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Earlier this week, we wrote about rumors that Elon Musk was going to free up some of Tesla’s patents to encourage more people to adopt the company’s Supercharger system. As we noted this shouldn’t be controversial, but it was still considered as such. Elon Musk has now made the official announcement and it actually goes way beyond what was originally rumored. It’s not just about the Superchargers, it’s all of Tesla’s patents. But, better than that, Musk explains why he no longer thinks patents make sense and even demolishes the one argument that even many patent skeptics make: that they’re “still needed to stop big companies from copying your innovations.”
As we’ve explained in the past big companies almost never recognize truly disruptive innovation when it happens. This is for a variety of reasons, including the basic innovator’s dilemma, but also just because companies are so focused on their own things, it’s tough to get them to realize outside innovation. Furthermore, even when they do copy, it’s actually pretty rare for them to get it right. That’s because, from the outside, they only copy the superficial stuff, and have no idea why something is really successful. And thus, even if they have the “exact plans” for the competitor’s technology or process, they don’t understand the little things that make customers love them. Similarly, innovators are constantly innovating, so by the time the copycat catches up, they’re still behind.
But, an even bigger issue, as we explained before, is that having more viable competitors can also enlarge the overall market. So if a company like Tesla has no viable competitors, they’re left educating the market and building all the infrastructure themselves — and that’s pure cost. Opening up their patents actually helps Tesla in the long run by (hopefully) spreading out some of those costs, and increasing the size of the overall market. This is what many patent system supporters just don’t get — but Musk clearly understands deeply.
He talks about how he used to be a patent system believer, but he’s been converted in the other direction. And while he avoided patents at some of his companies, with Tesla he was convinced they were necessary, because “the big car companies” might just copy everything he’s done. Now, he says, he knows that’s not true, and he actually would prefer they do copy Tesla’s work.
At Tesla, however, we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. We couldn’t have been more wrong. The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales.
At best, the large automakers are producing electric cars with limited range in limited volume. Some produce no zero emission cars at all.
Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis. By the same token, it means the market is enormous. Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.
We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform.
This is absolutely true and it’s great to see it stated so directly. If only other companies were willing to do so. As for the actual way this will work, Tesla has announced that it “will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” That’s not entirely putting the work into the public domain, but it’s a good step. Years ago, I had hopes that Google and others would do something similar, but it has not come to pass. Google had made a similar pledge, but only for open source projects, and Twitter has basically given its own engineers the ability to veto any offensive patent litigation efforts by issuing their own license. But Tesla has now gone even further than both of them by basically telling any competitor to feel free to make use of its patents without worrying about getting sued.
Unlike so many other companies and company leaders, Musk appears to recognize the simple fact that innovation is not in how many patents you get, it’s in how you actually build amazing products and services that people want — and patents can often get in the way of that, rather than help it. It’s nice to see him declare that so directly. He even took the symbolic gesture of removing the framed patents from Tesla’s lobby wall. This is great to see and hopefully it will inspire others in the tech industry to put down similar stakes as well.
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