In fact, a lot of airplane innovation was happening in the US during that era despite the patent being in force. For instance the seaplane was invented in the US (by Curtiss, the Wrights' most bitter foe.)
Also their patents were challenged repeatedly and, despite being interpreted broadly, upheld repeatedly because they actually were that much of an improvement over the prior art.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2355673
In fact, a lot of airplane innovation was happening in the US during that era despite the patent being in force. For instance the seaplane was invented in the US (by Curtiss, the Wrights' most bitter foe.)
Also their patents were challenged repeatedly and, despite being interpreted broadly, upheld repeatedly because they actually were that much of an improvement over the prior art.