204 AIOTJAL REPORT SMITHSONIAN INSTITUTION, 194^ 



remains the decision as to the commercial possibilities of the new 

 device or product. Usually sufficient information is not available at 

 this stage on whch to base an intelligent decision. Information as 

 to probable costs (including equipment investment), processes, pro- 

 duction methods, market analyses, and distribution methods must be 

 obtained before a decision to manufacture and sell can be made. 

 This requires that the new product be carried through some prelim- 

 inary stage of development, where a study of these factors is made. 

 Usually this takes the form of some kind of pilot-plant activity 

 under the direction of a special experimental or development group 

 that has the responsibility of carrying new products through this 

 incubation stage following the completion of research work. This 

 form of development is particularly conspicuous in the chemical 

 industry. 



PATENT SYSTEM STIMULATES NEW DEVELOPMENTS 



Our patent system has had a stimulating influence on industrial 

 research and developments in the electrical industry that should not 

 be overlooked. It costs money to develop and exploit inventions. 

 The protection afforded by patents provides an incentive to develop 

 new things under conditions such that they may be exploited long 

 enough to become established. Quite often a strong urge toward a 

 particular development seems to become manifest and inventive effort 

 starts simultaneously in many places. This seeming chaos that 

 theorists would like to control from some central throne eventually 

 turns into true cooperative effort through the practical necessity for 

 cross-licensing of patents before a useful product can be obtained. 

 Television is a present-day example. Patents themselves are pub- 

 lished and the protection afforded does away with the necessity for 

 secrecy. The new progress that has been made impinges upon other 

 minds, thereby starting new chains of ideas that result in coordinated 

 group effort leading to rapid progress. 



Without the protection provided by patents, capital would be re- 

 luctant to venture into new fields. Industrial research would become 

 secretive, and because of the resulting lack of cooperation and coor- 

 dinated group effort, our progress in technical accomplishments and 

 standards of living would be seriously retarded. 



In the light of these advantages, many times verified by experi- 

 ence, it is disturbing to observe the tendency in some political circles 

 to propose legislation that would destroy these values and place seri- 

 ous limitations on individual right. Even the uncertainties surround- 

 ing such proposals create a lack of confidence, tending to retard initia- 

 tive and technical progress. This same condition exists to a large 

 extent throughout the industry, and particularly in the public-utility 



