Patent Shelving" = buying a patent to prevent others from using the technology
2000: Electric Car Battery patent bought by Chevron, then 'shelved"
What are some examples of the patents that have been bought up and “put in a drawer” (to suppress them)?
Transcript: (swearing)
18:01
Oh yeah. You could you could have a lot of fun actually, couldn’t you? like looking through patents, buying them up and then and then open sourcing them all so that we actually had you know a
innovation that that that could move easily with people’s inspiration and the the results could come back to the world.
Get off these fossil fuels and all that nonsense.
Yeah. All those uh those wonderful inventions that have been quietly put in a drawer somewhere in, you know, Shell or Chevron or whatever.
Buy them up.
DETAIL: GEMINI
Q: What are some examples of patents that have been bought up to suppress them (so that they can't compete with existing companies)?
A: In the business world, buying up intellectual property specifically to lock it away so competitors can’t use it is known as “patent shelving” or defensive patent acquisition.
While pop culture is full of urban legends about water-powered cars and infinite-energy devices being bought and suppressed by shadow organizations, the corporate world has several well-documented, real-world examples of strategic patent shelving designed to protect market shares or existing monopolies.
Here are some famous and historically verified examples:
1. Large-Format NiMH Batteries (The EV1 Backlash)
One of the most heavily cited examples of corporate patent suppression involves the automotive and oil industries in the 1990s and early 2000s.
The Tech: Ovonic developed large-format Nickel-Metal Hydride (NiMH) batteries, which were highly efficient and capable of giving early electric vehicles—like General Motors’ EV1—a much longer driving range.
The Acquisition: In 1994, General Motors bought a majority interest in Ovonic’s battery development. Later, in 2000, GM sold its control of these patents to Texaco, a major oil company (which was subsequently acquired by Chevron).
The Suppression: Chevron’s subsidiary, Cobasys, strictly controlled the patents and refused to sell large-format NiMH batteries to auto manufacturers for use in fully electric vehicles, only licensing them for smaller hybrid formats. Because of this, many automakers had to delay their electric vehicle plans until the patents expired or until Lithium-ion technology matured enough to replace them.
2. The Early Incandescent Light Bulb (Woodward & Evans Patent)
Thomas Edison is credited with inventing the commercial light bulb, but he did it partly by buying out his competition to eliminate threats to his business model.
The Tech: In 1874, two Canadian inventors named Henry Woodward and Mathew Evans patented a light bulb that used a carbon filament in a non-oxidizing nitrogen environment—a very similar concept to what Edison wanted to build.
The Acquisition: Realizing that this prior patent could legally challenge his own work and create a massive market competitor, Edison bought the Canadian and U.S. patent rights from Woodward and Evans in 1879 for $5,000 (a significant sum at the time).
The Suppression: Edison didn’t use their specific design; instead, he acquired it to neutralize the legal and commercial threat, ensuring his own version of the technology would dominate the market without interference.
3. Early Telephone Technology (Western Union & Gray)
During the birth of telecommunications, a massive corporate battle took place over who would control the future of the telephone.
The Tech: Elisha Gray and Alexander Graham Bell independently designed telephone prototypes at nearly the exact same time. Gray’s financial backers sold his technology rights to Western Union, the dominant telegraph monopoly of the era.
The Acquisition: Western Union realized that the telephone was a direct, existential threat to their incredibly profitable telegraph network.
The Suppression: Instead of developing Gray’s telephone technology to improve communication for the public, Western Union initially used their vast patent portfolio and resources to suppress Bell’s telephone company through aggressive lawsuits, trying to keep the telephone market from expanding and eating into their telegraph profits. (Eventually, Bell won out, and AT&T ironically grew so large it later bought Western Union’s telegraph business).
4. “Pay-for-Delay” in the Pharmaceutical Industry
While not always an outright purchase of a single patent, the pharmaceutical industry frequently utilizes a legal loophole known as “Pay-for-Delay” to suppress competition.
The Setup: When a major drug company’s patent on a blockbuster medication is about to expire, generic drug manufacturers file patents and applications to produce cheaper versions of the drug.
