Kremer’s invocation of the Daguerre example as evidence for innovation through patent buyouts is not historically accurate

In an influential series of articles, Michael Kremer argues in favor of a “patent buyout” policy, citing the example of the “Daguerreotype patent.”22 The French government allegedly purchased the rights to a patent whose social value was great and allowed everyone free access to the technology. According to Kremer’s account, “In 1839 the French government purchased the Daguerreotype patent and placed it in the public domain. Such patent buyouts could potentially eliminate the monopoly price distortions and incentives for rent-stealing duplicative research created by patents, while increasing incentives for original research.”23 The facts are somewhat different, however. Most noticeably, a search in nineteenth-century patent records reveals that Daguerre had never obtained a patent in France at any point in his life for this or any other invention. As such, there was no patent for the French government to buy out, and the case study instead highlights the incentives for unproductive “rent-stealing” that arises when returns can be negotiated through a political process. In popular accounts, Daguerre typically receives sole credit for the discovery of a method of reproducing photographic images. However, work in photography had been in progress for over a century, and arguably the most significant advances up to that date had been made by JosephNicéphore Niépce. Daguerre had formed a partnership with Niépce, who died in 1833. His heir, Isidore Niépce, agreed that for marketing purposes Daguerre should have the sole attribution rights to the joint work Daguerre had accomplished with Isidore’s father.24 The political economy behind Daguerre’s prize of August 1839 was typical of the stratagems and manipulations that French inventors often adopted to get support and payouts from the authorities.25 Instead of paying the extremely high fees for a patent, and then trying to interest licensees or assignees, Daguerre was able to secure the patronage of François Arago, a politician and influential member of the Académie des Sciences, who lobbied strongly on Daguerre’s behalf in favor of a government grant. When the inventor turned over to the Ministry of the Interior a packet with the specification and information on the discovery, Arago was involved in the process of examining and verifying its validity on behalf of the French government. In view of the “patent buyout” argument, it is ironic that Daguerre’s main plea to the French legislature was that he was unable to apply for a patent to gain benefits from the process: “Unfortunately for the authors of this great discovery, it is impossible for them to commercialize it and thereby obtain compensation for the sacrifices they have endured as a result of their long and hitherto fruitless trials. Their invention is not susceptible to patent protection. . . . It is therefore 7 necessarily the case that this process must belong to everyone or else it must remain unknown.” Daguerre argued that his idea was an unpatentable trade secret and, once it was revealed, the whole world would have free access to his ideas and he would be unable to appropriate any returns.26 As such, the choice before the legislature was for his secret to die with him and be lost to the world, or for the state to buy the information and so benefit the public. An appeal was further cannily made to the essentially mercantilist nature of the French authorities; Daguerre hinted that otherwise foreigners might make an offer that he could not refuse. The measure was quickly approved, and a lifetime annual pension of ten thousand francs was awarded for the discovery.27 At the same time, Daguerre proceeded to file for a patent in England under the name of Miles Berry (a British patent agent), giving the lie to the notion that the invention was unpatentable and reneging on the bargain that the French government would buy the discovery on behalf of the entire world.28 Daguerre and Berry then placed a true patent buyout prospectus before the British government, on the grounds that the inventor was “obliged to ask so large a sum to Individuals for Licenses that few can afford to take them.”29 As a result of this alleged myopic failure of the market to recognize the true value of the invention, the inventor wished “to solicit Her Majesty or the Government of England to purchase the said Patent right for the purpose of throwing it open in England for the benefit of the Public and preventing this important Discovery being fettered or limited by individual interest or exertion.”30 Daguerre’s British patent buyout proposal was made on March 30, 18 40; the government representative politely and tersely declined the opportunity on March 31, 1840.