Tesla: Undoing the patent system

Last week, Elon Musk, the visceral founder and CEO announced that this company, Tesla, a pioneer in electric vehicle technology is making all their patents freely available to the world. Following the announcement, the patent wall at their headquarters was replaced with a giant banner that reads

All our patent are belong to you

Tesla patent wall: All our patent are belong to you

The sign is a reference to a historic meme from an old Japanese game with bad translations in the cut-scenes. More on that here.

Just to be absolutely clear, this is an unprecedented move in an otherwise highly secretive industry that has taken the world by surprise. Musk is offering something that is unheard of.

And I am not even talking of the swag of it.

It is one thing to open source software; Google did with the Android mobile operating system. And as commendable as that is, it is a totally different thing for a technology company with less than 1% market share in the US, to give up its innovations, its bread and butter, to its competitors. Giant automobile companies with huge infrastructure, marketing and production capabilities, that have struggled to innovate and be productive in this segment, now no longer have patent roadblocks to copy the best technology. Imagine the thrill of Chinese car manufacturers!

Musk writes that it is unfair that Tesla has such an advantage technology-wise compared to other companies. He wants electric cars to be a sizeable chuck of some 2 billion cars produced each year. It is impossible for his company to do that alone. So he welcomes some competition, and wants to give them a boost. Technology leaders are not those who sit on their patents, he says, but rather those who can attract and motivate great engineers and researchers to work for them. Perhaps a challenge to himself and his employees to constantly be ahead of the curve. He cites as his inspiration, the slowly brewing open source moment of technology companies such as Twitter and Google who are now slowly presenting a new thought process that side-steps patent obsession that has been the sad theme of the industry in the past.

Tesla is an industry leader in battery technology, particularly the super-charging that has cut the time-to-charge substantially. If the industry picks up these technology and they become accepted as  standards, there is huge potential for big companies like Toyota or Mercedes to bring electric vehicles to the foray. Last thing we need is another industry standards fiasco à la mobile charging pins.

If there is a future for us with sustainable energy consumption, I wonder if history will look back to when the ideas to develop really high-end electric vehicles first opened up.

Tesla model S

It is not just a fantastically generous gesture from Tesla and Musk though. Industry analysts say that it is in fact a sound business decision. Tesla is founded on big promises of innovation and growth. Increasingly there is consensus that it is not doing as well, financially, as investors had hoped.  With a looming $2.2 billion debt, Musk is really counting on the industry to adopt his technology and make charging stations and battery manufacturing at scale. He hopes to sell his better designed and branded cars on the back of industry laid infrastructure. In a world where people are only too eager to jump the bandwagon, this move may result in Tesla becoming the industry monopoly if they are able to hold on to key aspects of their technology others are unable to reverse engineer. In fact, creating an atmosphere where it is easier to build on existing baselines may kill other innovations trying to come through. We are seeing this happen right now, given that Android is a decent mobile operating systems, it is so much easier for the industry to comply with Google and adopt their operating system, than to build something from scratch.

What we know for certain is that the patent system is quickly becoming obsolete and Elon Musk as pulled yet another unicorn from his hat. It is a characteristic high risk, high reward move that we have become accustomed to seeing from him.  His words in the blog post are cautious suggesting that he may still use his patents as defence against potential trolls. Either way he has put his chief innovators and technology people on the spot. The world is now watching.

Overall I consider Tesla’s patent move a good news. Perhaps there is an underhanded opportunity under the guile of altruism but one thing is for certain, Tesla and Musk have yet again broken stereotype and convention. So now others have no excuses.


3 thoughts on “Tesla: Undoing the patent system

  1. “He hopes to sell his better designed and branded cars on the back of industry laid infrastructure”.
    If McLaren or Porche who have already proven electric engine technologies use these patents to build a better battery, will his cars be considered better designed and branded? Assuming his battery and super-charging patents are open as well.


  2. Yo! So I meant that he will be able to compete with Chinese manufactures in that way.
    Tesla cars are like the iPhones of the industry, costing 10x more than others.
    The thing is, the Tesla charging stations and super-charging are not compatible with Mercedes and Toyota as of now.
    Plus both these companies already have some investments in Tesla in return for patent access.
    So if they got what they want, this move will have no meaning for them.

    Its not exactly clear what open means, I assume it means that if you reverse engineer a Tesla technology, he promises not to sue.
    That’s all.


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