The Suppression: Rather than competing, the brand-name company will pay millions of dollars to the generic company in a legal settlement. In exchange for the cash, the generic company agrees to “shelve” its alternative version and delay entering the market for several years. The Federal Trade Commission (FTC) heavily regulates this practice because it artificially keeps drug prices high by suppressing competing patents.
What are the drugs that have been affected by "Pay-for-Delay"?
5. Defensive Patent Aggregators
In the tech sector, companies like RPX Corporation and Allied Security Trust operate on a massive scale to buy up patents for the literal purpose of keeping them out of circulation.
While they don’t do this to hurt consumers, they practice a form of protective suppression. They buy up patents from bankrupt firms or independent inventors before “patent trolls” can buy them. Once purchased, they clear the rights for their member companies (like Google, Apple, or Cisco) and effectively shelve the patents so they can never be used in a lawsuit to disrupt the tech ecosystem.
QUESTIONS:
Should the federal government have stripped/bought Chevron’s patent, based on Chevron’s conflict of interest and alleged withholding of the patent in contravention of patents’ goal to promote progress?
Do you believe GM’s EV1 electric car was withdrawn because of a lack of demand? Was the path to profitability unattractive at the time?
Are you familiar with some of the pharmeuetical drugs that have been subject to “pay-for-delay”? How much has this tactic cost people you know or insurers you use?
ELSEWHERE:
NiMH Battery Pattens
Stanford R. Ovshinsky invented and patented a popular improvement of the NiMH battery and founded Ovonic Battery Company in 1982. General Motors purchased Ovonics’ patent in 1994. By the late 1990s, NiMH batteries were being used successfully in many fully electric vehicles, such as the General Motors EV1 and Dodge Caravan EPIC minivan.
This generation of electric cars, although successful, was abruptly pulled off the market.
In October 2000, the patent was sold to Texaco, and a week later Texaco was acquired by Chevron. Chevron’s Cobasys subsidiary provides these batteries only to large OEM orders. General Motors shut down production of the EV1, citing lack of battery availability as a chief obstacle. Cobasys control of NiMH batteries created a patent encumbrance for large automotive NiMH batteries.[42] [43] [44] [45] [46]
General Motors EV1 Electric Car
The General Motors EV1 is a subcompact car that was produced from 1996 to 1999 by the American automaker General Motors (GM). A two-door, two-seat coupe, it was the first attempt by a major American automaker at a purpose-built, mass-produced electric vehicle following the 1990 introduction of the emissions standards in the US.
In 1990, GM debuted the battery electric Impact prototype, from which the design of the production EV1 was largely inspired. The California Air Resources Board enacted a mandate that year, stating that the seven leading automakers marketing vehicles in the US must produce and sell zero-emissions vehicles to maintain access to the California market. GM began manufacturing the car in 1996. In its initial stages of production, most of them were leased to consumers in California, Arizona, and Georgia. Within a year of the EV1’s release, leasing programs were also launched in various other American states.
Produced in two short generations, the EV1 featured a lightweight aluminum frame and a three-phase AC induction motor capable of producing 137 brake horsepower (102 kW). At the 1998 Detroit Auto Show, GM unveiled several EV1 prototypes, comprising a series hybrid, a parallel hybrid, a compressed natural gas variant, and a four-door conversion. Despite favorable customer reception, GM believed that electric cars occupied an unprofitable niche of the automobile market, ultimately reclaiming and crushing most of the cars. In 2003, GM terminated the EV1 program, disregarding protests from customers.
The EV1’s cancellation has remained a subject of dispute. Electric car enthusiasts, environmental interest groups, and former EV1 lessees have accused the company of self-sabotaging its electric car program to avoid potential losses in spare parts sales, while also blaming the oil industry for conspiring to keep electric cars off the road. Its discontinuation inspired the documentary film Who Killed the Electric Car? (2006), and at the time, GM gained a reputation as the company “that killed the electric car”.
EV1 Counter-Argument:
The EV1 was unprofitable (initially), but GM developed the car anyway to meet the 1990 California Air Resources Board (CARB). In 2002 the automakers lobbied to weaken the mandate and no longer had the incentive to maintain the EV1 program. This still isn’t conclusive about what should have been done with the battery patents. (Gemini)