The Lesson of Philo Farnsworth - by Neal Weinstock

My wife and a friend went to see "The Farnsworth Invention" the other day on Broadway. It's a play by the redoubtable Aaron (The West Wing) Sorkin about the struggle between inventor Philo Farnsworth and industry-builder David Sarnoff over the creation of TV. After she saw it, my wife praised the play and spoke of how sad it was that Farnsworth had his invention stolen from him.

"Yes, but eventually he got paid for it," I said.
"Well, not in the play," she said.

In fact, I don't want to spoil this play for anybody, but after long struggle in the courts and the examinations of the U.S. Patent Office, all challenges to Farnsworth's patents were dismissed, and Sarnoff's RCA licensed those patents for $1 million.

This was in the 1930s, when a million bucks could buy you something; the equivalent of about $200 million in today's money. There are bigger payouts these days for intellectual property of smaller importance, but there hadn't been yet in Farnsworth's day.

The settlement bought Farnsworth his own manufacturing company, after he payed off some early venture capitalists that backed him. He prospered for a while on government contracts, and later on manufacturing consumer televisions.

Eventually, he seems to have spent most of his money trying to invent nuclear fusion. Not such an unusual end to a fortune for a tech genius.

All of this is in history books and memoirs and government records. Sorkin has every right to fictionalize it for a play, and I can't speak for or against the dramatic truth he may have gained by making a story about RCA getting away with ripping Farnsworth off. Maybe it's part of some complex negotiation between Sorkin and RCA-child NBC over a TV deal.

But the fact that many histories still credit others as virtual co-inventors (especially RCA's Vladimir Zworykin, who mainly copied Farnsworth's work) tells us some important things about technology development.

For one, the company that dominated its industry, RCA, full of prideful executives and engineers, claimed TV's invention for itself. We all like to brag, and it certainly helps sales when customers think you are the inventor of the device.

But something else went on here, too. The common understanding of television is that it is a complex system, rather than a cleanly understandable point product. Thus it has always seemed logical to most people that it would take many different inventors to create all the needed pieces.

And when people celebrate innovations such as Paul Nipkow's earlier mechanical television concept and John Logie Baird's mechanical TV on a spinning metal disk, the necessary earlier inventions of tube amplification, radio, photography and motion-picture film (the latter not technically needed for TV, but surely inspirational), the story of TV being simultaneous invented in little pieces by engineers at RCA, Westinghouse, AT&T and other big companies seems true.

Except it isn't. One inventor in a garage or a basement is usually (not always) the source of any radically new technology. Therefore, while we should spend lots of money, as a society, to support innovation, it only makes sense to funnel it into big companies to the extent that they give a paycheck to the tinkerers who do their best thinking off the clock. Or to the parents of tinkerers before they ever get on the clock: Farnsworth was 14 when he thought up TV.

Farnsworth worked closely with a very good patent attorney in the early years of his invention, and even the first simple drawing of it for a schoolteacher survived to be used as evidence nearly two decades later. This documentation and legal rigor proved critical in fighting a vastly wealthier opponent over many years to prove the inventor deserved his patents.

You don't have to explain this to guys like Qualcomm's Irwin Jacobs, who also fought giants for decades and triumphed. But with patent applications growing exponentially these days, and many a ridiculous thing receiving patent protection, the common sense of engineers increasingly leads them to agree with politicians who push bills to make the patent process much tougher. This may help the RCAs of the world, but it won't help the Farnsworths.

Farnsworth's real-life story was also a tale of the triumph of West Coast venture capital. Although I am told that Sorkin's play has Farnsworth backed by William Crocker of Crocker Bank, actually it was a bank executive who came to believe in Farnsworth, and who rustled up other investors to back him.

Should Farnsworth simply have gone to a big company, explained his idea, and got them to back him' He tried that with Philco, and he tried again by allowing rival Vladimir Zworykin into his lab when he thought he worked for Westinghouse. Zworykin was actually undercover for RCA. The big companies were only really interested in stealing Farnsworth's ideas, not in paying him anywhere close to what they were worth.

Of course, he could have developed his great idea as a wage slave. But if you're bright enough to invent television, you probably have some idea that it's worth a lot. Indeed, more inventors probably overestimate rather than underestimate the value of their ideas.

Any expectation that great concepts will be developed on a salary only is doomed to failure. Thus our venturesome banking industry is more critical to our technological advancement than are our giant companies.

We still certainly need big companies, however. Farnsworth used his big paycheck to start a company to make TV sets. He never made very many, and here his story became completely peripheral to the continuing advancement of the TV industry.

It truly did take an RCA to make TV into something we all could use. This was true not only because big companies are needed for big manufacturing efficiencies, but also because of Sarnoff's own true genius in creating much of the broadcasting business as it exists today.

My understanding is that Sorkin gets this part right. The genius that can invent television has nothing to do with the genius that can invent broadcasting as a business. And vice versa.

And so television broadcast and TV technology became two different industries.

The biggest question we may seek to answer as we study the entwined history of technological and industrial development is, now that we've entered an era in which the fundamental television technologies have changed, do the old lessons still apply? Are the businesses of technology invention, manufacturing and consumption still necessarily very different from each other?

There are lots of new media companies that have unique technology. Just think of Google. And there are lots of technology companies that also develop business platforms; note Qualcomm again and its MediaFLO network. But in the early days of film and radio, Edison made movies for consumer audiences and expected to dominate that business, and Marconi made radios and broadcast programming. A few decades in, more efficient industrial structures prevailed.

There will always be exceptions, and right now it sure looks like Google is one of them. Farnsworth's story proves why.

Neal Weinstock is chairman of Be Media, a systems integrator in El Segundo, Calif., and founder of research firm Weinstock Media Analysis.