Patent sharing, royalty revenue and the invention of the computer
The ENIAC was a big deal in its day, both literally and figuratively. The Electronic Numerical Integrator and Computer was the first electronic, programmable, general-purpose computer. The ENIAC represented the manifestation of ideas that computer science theorists from Charles Babbage to Alan Turing had dreamt of, but which now had come into the physical world of vacuum tubes and wires. Sure, Star Trek could claim to have “invented” the matter transporter, but those boasts ring hollow until someone actually makes it possible for Scotty to beam up. The ENIAC was a marvel of engineering, and the engineers who made it rightfully went looking for their reward for doing so.
Staking a Claim
By the fall of 1944, J. Presper Eckert and his student John W. Mauchly at the Moore School of Engineering at the University of Pennsylvania decided that their design work on the ENIAC and its successor the EDVAC (Electronic Discrete Variable Automatic Computer) was complete, even though construction on those machines continued. Before filing any claims, Eckert and Mauchly circulated a letter asking their fellow engineers if anyone had a claim to the invention. Receiving no answers, they went forward.
Eckert and Mauchly filed their patent application in 1947; they eventually were awarded US Patent Number 3,120,606in 1964. In the years between those two events, Eckert and Mauchly started their own computer company. The Eckert–Mauchly Computer Corporation quickly floundered, and they sold it to Remington Rand, which became Sperry Rand.
Sperry Rand was delighted to obtain the pending patent for modern computer technology. Their attempts to corner the market on computers were not, however, the source of significant royalty revenue. Sperry Rand had entered into a patent-sharing agreement with IBM, which gave IBM rights to make digital computers. Because IBM manufactured the vast majority of computers in that era, few other companies were left to pay the 1.5 percent royalty Sperry Rand charged for licensing the Eckert-Mauchly patent. However, one company opted not to pay the royalty at all.