The Lesson of Lizzie Magie, Monopoly, and Patents

The United States Constitution, Article I, Section 8, Clause 8: “The Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

The US Patent system is incentive driven, focused on promoting innovation. One with an idea can secure rights in it, for a time, to keep others from capitalizing on it. This has led to the general notion that an idea is a valuable thing—that an idea can lift you to the highest echelons of success. And it can, but not by itself. So goes the lesson that the inventor of “The Landlord’s Game,” Elizabeth “Lizzie” Magie learned the hard way when her idea was transformed into Monopoly without her reaping the benefits of her patent.

Lizzie Magie and Monopoly

Magie, a freelance typist and stenographer by day and political activist by night, sought to disseminate her ideals in a more creative and (hopefully) effective way. She created the Landlord’s Game as a tangible example of the pitfalls of capitalism, illustrating how wealth inherently flows upwards.

In 1903, she secured a patent for her game, but did not seek to capitalize on it in any meaningful way. In 1924, she again patented the game and had it published through a small game company. Given the game’s political nature, however, it became popular only in limited crowds.

The Rise of Charles Darrow

Eventually, in 1932, the game made its way to a dinner party attended by Charles Darrow, an unemployed salesman. Darrow, desperate for a come up, “created” his own version of the game and dubbed it “Monopoly.” Notably, he removed any overt anti-capitalistic themes and made the game purely for entertainment. Darrow was then able to publish through Parker Brothers and received royalties for the rest of his life.

As was bound to happen, Parker Brothers learned of the near-identical Landlord’s Game and discovered Magie’s patent. Seeking to clear any title issues with its investment, Parker Brothers got Magie to sell her rights in the patent for $500, attached with the condition she be accredited in every copy sold.

Thus, Monopoly was born.

The Value of an Idea

Before anything more, it is important to note the wrongdoings by Parker Brothers and Darrow. Darrow stole Magie’s idea; there is no way around it. In interview after interview, Darrow reiterated that it was his original idea—that was a lie. Further, Parker Brothers failed to hold up their end of the deal and did not give Magie the credit it promised. Both parties are unjustifiably wrong for falsely pushing the narrative that Darrow was the original creator.

There is, however, another shrewd lesson to be drawn from Magie’s story.

The Role of Improvement in Innovation

Importantly, while the patent system seeks to incentivize original ideas, it also seeks to incentivize improvements on existing things. If the original patent holder could hold the exclusive associated rights in perpetuity, then they would never meaningfully improve their idea, and no competition could enter the market to drive down prices. This is why patents are time limited.

In theory, if you take out the underhanded nature of Darrow and Parker Brothers’ actions, what they did was natural. There is nothing inherently wrong with improving on an existing thing and then capitalizing on it. In fact, the patent system seeks to incentivize this very thing. Of course, lying about the existence of the giant’s shoulders on which you stand is another thing entirely.

Darrow’s Business Acumen vs. Magie’s Idea

Nevertheless, Darrow’s efforts were arguably the driving force behind popularizing Monopoly into the cultural phenomenon it is today. When first rejected by Parker Brothers and other game companies, Darrow doubled down and invested his own resources into self-publishing the game and got a local store to agree to stock it for the holiday season. The game sold successfully, and Darrow turned this success into a deal with Parker Brothers for national publication.

Lizzie had an idea, sure. But Darrow had the wherewithal to make it a national phenomenon, a household name. This begs the question: how valuable was Magie’s idea really?

The Harsh Reality of Ideas Without Execution

To quote The Fall of House of Usher, “An idea is nothing. An idea is a fart that your brain makes.” Crass and harsh as this adage may be, the story of Lizzie Magie illustrates how it rings true. You might write a movie, but it holds nothing but sentimental value if no one makes it. You might synthesize a new drug, but it’s worth nothing if you can’t get it to market.

The lesson of Lizzie Magie is this: The value of an idea is in what you can do with it. In the 29 years between Magie’s invention and Darrow’s iteration, Magie did what she would with her idea. After this time, Darrow came along and did what he could. Such is the nature of innovation.

Why Patents ARE Valuable

A patent is the first step in capitalizing on your innovation. Because the US is a first-to-file system, it doesn’t matter if it was your idea. Without a patent, anyone can do whatever they want with it.

Magie’s story shows a patent alone won’t make you a success—it requires some business acumen as well. But a patent will allow you to keep others at bay. Especially those with the capital to out-produce small and first-time innovators.

Whether you carry out your idea yourself in a business or simply license your patent to another who can, the patent protection afforded by this form of intellectual property is very valuable.

Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.

This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.

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