In 1856, the Sewing Machine Combination formed one of the first patent pools consisting of sewing machine patents. See Robert P. Merges, Institutions For Intellectual Property Transactions: The Case for Patent Pools (August 1999).

In 1908, Armat, Biograph, Edison and Vitagraph entered an agreement under which the four firms assigned "all the patents in the early-day motion picture industry." The agreement also specified the royalties that were to be paid into the pool by licensees of the pool patents such as movie exhibitors. More on the history at: The Edison Movie Monopoly: The Motion Picture Patents Company vs.the Independent Outlaws by J. A. Aberdeen, The First Studios by Marc Wanamakert, Archives of Universal Studios: Carl Laemmle and the Early Years of Universal and The Business of the Movies by Rich Warms.

In 1916, the owners of various patents related to folding beds and other similar devices entered into an agreement providing exclusive license to the Seng Company to manufacture and sell under the pool patents. Of the total royalties, 33 percent was alloted to the Pullman Couch Company. The license contract was signed by the Davoplane Bed Company (7 patents), the Pullman Couch Company (13 patents) and two inventors. The Seng Company paid a fixed percentage to the pool. Pool members split the royalty according to a formula in the pooling agreement.

In 1917, as a result of a recommendation of a committee formed by the Assistant Secretary of the Navy (The Honorable Franklin D. Roosevelt), an aircraft patent pool was privately formed encompassing almost all aircraft manufacturers in the United States. The creation of the Manufacturer’s Aircraft Association was crucial to the U.S. government because the two major patent holders, the Wright Company and the Curtiss Company, had effectively blocked the building of any new airplanes, which were desperately needed as the United States was entering World War I. See Harry T. Dykman, Patent Licensing within The Manufacturer’s Aircraft Association (MAA), 46 J. PAT. OFF. SOC’Y 646, 648 (1964).

In 1924, an organization first-named the Associated Radio Manufacturers, and later the Radio Corporation of America, merged the radio interests of American Marconi, General Electric, American Telephone and Telegraph (AT&T) and Westinghouse, leading to the establishment of standardization of radio parts, airway’s frequency locations and television transmission standards. See The Radio Manufacturers Association (August 5, 1998).

A patent pool was formed in 1997, by the Trustees of Columbia University, Fujitsu Limited, General Instrument Corp., Lucent Technologies Inc., Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corp., Philips Electronics N.V. (Philips), Scientific_Atlanta, Inc., and Sony Corp. (Sony) to jointly share royalties from patents that are essential to compliance with the MPEG_2 compression technology standard. The MPEG -2 Standard patent pool comprises a number of essential patents put into the hands of a common licensing administrator empowered to grant licenses on a non-discriminating basis, collect royalties and distribute them on a pro-rata allocation based on each Licensor's contribution. The terms of the arrangement were negotiated with and approved by the US Department of Justice.

In 1998, Sony, Philips and Pioneer formed a patent pool for inventions that are essential to comply with certain DVD-Video and DVD-ROM standard specifications.

In 1999, another patent pool was formed by Toshiba Corporation, Hitachi, Ltd., Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corporation, Time Warner Inc., and Victor Company of Japan, Ltd. for products manufactured in compliance with the DVD-ROM and DVD-Video formats. See Letter from Joel I. Klein, Assistant Attorney General, Department of Justice, Antitrust Division, to Carey R. Ramos, Esq. (June 10, 1999)

DVD Patent Pool:
DVD Licensing Site. DVD6C Licensing Agency. There are presently 80 U. S. Patents for DVD-ROM drives, DVD-Video players and DVD decoders, and 96 U. S. Patents for DVD-ROM discs and DVD-Video discs. The royalties under the joint license for DVD-Video players and DVD-ROM drives are 4% of the net selling price of the product or U.S. $4.00 per product, whichever is higher. Royalties for DVD decoders are 4% of the net selling price of the product or U.S. $1.00 per product, whichever is higher (more information).

LinuxWorld: an argument from Bruce Perens for Linux to have a patent pool as a means of defense.

The basic idea behind OpenPatents.org is to change the rules of the patent game such that it is to the advantage of participants to help solve the problems of software patents.

