The recent move by Elon Musk to open thousands of Tesla’s patents to the public probably left you wondering, “What the heck is all this fuss about?” or “Why would people care so much about Tesla’s patents?”
Ultimately, it’s about what could be a great benefit for you (and me), the consumer -- and by that, I don’t mean all the coverage around how this will be good for the electric automobile industry. Though that is certainly true, there’s a lot more to it than that.
By making this move, Musk has really set a precedent for why all technology companies should consider going down the same path. Why? Because “open” environments benefit the entire ecosystem -- the companies, the consumers and the industry at large.
How so? Through three simple benefits:
Better Products for You
There is no better living proof for this than the web. Tim Berners-Lee, inventor of hypertext -- the basis of the World Wide Web, decided the technology should be available to all for free without charging a penny for it. I firmly believe that doing so has led to an open and democratic web whose benefits we enjoy today.
How does this all add up? The benefits provided by patents today are questionable given the laws and freedoms surrounding the patent granting process. The argument has been made that patents protect inventors as they prevent “copy cats” and this protection incentivizes people to take greater risks and innovate.
This may have been true at some point in time, but no longer holds true today. Patent “trolls” -- companies that file patents and sit on them -- suing anybody that infringes their patents, win. And that’s a loss for all of us. Larger corporations also flood the market with patents in and around core technology products preventing young startups from inventing products in a space close to theirs or holding them ransom should they become successful.
None of this helps innovation. It hinders it. Remove these hindrances or restrict them and YOU will see better products -- way, way better products.
Less Expensive Products for You
A level playing field encourages competition, and competition brings down price. Following an “open” path with patents creates standards and protocols that are adopted by all companies and in turn result in a faster growing industry, which is a net benefit to consumers.
Think about this: companies usually spend between $40,000 and $100,000 per patent. A total of 542,000 patents were filed in 2012 with the USPTO and this does not even consider the cost of frivolous patent litigation, a lot of which results in distraction for companies that could improve processes and innovate to drive cost down.
More Choice for You
Rather than stifling innovation, a more restrictive patent granting process or a more “open” philosophy for allowing use of patents will result in more products in the market. Right now, companies and in many cases startups, have to file patents out of fear that they will be sued by patent trolls and larger companies that sit on huge patent libraries, some of which are based on non-existent products. This causes all companies to get on the hamster wheel of patent filing.
Instead of protecting the past, companies could focus on the future. With the distractions gone, companies will be required to continually innovate. Such innovation will lead to new disruptive products being released in faster cycles.
Many have asked me if I’m preaching altruism. Not at all. In fact, I believe every inventor should have the opportunity to make profit from an invention should they choose to do so. As an entrepreneur I believe in developing products and businesses that can create value not only for my customers but also for my shareholders.
I’m also by no means suggesting companies give up patenting their inventions. Companies should patent the most core part of their technology -- they should just not treat it as a protectionist mechanism to prevent competition. Finally, the pace of technology innovation calls into question the value of patents in todays’ fast paced world.
I believe this is the time for change -- to get off the hamster wheel, open some of our patents to the pursuit of better products, and benefit the most important stakeholder in the capital market -- the consumer.
Title image by PrakapenkaAlena (Shutterstock)