Today in Business History: Beer, Patents, and Doughnuts

Today in Business History: Beer, Patents, and Doughnuts

On this day in economic and business history ...

Two of the world's largest brewers agreed to become Anheuser-Busch InBev on July 13, 2008 in a $52 billion deal, bringing an occasionally acrimonious month-long takeover battle to a close. The drama had started in mid-June, when InBev -- which had become the world's largest brewer when it was created in a megamerger four years earlier -- made a $46 billion offer to buy Anheuser-Busch. This unsolicited offer was rebuffed two weeks later, and InBev began legal wrangling and shareholder cajoling to tilt the deal to its side. In the end, raising the all-cash offer to $70 a share from the previous level of $65 was enough to bring everyone to the table to get the deal done.

Five years after the $52 billion deal process began, AB InBev made another big splash in the acquisition market by purchasing Mexico's Grupo Modelo for $20.1 billion. That deal enhanced AB InBev's already-dominant stature in the global beer market, creating a super-brewer that accounts for more than 20% of all beer sales around the world. No other company claimed more than 10% of the market at the time.

The first (numbered) patent
The United States has been granting patents almost from the day it gained its independence, but during the early decades of U.S. history, none of these patents were numbered. That changed on July 13, 1836, when the patent office granted Patent No. 1 to John Ruggles for an improved steam locomotive wheel design. Ruggles' position as first in line was no accident -- as a senator from Maine, Ruggles chaired the Committee on Patents and the Patent Office, and his legislative efforts to modernize the patent system earned him the moniker "Father of the U.S. Patent Office."

Ruggles' first numbered patent also managed to hold on to its number because of a fire that would sweep through the Patent Office in the winter of 1836, destroying many of the unnumbered patents and thus preventing anyone from going back and putting them all in proper numeric order. Those unnumbered patents, numbering nearly 10,000 (the exact total was lost in the fire), were later known as the X-Patents and had covered such historically important inventions as Eli Whitney's cotton gin and Samuel Colt's revolver. After nearly 180 years of numbering patents, the U.S. Patent Office has processed more than 9 million of them, including nearly 700,000 design patents and more than 23,000 plant patents. Nearly 600,000 patent applications are now filed each year, resulting in nearly 300,000 new patents.

Patents over the airwaves
Another important patent was granted on July 13: Guiglielmo Marconi was awarded the first U.S. patent that would define radio technology on July 13, 1897. This invention, popularly called the "wireless telegraph" in its early days, would earn Marconi the Nobel Prize in 1909, after years of increasingly ambitious tests proved that the only limit to radio's transmission range would be the technology used to send and receive its signals.

Marconi established the Wireless Telegraph and Signal Company a week later in Britain, and this company soon expanded its reach across the Atlantic. World War I pushed Marconi out of the American market, when government agents seized his corporate assets and patents for wartime use. Rather than return the patents to an Italian inventor, the U.S. government decided to transfer ownership to an American company created by General Electric : the Radio Corporation of America, or RCA. RCA eventually became more powerful than Marconi had ever been, which forced the government to cleave it off from GE after helping to create it in the first place.

Mmm, doughnuts
The first Krispy Kreme opened its doors in Winston-Salem, N.C., on July 13, 1937. It was one of the first doughnut stores to make inroads in the American South, and it was also one of the earliest such stores to use a mechanical production line. The first Krispy Kreme was built on such a shoestring budget that founder Vernon Rudolph had to cajole a local grocer into lending him the necessary ingredients for his first batch. The Krispy Kreme business model that's familiar to its fans was in evidence at this first location -- Rudolph focused on selling large amounts of doughnuts wholesale to nearby grocery stores, but he also made sure to entice customers by giving them a clear view of the production process as the doughnut machinery did its work. The sugary glazed donuts that came out of that bakery conveyor belt quickly caught on with North Carolinians, and then with the rest of the world. Today there are nearly 800 Krispy Kreme stores worldwide.

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