December 1999. Katherine Moore, Ph.D., Ethics Advisory Committee. Sharing Genetic Research Tools, The Ethical Considerations.

June 9-12, 20002. Panel: A Solution: Can Patent Pooling Uncork the Technology Transfer Bottle Neck and Create Value? (International Biotechnology Convention & Exhibition. Toronto, Ontario, Canada).

February 8, 2002. Lawrence M. Sung. Greater Predictability May Result in Patent Pools.
This article refers to biotechnology inventions to include isolated genetic molecules, such as DNA or RNA, and biologics produced through recombinant technology.

At its core, biotechnology is the exploitation of nature’s design, standing on the shoulders of the biological templates of DNA and RNA. For biotechnology, genetic information represents an “industry standard” analogous to those described above in the electronics and telecommunications areas. Accordingly, the landscape of increasing patent protection to this genetic material favors the voluntary entry of biotechnology industry members into patent pooling arrangements.

Indeed, the vast amount of genetic information, and its significance as a fundamental research tool even absent functional knowledge, can give rise to an almost overwhelming number of patents, the true value of which may be unascertainable without the cooperative efforts of other companies. In any event, the overall transactional costs associated with risk assessments based upon this relatively uninformed valuation of patent rights may alone outweigh any perceived benefit to the maintenance of an isolationist business strategy.[SNIP]

The fundamental features of a patent pool include the integration of complementary technologies, the reduction of transaction costs, the clearance of blocking patent positions and the avoidance of costly infringement litigation. Its effectiveness springs principally from a consensus among the participants that individual patent rights will be made available to other members on fair, reasonable and nondiscriminatory terms. In any event, the ability to obtain a straightforward, reliable freedom to operate in an otherwise complex arena of intellectual property will be a dominant appeal of a biotechnology patent pool for prospective participants and nonmember licensees alike.

Given the dynamics of biotechnology research and development, the reliance by the industry on cooperative market-based technology transfer strategies through patent pools or other CROs may be inevitable. If so, the prospects for future success will likely depend on the swift acceptance and implementation of such collective rights programs.

In the early 1900’s, US courts gave sweeping deference to the licensing of patents and such activities were practicably immune from the Sherman Act. Patent pools’ freedom from any scrutiny under the US antitrust laws ended in 1912 with the US Supreme Court’s decision in Standard Sanitary Manufacturing Co. v. United States which dissolved a patent pool because of antitrust violations.

In 1945, the US Supreme Court dissolved one of the most notorious patent pools in Hartford-Empire Co. v. United States. This patent pool of major glass manufacturers covered ninety-four percent of all the glass made in the United States, which allowed its members to sustain glass prices at unreasonably high levels.

In the 1960s, the US Department of Justice closely evaluated all patent pools and created a list of nine patent licensing practices that were per se antitrust violations (known as the “Nine No-Nos).

Recently, the US Department of Justice and the US Federal Trade Commission (“FTC”) have recognized that patent pools can have significant procompetitive effects and may improve a business’ ability to survive this era of rapid technological innovation in a global economy. The Department of Justice’s and the Federal Trade Commission’s Antitrust Guidelines for the Licensing of Intellectual Property (the “Guidelines”) recognize that [l]icensing, cross-licensing, or otherwise transferring intellectual property … can facilitate integration of the licensed property with complementary factors of production” and that such integration can “benefit[] consumers through the reduction of costs and the introduction of new products.” (Guidelines, §2.3.) The Guidelines also caution, however, that “[w]hile intellectual property licensing arrangements are typically welfare-enhancing and procompetitive, antitrust concerns may nonetheless arise” particularly “when a licensing arrangement harms competition among entities that would have been actual or likely potential competitors in a relevant market in the absence of the license (entities in a ‘horizontal relationship’).” (Id. at §3.1.)

February 8, 2002. Scott A. Chambers. Patenting Procedures Foundational Issues in Patents and Antitrust. See: FTC/DOJ Public Hearing.

June 6-7, 2002. George G. Gordon. American Bar Association's Antitrust Section. Analyzing IP License Restrictions Under the Antitrust Laws: A General Outline of Issues.

