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Tesla's patent giveaway isn't as strings-free as it seems

The manufacturer of the world's best electric cars is opening up its patent portfolio for anyone who wants to use it "in good faith" - why?

A Tesla showroom in Miami, Florida. Photo: Getty Images
A Tesla showroom in Miami, Florida. Photo: Getty Images

Usually, we expect an innovative company to protect its products. Tesla Motors creates electric cars that are some of the best in the world in their class, primarily by ignoring conventional wisdom on the capabilities of lithium-ion batteries and developing their own, better ones, which it patenteds. Yet Elon Musk, Tesla's founder and owner, has now said that they're giving all of those patents away - sort of:

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.

The thing to remember with Elon Musk is that he's in the grand tradition of American businessmen who understand the importance of putting on a show. He mentions "a wall of Tesla patents in the lobby of our Palo Alto headquarters" that has now been taken down, but since Tesla still owns the patents it's entirely a flashy gesture. It wouldn't be surprising if Musk had first put all of his patent certificates on the wall because he knew that one day he could make a statement by taking them down.

To say that Tesla is "giving away" its patents - as has been said in many reports - is untrue. What Tesla is doing is choosing, as Musk specificall states, to "not initiate patent lawsuits". The intention is, Musk writes, to spur on the production of electric vehicles, because "it is impossible for Tesla to build electric cars fast enough to address the carbon crisis". The lack of a firm legal commitment is at best curious, at worst worthy of suspicion. If taking things down from walls signified a binding legal act then 

It's certainly not an example of the "open source movement", even if it is intended to be "in the spirit" of it. The clever thing about open source licensing is that it subverts copyright laws by switching around what they legally protect against. Normally, copyright gives the holder the right to sue to stop someone from using their intellectual property without permission. The spirit of open source generally demands the opposite - it defines how someone else is allowed to take something and break it apart, it provides the instructions (the source code) to do so, and it demands that anything new that comes as a result is also shared along the same lines and remains equally open source. The copyright system is used to protect the freedom to remix and share, and to give legal protection to those who like the idea of their work being taken and meddled with.

Tesla's cars are expensive, luxurious models of the Mercedes-Benz, Audi, BMW variety. One way of reading why Musk's opened up his patent portfolio is that a strategy of making the best electric cars in the world won't succeed as long as electric cars are still seen as unusual, unreliable or eccentric. That's partly because the more normal electric cars are, the more likely higher-wealth individuals - we're looking at you, middle-aged men in suits - are to choose an electric car, and once it has overcome that reluctance Tesla can fight on an equal footing with other brands and (in theory) win thanks to superior products. Targeting wealthier customers as a way of infiltrating the mainstream market has been an explicit part of Tesla's business plan since the start.

It's hard to compete in your ideal marketplace if it doesn't exist yet, after all, and if it has the added bonus of "killing gasoline" and reducing worldwide carbon emissions then all the better. I'm reminded here slightly of the (mythical) tale that Henry Ford paid his workers so much more than his competitors because he wanted ordinary people to be able to buy the cars they were making. Musk is also completely right to complain that no other major automobile manufacturer is trying to do what he's doing, and make an electric car that doesn't just match the gasoline car, but better it.

The other part of that strategy to consider, though, is the infrastructural benefit Tesla gets. At the moment, Tesla owners are given free access to the company's Supercharger stations, which can recharge one of Tesla's batteries in roughly twenty minutes at most. Just as it would probably have stunted the growth of the petrol-powered car if every manufacturer insisted on having its own petrol stations, with their own shape of nozzle on the pumps, it makes a huge amount of sense to encourage the acceptance of Tesla's Supercharger network as the industry standard. Tesla has hinted in the past that other companies would be allowed to have their cars recharge at Tesla's stations as long as they pay a proportionate maintenace fee, but Tesla is presumably aware that it'll be easier to cover the world's existing road networks with charging stations if it gets help. Supercharger networks as ubiquitous as petrols stations would have an immense impact on "range anxiety", the often-irrational fear electric car owners get that they'll run out of power and get stranded before reaching the next fuelling station.

Tesla's patent portfolio contains all kinds of technological innovations, from plugs to wiring to materials, that give its cars the fast-charging, high-capacity batteries that define Tesla's cars, but that doesn't mean that Tesla doesn't also see value in some of the patents that other auto manufacturers own. Reportedly, Musk has been meeting with BMW to discuss swapping access to patents, so maybe that was the influence for this announcement, but Musk has also been very clear that he's seen quite how crap the patent system has become. Patents are an absolute crusher of innovation in technology right now. Musk writes: "[M]aybe they were good long ago, but too often these days they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors." He's no doubt thinking of Apple, Samsung, Google and others spending billions on lawsuits about mundane details like the buttons on a smartphone instead of on new software or products. (And, lest it be forgotten, Google's Android is the world's most popular smartphone OS in large part because Google made it open source and available to all manufacturers.)

The true test of Musk's generosity will come when some company crosses the line from "good faith" to "bad faith". That is likely to come when some company uses Tesla's patents in the spirit of open source to actually threaten Tesla, with no patents of its own to offer in exchange. Maybe then Musk will be glad he only took down those patent certificates from the wall of Tesla's lobby, and didn't do anything too drastic with them, like burning them.