A version of this article ran in the May issue of Bicycle Retailer & Industry News. Retailers can sign up for a free subscription to the print or digital magazine.
By Alan Coté
Common bicycle industry chatter: “That product is a rip-off, a total copycat.” Yet also heard frequently: “Patents stifle new ideas – only the lawyers win.” Which of these opposing points hits the mark?
Granting exclusive rights to inventors for their work is nothing new: patents date back to at least the 15th century in Europe. In the U.S. they’re part of the Constitution, along with copyright: "The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” (Article I, Section 8)
Constitutional inclusion or not, patents sometimes get bad-mouthed as handcuffs to innovation — but their underlying intent is do quite the opposite. In exchange for disclosing all the details about how an invention is made and used, an inventor can get 20 years of exclusivity on what they’ve created. A two-decade-long monopoly may indeed sound stifling. But without such exclusivity, a company could spend vast amounts of time and money to develop new technology, only for competitors to knockoff the new design … without the R&D costs. Two decades of rights stand as a powerful incentive to speculate about new ideas and invest in their development.
There’s another aspect of patents that is designed to further technology development: the description and drawings that are required – essentially an instruction manual on how to make the invention. Once a patent expires the invention goes into the public domain, and rights to the design are free for all – along with that instruction manual on how to make it and how it works.
Cost & Contention: The Hate
Intellectual property surrounding new technology is no doubt an expensive … and occasionally litigious … matter. For starters, having a patent agent or patent attorney write a patent application and drive it to issuance is neither fast nor cheap — filing to issuance takes about two to four years, with a cost in the low to mid-five figures. No doubt, the legal fees for patenting stand as a big line item for an independent inventor or startup company. And it’s not a rubber-stamp process – roughly 40% of patent applications never make it across the finish line to issuance. Patent applications are most often rejected because the Patent and Trademark Office deems the claimed invention as too similar to one or more previous inventions.
It is the claims of a patent that define the scope of its intellectual property. The description and drawings must support the claims, but it’s the latter that set the boundaries over exactly what exclusivity an inventor has. And therein lurks potential conflict: one company’s interpretation of patent claims may be different from another company’s, with the result sometimes being patent infringement lawsuits. Enforcement of patent rights is the responsibility of the patent owner, and it requires deep pockets: cost for enforcing or defending a patent varies widely, but can easily total several million dollars for each side for full litigation.
With all that money comes the rub: It’s been said that patenting – and patent litigation in particular – is a sport of kings. Some of the biggest companies in the bicycle business including Shimano, SRAM, and Fox have spent millions of dollars in recent years in patent lawsuits against each other. Smaller companies, like Princeton Carbonworks, Knolly, Intense, and others have been in the mix as well. In those cases, it can feel like it’s the lawyers, not the industry as a whole, that come out ahead – imagine if those millions had instead gone to bike advocacy efforts. But as is the case with most any conflict, deciding what’s fair can be a very difficult matter. That’s especially true in patent disputes, where costs can skyrocket as lawyers parse the excruciating legalese of patent claims to define who owns exactly what.
Better Bikes: The Love
Rest assured, it’s not always just the lawyers who win with patents. One of the best examples of improving the state of technology in the bicycle industry while rewarding the inventor is the story of the threadless headset. Through the early 1990s, virtually all bicycles – from department store cheapies to artisan-made steel – used threaded steerer tubes and headsets. Adjustment required large specialized wrenches, and the bearings were prone to loosening in rough service like off-road riding. In addition, frame manufacturers needed to build a range of different forks, with threaded steerer tubes sized to match headtube lengths.
In 1990, Texas cyclist and independent inventor Homer John Rader filed a patent application titled “Steering bearing assembly for wheeled vehicle.” A key inclusion in the patent claims was use of a non-externally threaded steerer tube. The advantages of the system were significant: adjusting a headset and installing or removing a fork from a headtube required only a hex key and a gentle tap. The bearings didn’t come out of adjustment frequently. Frame manufacturers could build forks with all the same-length steerer tubes. And to boot, the whole thing was lighter, thanks to the new style handlebar stem used.
In 1991, Rader struck a deal with Dia Compe USA (which became Cane Creek Cycling Components in 1992) for an exclusive license to the patent. The big improvements compared to threaded headsets caused one of the most significant changes in bike component standards ever seen.
Cane Creek had control over threadless headset technology from 1992 until the patent expired in 2010. “Effectively, all other threadless headsets during this patent life were manufactured under license from Cane Creek,” said Peter Gilbert, director of distributor sales for Cane Creek, and who’s been with the company since 1998. “The Rader patent ‘770"’ was a very simple and broad-scope patent. It was a very effective tool for us to grow the threadless headset market for Cane Creek and our licensees,” Gilbert said. “Some (companies) were indeed blocked from manufacturing and selling threadless headsets (because of the patent),” he added.
As an independent inventor, Rader was of course compensated for use of his patent. As a manufacturer and distributor, Cane Creek had control of the design in the marketplace and used that control to help fuel business success. And cyclists everywhere could adjust a headset or remove a fork with a single hex key. That’s a patent story we all can love.
Alan Coté is a registered patent agent & principal of Green Mountain Innovations LLC. He’s a past contributing writer to Bicycling, Outside, and other magazines, and a former elite-level racer. He also serves as an expert witness in bicycle-related legal cases. Nothing in this article should be considered legal advice.
