On April 25, 1961, Robert Noyce, then of Fairchild, was issued U.S. Patent 2,981,877 for the first silicon-based integrated circuit. The earlier-filed patent application of Jack Kilby of Texas Instruments (TI) was still in the queue at the U.S. Patent Office. In the end, Intel would become Fairchild’s heir and boast annual sales of over $50 billion, leaving TI and other companies in the dust. Much can be learned from Intel’s (and Noyce’s) success, which grew out of the integrated circuit (or computer chip) wars of the 1960s. Those wars were fought over people, inventions, and patents. Here is the bloody story in brief, concluding with three profitable takeaways.

From Transistor to Integrated Circuit

Long before Noyce and Kilby entered the scene, Bardeen, Shockley and Brattain won the Nobel prize in 1956 for their invention of the transistor at Bell Labs in 1947. In 1952, British engineer Geoffrey Dummer presented the concept of the integrated circuit, but the U.K. military failed to recognize its potential, and U.K. companies were unwilling to invest their own money in development of the concept.

Patent Attorney Makes A Difference

From December 1957 to March 1959, Fairchild physicist Jean Hoerni invented the planar transistor. While Fairchild’s inventors were writing it up, their patent attorney John Ralls asked if they had fully thought through the implications. See Robert Noyce oral history (1975); R. Schaller, Origin, Nature and Implications of Moore’s Law (“Schaller”). They realized they hadn’t, and Noyce went to work, figuring out how to make the planar integrated circuit, which would lead to the issuance of the ‘877 patent and the recognition of his role as one of the two independent inventors of the first modern integrated circuit.

Kilby vs. Noyce

Kilby’s U.S. Patent 3,138,743 was filed six months earlier than Noyce’s, yet it yet issued three years later. It seems that the U.S. Patent Office wasn’t quite sure what to make of Kilby’s patent application.

Note to the reader: Don’t feel bad if the U.S. Patent Office fails to recognize the merits of your inventions. You too may change the world—perhaps even win a Nobel prize—if you persist in the face of rejection.

Returning to our story, Kilby built his miniature chip on a slice of germanium with “flying wires” made of fine gold. He famously worked alone, because everyone else at TI was on vacation, while he had not been employed long enough to earn leave. It worked. But germanium is expensive. So is gold.

Ultimately, Noyce’s design would prevail. It was cheaper and easier to manufacture. Silicon chips became disposable. They proved scalable as transistors shrunk and the number per chip increased. Indeed, Moore’s Law—that the number of transistors in an integrated circuit would double every two years—was a recognition in 1965 of the work started by Hoerni and Noyce. See Schaller.

History would recognize both Noyce and Kilby as independent inventors of the integrated circuit.

Kilby Outlives Noyce, Wins Nobel Prize

Further complicating history is the fact that of the two inventors, only Kilby would win a Nobel Prize, and that not until the year 2000. Even at that time, it was widely thought, as reported by the New York Times, that if Noyce had lived longer, he would have shared in the prize. (One must be alive to qualify for a Nobel nomination.)

Belatedly, 40 years after the fact, the Royal Swedish Academy followed other leading bodies in crediting Kilby for his contribution to technology that would enable the Internet. Other scientists grumbled that miniaturization of circuits was too applied, too much like engineering, and too “commercial” to deserve recognition as a fundamental advance in physics. See 3 Men Vital (New York Times, Oct. 11, 2000). Kilby in turn gave some credit to Noyce, though rather less than glowingly.

The Integrated Circuit Patent Wars

Returning to the era of the early 1960s, there were two interesting phenomena. One is that Fairchild and TI had a big fight over the patent rights, i.e., over the right to exclusive use of the integrated circuit. The other is that while the U.S. Air Force was interested, the computer industry didn’t care. They didn’t see the need for microchips. Presentations by Kilby and Noyce at technical conferences were appreciated mainly for entertainment value.

But ultimately industry began to recognize the value of the microchip. Patent wars ensued, especially from 1962 to 1966, and they spilled across states and between the U.S. and Japan. Indeed, one can trace the rise of the Japanese electronics industry—and its robust patent system—to that era.

Fairchild and TI Settle Their Differences

As the stakes rose, Fairchild and TI settled their fight in 1966 when they agreed to share ownership by cross-licensing each other and splitting the royalties to be paid by other companies coming late to the party.

The Well-Rounded Inventor Robert Noyce

Noyce defied the image of the techie-nerd. He was handsome, athletic, and personable, even while his mind was so quick that his friends called him “Rapid Robert.” He grew up in Grinnell, Iowa, where his father was the town preacher. He attended the local college, where he excelled, yet he also was exiled and suspended for a semester for his role in stealing a pig for a luau.

Noyce: From Grinnell to Intel

After graduating Phi Beta Kappa from Grinnell College, Noyce went on to earn a Ph.D. at MIT, and then to work for Nobel Prize winner Shockley, an inventor of the transistor. Noyce was one of the “traitorous eight” (including Gordon Moore and Jean Hoerni) who left Shockley to go to Fairchild, and, after being passed over for CEO of Fairchild, he subsequently joined Gordon Moore in co-founding Intel in 1968. Noyce was a mentor to many in Silicon Valley, including Steve Jobs.

Intel: Heir to Bell Labs, Shockley and Fairchild

Thus, Intel ultimately was the beneficiary of the pioneering work by Bardeen and Shockley at Bell Labs and the rapidly following work by Hoerni and Noyce at Shockley and then at Fairchild.

Three Takeaways from Computer Chip Patent Wars

Here are three takeaways from the computer chip (integrated circuit) wars:

  1. The value of an invention is not always recognized immediately—either by the company, or by the industry, or by the Patent Office;
  2. A skilled patent attorney can make a world of difference (John Ralls’ insightful question led to Noyce’s invention of the planar integrated circuit that powers Intel and every other computer chip);
  3. Change can happen fast: Harness it quickly, or you’ll lose it (Shockley and Fairchild lost Noyce and integrated circuit leadership to Intel).