas contributed to a fundamental rethinking of the relationship between invention, entrepreneurship, and upward mobility. The changes in patent ownership at the turn of the twentieth century represented a significant challenge to and demanded a redefinition of the free labor ideology as it existed after the Civil War. The new intellectual property rules threatened the notion that free labor meant control over the fruits of one's labor and the opportunity to quit the wage-earning class. Loss of intellectual property rights thus forced a re-evaluation of the relationship between free labor and middle class status.
Keywords: corporate ownership, employee patents, class, labor
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