No Pay – No Gain

One of my colleagues forwarded me an internet site about popular inventions where the inventor never made a dime.  The stories were sad but were yet another reminder that without a patent, copyright or trademark (depending upon the creative), there is no legal ownership and no opportunity to make money on an invention idea.

The following are a couple stories of No Pay – No Gain inventors who chose not to act on their inventive ideas only to later see those ideas become fantastic successes earning millions.

Daisuke Inoue

Japanese musician, Daisuke Inoue, created the multi-billion dollar business of Karaoke. Every week, around the world restaurants and night clubs have a Karaoke Night.  It’s a world wide sensation, but it all started in 1967 with Inoue trying to eke out a living as a musician in his native Japan.  Customers always wanted to sing with the band so he came up with a plan of charging a few yen per song while he played a simple background accompaniment.  From his live experiences, Inoue recorded the accompaniments onto an 8-Track Tape (the state of the art in the mid-60s).  The new system allowed people to enjoy singing in clubs without the necessity of having a live band that might not know a song, or might be unwilling to let strangers sing along.  Karaoke was born and has grown in popularity around the world ever since.

Why didn’t Daisuke Inoue patent the Karaoke process and earn royalties that would have totaled hundreds of millions of dollars?  According Inoue himself, “My first karaoke machine was made from an eight-track tape player, a guitar amplifier, and a coin box. I did not invent any of those things. They already existed. I only put them together. So at the time my feeling was, I did not really invent anything.”  He should have consulted a Patent Attorney who would have told him that putting known objects together, in a way that had never been done before, resulting in a unique outcome is very definitely patentable.  Unfortunately for Inoue, he never made more than his few yen per song because he failed to patent his invention.

Today satellite communications is commonplace but in 1945 it was pure science fiction.  In fact, it took the famous, British science fiction writer, Sir Arthur C. Clarke author of 2001: A Space Odyssey, to write an article in the October 1945 issue of Wireless World entitled: “Extra-Terrestrial Relays — Can Rocket Stations Give Worldwide Radio Coverage?”  In the article, Clarke details a practical system of satellites in a stationary orbit above the Earth relaying radio signals back to virtually any place on the planet.  Remarkably, Clarke’s vision predates Sputnik, the first man-made satellite, by 10 years, and Early Bird, the first communications satellite, by 20 years.  At the time of Arthur Clarke’s death in 2008, the satellite industry’s revenues exceeded $144 billion a year.  What did Clarke earn?  $20.00 for the 1945 magazine article.

Sir Arthur C. Clarke

It is true that filing a patent for geo-synchronous communications satellites in 1945 was possible, but the issuance of a patent on the system would have been problematic.  Clarke would later say, “I learned from my patent attorney that even if I had tried to patent the communications satellite in 1945, the patent would have been rejected because the required technology did not yet exist, and the patent wouldn’t have been worth getting because its life would only have been 17 years. The patent would have expired the year before the Early Bird was launched.”  Although he lost out on royalties from a multi-billion dollar industry, Clarke received his just recognition with the geo-stationary orbit he detailed in 1945 becoming known as “the Clarke Orbit” home for over 300 satellites in orbital residence.

The moral is clear:  No Pay – No Gain, which can be interpreted as: No Patent – No Royalties.