Last week Tesla Motors CEO Elon Musk hinted that Tesla was about to make a controversial announcement, and today we learned it’s a bombshell. Where most technology companies, whether they make cars or social networks on the Internet, use patents for defense from other companies, or as weapons to bludgeon competitors, Tesla Motors is embarking on a pseudo-Open Source strategy. The company is inviting other automakers to copy Tesla’s technology, to infringe on their patents, and that Tesla Motors will not suit infringers.
UPDATE: I’ve written a deep dive into what/why/how of this announcement.
This is a bold, daring, move for any company to make, let alone one that’s facing the huge challenges Tesla Motors faces. Conventional wisdom says that small upstarts need as many patents as they can, because bigger competitors will extort money or otherwise bludgeon the small companies with patent portfolios.
Before I began writing news articles and blogging, I worked in the Silicon Valley software industry for over 20 years. I am the co-inventor on 3 patents awarded in the early 2000’s. I heard a story told by a Senior VP at Sun Microsystems telling about the time IBM tried to extort Sun for some money. IBM’s lawyers paid Sun’s lawyers a visit claiming that Sun was infringing on some of IBM’s patents, and would Sun please pay a few million dollars. That early in Sun’s history it could have screwed the company, while being pocket change to IBM. Sun was able to fend off the attack, because they actually weren’t infringing, but IBM’s lawyers warned that while Sun got off free that time that IBM has a pile of patents and surely Sun was infringing on one of them.
That’s where the conventional wisdom comes from. One can easily imagine GM or Ford or whoever having a pile of patents with which to bludgeon Tesla in a bid to drive Tesla into bankruptcy.
Musk writes in a blog post that when he started his first company, Zip2, he followed that conventional wisdom, worked to ensure the company had a bunch of patents, but learned that “receiving a patent really just meant that you bought a lottery ticket to a lawsuit”.
But, having laid down their weapons (Tesla’s patent portfolio), pledging to not suit other companies over patent infringements, will other companies do the same? This is the conundrum over nuclear disarmament, if one country denuclearizes will the other countries do the same, or will they instead see that first country as weak and launch an attack?
Nuclear weapons are such a threat to the survival of the human race that we all grew up with nightmares, and we all viscerally want nuclear disarmament. But despite the best efforts of peace negotiators over decades, the ranks of nuclear-capable countries is only growing, and we’re still armed to the teeth with enough nukes to destroy everything on the planet several times over.
Patents play not quite so devastating a role in society, but they do stifle progress. Every technology company worries about patent lawsuits. The whole rigamarole around filing for and defending against patents is a drain on everyone, and the only people who get rich off the game are the lawyers. And, patents mean innovations cannot be used by multiple companies unless the company which “discovered” the patent is willing to share the technology at a reasonable cost.
This is why Tesla Motors is taking this step, according to Elon Musk, to speed up electric vehicle adoption by allowing other companies to use Tesla’s technology. As he put it so eloquently: “Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”
Elsewhere he describes “Technology Leadership” as not being defined by a deep patent portfolio, but by the engineering talent employed by a company. Attracting engineers today means embracing some form of open source practices. Open source methodologies are now rampant in the software industry, and there are plenty of examples where companies make big piles of money on the back of open source software or hardware. I’m typing this using my iPad, am looking at the iPhone and Chromebook on the table in front of me, and pondering the mix of open source and closed source technology in these devices. Apple and Google have grown unimaginably wealthy through intelligently deploying open source software.
Clearly I’m excited about this, because it looks like a bold move which could be a game changer in the automotive industry. But, there’s a couple key questions.
- What are the precise terms of this offer?
- What does Tesla Motors mean by “in good faith”?
- The wording leaves the door open to Tesla suiting someone who infringes on their patents but not in good faith. Right? Who is going to define “in good faith”?
- In the blog post, Musk claims “applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position,” without defining exactly what is meant. The phrase “Open Source” has a precise meaning – that exact designs are published – that anyone can use those designs to build anything they want – that anyone can change/improve the design – etc.
- The phrase “open source philosophy” is, however, not so clear.
- To really adopt “open source” at Tesla Motors, all the engineering diagrams, CNC machine instructions, or whatever, would have to be published. I can’t imagine Tesla Motors doing that, and if they had the announcement would have included a link to a website. Instead the announcement talks about not enforcing patents.
- I’m expecting this means automakers who reverse engineer something Tesla did can now use that information in their electric cars.
- Tesla Motors doesn’t seem to be afraid – instead the blog post is infused with confidence that Tesla Motors is so far ahead of the other automakers that they’ll never catch up. I think the word for this is — Hubris?
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