April 17, 2002. James J. Kulbaski. Comments On Patent Pools and Standards For Federal Trade Commission Hearings Regarding Competition & Intellectual Property

March 19, 2002. James P. Love. Perspectives on Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy.

March 2002. David Perkins. The Role of Alternative Dispute Resolution in Patent Disputes

February 20, 2002. Josh Lerner. Patent Pools: Some Policy Considerations (presentation)

February 6, 2002. Charles James. Opening Day Comments for FTC/DOJ Public Hearings on the implications of antitrust and patent law and policy for innovation and other aspects of consumer welfare.

In the late 1990s, the Division examined through the Business Review process three different proposals to jointly license patents to other companies, an MPEG patent pool (a video compression technology) and two DVD patent pools. In all three cases, the Division concluded that the proposed arrangements did not appear to pose antitrust concerns.

The Division's decisions rested on a number of factors, including the fact that the pools license only those patents essential for a manufacturer to comply with an established standard. The pools were designed to capture the efficiencies that may come from licensing complementary technologies. Concomitantly, they were designed to limit the anticompetitive effect that can arise from pooling technology, such as the elimination of competition or the increase in prices that could arise if substitute technologies (that is, technologies that could compete against each other) were placed in a pool.

In these hearings, we will encourage exploration of a number of broad questions about patents pools, such as whether pools actually result in the competitive problems they are hypothesized to cause and whether the antitrust authorities have focused on the right criteria when evaluating patent pools.

December 2001. Joseph A. Yosick. Compulsory Patent Licensing for Efficient Use.
The paper compares compulsory patent licensing provisions in the United States and modern, foreign nations.

October 6, 2001. Richard Gilbert. Economics, Law, and History of Patent Pools and Cross- Licensing Agreements

September 2001.James Love and Michael Palmedo. Examples of Compulsory Licensing of Intellectual Property in the United States.

March 2001. Carl Shapiro. Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting

March 2001. Barbara T. Sicalides & Kathleen A. Mullen. The Plane Lands on Patent Pooling.

January 19, 2001. USPTO. White Paper on Patent Pooling The white paper suggests that patent pools can be used to create a number of social and economic benefits. These benefits include the elimination of problems caused by "blocking" patents or "stacking" licenses, reducing licensing transaction costs, sharing the risks in research and development, and facilitating the exchange of technical information or know-how not covered by patents. The use of patent pools in the biotechnology industry could be beneficial for both the public and private sector. The public would benefit by having ready access due to streamlined licensing conditions to a greater amount of proprietary subject matter. Patent holders would also benefit: they would gain greater access to proprietary subject matter of other patent holders and they would have access to affordable prepackaged patent "stacks" that could be easily licensed. Patent holders could also derive additional revenue sources for inventions that might not otherwise be developed. Winter 2000. Sheila F. Anthony. Antitrust and Intellectual Property Law: from Adversaries to Partners

December 5, 2000. Jeanne Clark, Joe Piccolo, Brian Stanton, and Karin Tyson. Patent Pools: A Solution to the Problem of Access in Biotechnology Patents?

August, 1999. Robert P. Merges, University of California School of Law. Institutions for Intellectual Property Transactions: The Case of Patent Pools.

November 27, 1995. John H. Barton. Patent Breadth and Antitrust: A Rethinking

1988. Donald A. Hicks. Is New Technology Enough?: Making and Remaking U.S. Basic Industries at 31.

1989. Ross Thomson. Invention, Markets, and the Scope of the Firm: The Nineteenth Century U.S. Shoe Machinery Industry, 18 Bus. & Econ. Hist. 140, 143 (“Patent control further strengthened [the] competitive positions [of the three largest firms] via pooling for the three major dry-thread firms (in conjunction with Elias Howe) . . . .).

1988. George Bittlingmayer. Property Rights, Progress, and the Aircraft Patent Agreement, 31 J. L. & Econ. 227 (describing accounting system for aircraft pool).

1961. William Greenleaf. Monopoly on Wheels. (describing automobile patent pool administration).