[Patents] The Patent King

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//Erik Josefsson<br>=-=-=-=-=-=-=-=-=-=-=-=-=-=-=<br>JEROME LEMELSON<br>The 
Patent King<br>He has a staggering 558 patents, costing companies around the 
world some $1.5 billion in licensing fees. But what did Jerome Lemelson 
actually invent?<br>Nicholas Varchaver<br>Mon May 14 00:00:00 EDT 2001<br><br>
<div class='BodyText'><p>
      This past February, Jerome Lemelson passed an impressive milestone: The 
      number of companies paying for licenses on his patents reached 750.
    </p>
    <p>
      The list includes an amazing array of corporations: old-economy 
      stalwarts like Alcoa, Boeing, Dow Chemical, Eli Lilly, and GE; 
      manufacturing behemoths like Ford, GM, and U.S. Steel; technology 
titans 
      like IBM, Hewlett-Packard, and Cisco. The portfolio of products covered 
      over the years by Lemelson's patents is equally staggering: They 
include 
      components in such everyday consumer products as the Walkman, the VCR, 
      the fax machine, and the camcorder. At one time or another his patents 
      have covered Velcro darts and industrial robots, crying dolls and 
      semiconductors. He even holds patents--perhaps his most important ones, 
      as we'll see--on the ubiquitous bar-code scanner.
    </p>
    <p>
      So far, these licenses have reaped nearly $1.5 billion. This is almost 
      surely more than any individual patent holder has ever earned from 
      licensing patents, and it hasn't come about by accident. Lemelson spent 
      his life thinking up patents--and then filing lawsuits to enforce them. 
      So rich is his patent portfolio that even now he remains in litigation 
      with some 400 companies (including AOL Time Warner, the parent of 
      FORTUNE's publisher). Well, not Lemelson, exactly--but rather a 
      for-profit foundation that holds the rights to his patents. Lemelson, 
      you see, has been dead for three years. When he passed away in October 
      1997, at the age of 74, he had just won his greatest patent victory, 
      crushing Ford Motor Co.
    </p>
    <p>
      It would be appealing to view Lemelson as part of the great American 
      tradition of the small inventor battling the rapacious corporation. 
      Certainly there have been plenty of people who have seen him in this 
      light. The distinguished writer Tom Wolfe once hailed him as a "genius" 
      in a laudatory article. Two of the most prestigious institutions in the 
      country, MIT and the Smithsonian, have allied themselves with his name. 
      To many small inventors, Lemelson is a figure of heroic proportions.
    </p>
    <p>
      Lemelson may well have been a genius: He earned 558 patents (some came 
      after his death), which leaves him four places behind the 
      inventore-di-tutti-inventori, Thomas Edison. But his was a different 
      kind of brilliance altogether. In truth, his most lucrative patents 
were 
      the product of a masterful exploitation of the patent system, and they 
      created a huge legal web that to this day ensnares corporations. 
      Critics--especially the many businesses he has sued--portray Lemelson 
as 
      the anti-Edison. They contend that he never invented the key 
      technologies for which he had the patents. Even one of Lemelson's 
former 
      attorneys, Arthur Lieberman, questions whether Lemelson was an inventor 
      in the layman's sense of the word. Rather, he says, Lemelson would 
      figure out where an industry was headed--and then place a patent claim 
      directly in its path. "In many cases, Lemelson didn't patent 
      inventions," says Lieberman. "He invented patents."
    </p>
    <p>
      The Lemelson litigation and licensing program--which has been 
      masterminded over the past dozen years by a wily lawyer named Gerald 
      Hosier--is unprecedented in its size and scope, and has become the 
      leading edge in a wave of patent litigation. Even as personal-injury 
and 
      product-liability suits--the bane of most large corporations--have been 
      declining, federal patent lawsuit filings have increased 60% since 1993.
    </p>
    <p>
      Now, though, the Lemelson litigation machine faces a serious threat, in 
      the form of a suit brought by a group of bar-code-equipment 
      manufacturers. If they win key rulings in the next year, the Lemelson 
      operation will, in all likelihood, finally wind down. But if they 
don't, 
      the $1.5 billion collected so far by Lemelson will be just a down 
      payment on a much larger tab--payment not for the creation of new ideas 
      but for what can only be called an intellectual land grab.
    </p>
    <p>
      You'd be hard-pressed to find a more appealing representative for 
      Lemelson's legacy than his widow, Dorothy. Petite, charming, and 
      ebullient at age 75, Dorothy was married to Lemelson for 43 years. For 
      many of those years they lived in Metuchen, N.J.--next door to Menlo 
      Park, the site of Edison's famous laboratory--where Dorothy worked as 
an 
      interior designer while her husband waged his lonely battles with 
      corporations. These days she has homes in Portland, Ore., and Incline 
      Village, Nev., and heads the Lemelson family's charitable foundation (a 
      separate entity from the for-profit foundation that controls his 
      patents). Since the mid-'90s it has doled out millions for programs 
that 
      foster innovation. Perhaps not surprisingly, MIT and the Smithsonian 
      have been big recipients of the foundation's largesse.
    </p>
    <p>
      She is also, these days, the chief burnisher of her late husband's 
      image. She recalls him as a self-effacing man, a gentle soul. Most of 
      all, though, she wants him to be accepted as a Great Man, something he 
      longed for during his lifetime. "He wanted people to know what he had 
      accomplished," she says a little wistfully. "He actually saw very early 
      on a new world. All the things that he was working on were the things 
      that created the world that you guys are living in now." His ability to 
      foresee technological innovations, decades before others, was, in her 
      view, the true basis of his eventual success. His patent battles? He 
      simply wanted recompense for the ideas that corporations routinely 
stole 
      from him.
    </p>
    <p>
      Her reminiscences tend to revolve around his obsession with his work. 
      She recalls Lemelson dragging her to the Patent Office in Washington, 
      D.C., on the way back from their honeymoon in 1954. ("It was so hot 
      there," she says. "It was horrible.") Her husband would keep notebooks 
      by his side when he slept--in case he woke up with a brainstorm. He 
      would mutter ideas into a Dictaphone as he drove his family to the 
      beach, and then sit under an umbrella (to avoid skin cancer), writing 
in 
      a notebook while his sons frolicked in the water. When he bought toys 
      for his boys, he would often disassemble them to see how they worked.
    </p>
    <p>
      For Lemelson, being an inventor did not mean waiting for a "eureka 
      moment." The process entailed a great deal of study and hard 
      work--though not necessarily the kind you would assume. Lemelson, for 
      example, didn't build models to test his major high-tech inventions. 
      Inventing for him was a largely theoretical exercise. An engineer by 
      training--he had three engineering degrees from NYU--he would spend his 
      days poring through the 40-odd technical journals he subscribed to, 
      publications with names such as Automation and Modern Materials 
      Handling. And it was his immersion in this wide range of technical 
      information that spawned Lemelson's patents, as he drew connections and 
      synthesized new ideas.</p></div>&nbsp;<br><br><a 
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