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"How did the auto industry resolve this?"

Perhaps the auto industry's period of innovation and establishment happened during a more rational patent regime.

The early automobile and airplane industries were full of all out patent wars. The airplane patents problem were only settled quickly by World War I and an act of Congress.

Early 20th century patents only lasted, I believe, 17 years, so all those particular basic fights are long in the past. We're just living through the opening rounds of this battle.

Not really.

Google "George Selden patent"

Interesting. Then according to this result, http://inventors.about.com/library/weekly/aacarsseldona.htm , one rational response to patent trolls (established and loved, or merely trollish) is to not pay, to fight.

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