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Tesla’s patent giveaway is good business- and highlights the need for reform
Indian automobile manufacturer Mahindra and Mahindra will reportedly soon take a metaphoric look under the hood of Silicon Valley-based Tesla Motors’ electric cars to advance the technology that drives its own fully electric vehicles. Made possible by Tesla CEO Elon Musk’s announcement that the company would symbolically take down its patent wall to open up its technology to anyone who might want to use it “in good faith” and renounce enforcing its patents, this review is what Musk intended to encourage.
Tesla’s patent giveaway is an example of a public good meeting good business. While earlier, any attempt by peer automakers at understanding Tesla’s proprietary technology would have involved subterfuge and invited lawsuits, the decision to open-source the company’s patents means competitors can replicate and, crucially, improve upon Tesla’s technology. Instead of focusing on ensuring that their patents are in the clear, companies can focus on building a better electric car, thus expanding the overall market. The more electric cars there are on the market and the faster they attain a critical mass of users, the more pressure there will be on governments to invest in building the necessary infrastructure, such as charging stations.
Tesla’s patent pledge is an example of Silicon Valley’s attempts to deal with an increasingly broken US patents system. Other companies, like Twitter and Google, have made commitments aimed at reducing patent litigation. As broader and more dubious patents are granted, so-called patent trolls file frivolous lawsuits, not to protect true innovation, but to slow competitors down or siphon profits. The smartphone patent wars have embroiled all major players in an unremitting and increasingly ridiculous campaign to stave off competition. It is encouraging, therefore, that more companies are seeing the value in creating new technologies rather than doggedly pursuing lawsuits against competitors, which stifles innovation and leads to higher costs for everyone.
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