Tesla's Patent Giveaway Fuels Electric Car Enthusiasm
There are differing opinions as to why Tesla CEO Elon Musk decided to open source Tesla's patents, but the move seems to have drawn more positive than negative reactions. Nissan and BMW reportedly are interested in Tesla's technology. Musk knows he needs to get other companies interested in working on battery and charger development if his own company is to succeed, said tech analyst Rob Enderle.
06/17/14 10:32 AM PT
Tesla Motors CEO Elon Musk threw the automotive industry into a tizzy last week, when he announced that he was throwing open the company's patents.
Some hailed the move as yet more proof of the abysmal state of the United States patent system; others opined that it would give the electric car industry a boost; others just penned paeans of praise to Musk.
But -- and there is always a but -- there were cynical reactions as well, with some pointing out that Musk's stated aversion to patents meant some key technologies might not be in the documents he offered to the auto industry, and others suggesting that Musk was being self-serving rather than altruistic.
Flurry of Reactions
Musk announced his intentions on Tesla's blog, garnering more than 400 responses. most of which were positive. Take, for example, that of mrwelsh: "As a stockholder and a Model S owner, but mostly as a temporary resident of a threatened planet, I highly approve and am cautiously optimistic that this move will accelerate the cause of electrifying transportation."
However, Robert Fahey was somewhat skeptical: "This is a rare situation where rivals can do much better if they share technology and take advantage of shared experience and buying power," he wrote. "But this begs a big question: If Tesla is supply-constrained right down to the batteries, and needs a new factory just to keep its head afloat, how could any rival leapfrog Tesla even if it has the blueprints to do so? Where would it get the goods?"
Fahey didn't see "any significant change to the automotive landscape coming anytime soon, patents or no patents." But he did "see yet another PR boost for Tesla here."
The State of the Electric Car Industry
The market for electric vehicles is small; Tesla produced 7,353 Model S vehicles in Q1 for the global market.
The main issues holding down demand are consumers' lack of awareness, the need to go through auto dealers, an inadequate infrastructure for charging electric vehicles, and high production costs -- even though they have dropped sharply over time.
Although automakers plan to build a network of charging facilities throughout the U.S., Tesla only inaugurated its 100th supercharging station in April.
"Musk ... knows his efforts will likely fail if he can't get more companies working on batteries and fast charger improvements," Rob Enderle, principal analyst at the Enderle Group, told LinuxInsider.
Nissan and BMW reportedly are interested in Tesla's technology.
An industry standard for charging stations would be useful, and Musk "just wants to make sure there isn't a competing standard that comes in and crushes them, so in that way opening up his patents is helping Tesla as much as anything," Daniel Castro, senior analyst at the Information Technology & Innovation Foundation, told LinuxInsider.
Helping Reform the US Patent System
Patents these days "serve merely to stifle progress, entrench the positions of giant corporations, and enrich those in the legal profession rather than the actual inventors," Musk said.
"When one of the most innovative companies in the country criticizes the patent system, it is clear the system isn't working as it should," Daniel Nazer, a staff attorney at the Electronic Frontier Foundation, told LinuxInsider.
Musk's move "should provide some extra support for reform [but] with legislative reform stalled in the Senate, we'll need many companies and individuals to push for reform," Nazer said.
Congress has been holding hearings on patent reform for several months, and a number of bills on the issue have been introduced in both chambers.
They include H.R. 3309, the Innovation Act; the Patent Abuse Reduction Act of 2013; the Patent Litigation Integrity Act of 2013; and S. 1720 -- the Patent Transparency and Improvements Act of 2013.