W is a professor at King’s College London, a Fellow of the Royal Society, and a prolific inventor. He has developed a new telecommunications technology in collaboration with C, who is a businessman and former army officer. W has demonstrated the effectiveness of his technology with a working installation that he has set up to transfer data between central London and a point approximately 20 miles to the West. The installation proves conclusively both that it is possible to transfer data over this distance in a novel way and that there is a public appetite for the technology.
There is no reason why the technology could not be applied in a similar way over much longer distances. The advantages over existing technologies are great, and there is a large, potential market. W’s technology is well protected with patents in the UK and other major markets. As W refines and improves the technology he is able to file further patents. One of the benefits of W’s technology is that it can make use of existing technology infrastructure, which reduces installation costs.
W and C form a business together to exploit the technology, but they quarrel endlessly. C claims to be a co-inventor of the inventions claimed in the patents, but W regards him more as a source of funding and marketing. C also has interests in supplying hardware and installation services that are used in conjunction with the technology.
W and C refer their patent dispute to arbitration by a two-person panel. W chooses a leading academic as one of the arbitrators. C chooses a well-known engineer as the other arbitrator. The panel concludes that each of W and C has contributed in his own way, so that they are co-inventors. There are suspicions that this is a typical fudge by arbitrators, rather than a rigorous decision based on patent law.
Whatever their respective scientific contributions may be, it is clear that commercial exploitation of the technology will depend on C’s business skills. W is an academic who is so shy that sometimes he gets someone else – another well-known academic – to deliver his lectures for him.
Following the arbitrators’ decision, W and C resolve their dispute by entering into an agreement under which some of the patents are assigned to C in return for continuing royalty payments to W.
The technology increasingly captures the public imagination. C and others form a public company to exploit it further. The company raises sufficient money to buy outright most of the intellectual property that it needs. W agrees to sell the company his remaining interests in patents and royalties for a lump sum of several million pounds.
The technology is successful for a few years, but is then overtaken by a more efficent and user-friendly technology that is developed in the USA.
Sounds familiar? This could be a story about broadband or 4G, but is actually about the electric telegraph in the 1830s and 1840s. W is Charles Wheatstone, who is most famous as the inventor of the Wheatstone Bridge. C is William Cooke, who made a fortune from the telegraph but later lost it with less successful investments. Both of them were knighted for their services to telegraphy, in the 1860s. The arbitrators were Brunel senior (the father of Isambard Kingdom Brunel) and Professor Daniell, the inventor of the Daniell battery and the first professor of chemistry at King’s College London. Wheatstone’s stand-in lecturer was Michael Faraday.
The working installation was built between Paddington railway station in London and Slough (now most famous as the location for the UK version of the TV show, The Office, and for the line from the Betjeman poem of 1937: “Come friendly bombs and fall on Slough…”). One of the commercial attractions of the electric telegraph was that it was able to use land that had already been purchased for the railway lines that were being built all over the country.
The public company that was formed was the Electric Telegraph Company, which later merged with other companies and was nationalised by the UK Government in 1870. The present day British Telecommunications plc can trace its origins partly to the Electric Telegraph Company. The company paid Wheatstone several tens of thousands of pounds to buy him out (accounts vary as to the amount, but one account says £33,000) which can be roughly multiplied by, say, 100 to work out an amount in pounds sterling in 2013.
Oh, and the US technology that superseded Wheatstone’s electric telegraph… Does anyone remember the name, Samuel Morse?