"Radical Patent Move" Speculation

[Papafox]

Quote from this WSJ article:

Another important part of that article involves the scope of the patent sharing:

In a Q and A with reporters, Mr. Musk said the patents in question include those that relate to how the electric powertrain integrates with the rest of the car. There are limits to the “open source” approach, he said.
“We wouldn’t want someone to mimic our car to …trick people into thinking it’s our car when it’s not,” he said.

 

[Johan]

Another important part of that article involves the scope of the patent giveaway:

In a Q and A with reporters, Mr. Musk said the patents in question include those that relate to how the electric powertrain integrates with the rest of the car. There are limits to the “open source” approach, he said.
“We wouldn’t want someone to mimic our car to …trick people into thinking it’s our car when it’s not,” he said.

An example of his definition of "good faith" (vs not).

 

[Curt Renz]

...Tesla is going to be making most of their profit eventually from selling batteries instead of cars. lol

Not only Tesla Motors, but also Panasonic. One of the motives for making the patent announcement may have been to inspire Panasonic to more quickly, unambiguously and aggressively partner with Tesla in the Gigafactory ventures.

 

[callmesam]

From the WSJ:

Patents, he said, shouldn’t be so important. “You want to be innovating so fast you invalidate your prior patents.”

When you know you've won the race, you can't take home every trophy. There have to be Silver and Bronze medals awarded. Elon is throwing a lifeline to any competitor that can help bend the EV curve.

 

[Papafox]

Not only Tesla Motors, but also Panasonic. One of the motives for making the patent announcement may have been to inspire Panasonic to more quickly, unambiguously and aggressively partner with Tesla in the Gigafactory ventures.

Curt, your explanation sounds very plausible, especially considering Elon's comment that EV makers should adopt efficient battery technologies such as the small cells used by Tesla. Clearly Panasonic must be listening.

 

[Benz]

I have a question.

Does this mean that all new innovation that will be realised by Tesla Motors as from tomorrow will also be available to others to be used for their own EV's?

 

[RABaby]

I have a question.

Does this mean that all new innovation that will be realized by Tesla Motors as from tomorrow will also be available to others to be used for their own EV's?

Musk is opening the patents, but he may elect to forgo patents in the future, as with SpaceX. So if there are no additional patents, what is published for others to use? I think what is out and available is what other manufacturers are free to use. They will be free to innovate from there and show their own excellence in engineering. Tesla will still win.

So basically, I would say no new developments will be offered up to use, unless Musk finds a way that releasing it will also benefit Tesla. Investors in TSLA do not need fear a loss in value. Musk is a capitalist with values and a conscience. He is not a Wall Street capitalist.

 

[anticitizen13.7]

From the WSJ:

Patents, he said, shouldn’t be so important. “You want to be innovating so fast you invalidate your prior patents.”

I'd also add that patents are often an illusory protection, because many companies will simply ignore patents, and count the cost of litigation as just another business expense.

The Apple/Samsung dustup is the most prominent recent example. Samsung's strategy was to pretty much not give a hoot about patents, and flood the market with Android phones containing iOS-like features.

 

[EVNow]

No big OEM is going to outright "use" Tesla patents - mostly out of pride. But I can see many Chinese companies doing that boldly now - not that they care about our patent system anyway.

So, this is mostly a PR stunt.

 

[Benz]

People and/ore companies with lots of money (Google/Apple) now have a great business oppertunity and can invest their money and make even more profit.

 

[jhm]

No big OEM is going to outright "use" Tesla patents - mostly out of pride. But I can see many Chinese companies doing that boldly now - not that they care about our patent system anyway.

So, this is mostly a PR stunt.

So you're an OEM with pride. You come out with an EV that can't use the Supercharger network. Even if you have a product that can charge faster than Tesla and have invested $100M in your own super fast charging infrastructure, your potential customers will still wonder why buy a car that can't use the Supercharger network. Stupid pride leads to stupid products that smart people will not buy.

- - - Updated - - -

If releasing the patents leads to the end of the compliance car, especially hydrogen fuel cell variety, that would be a step in the right direction. We need a couple of second tier automakers to run with this and create a Tesla clone market. This will be enough to satisfy consumers who might otherwise buy a compliance car and flood the market with regulatory credits. This would remove any motivation to make a compliance car and certain CEOs can stop whining about losing money on every compliance car they sell. At that point the bar for entry into the EV market will be raised considerably higher. Automakers will have to decide if they want to make a serious investment to make money at it, or sit on the sidelines.

 

[anticitizen13.7]

No big OEM is going to outright "use" Tesla patents - mostly out of pride.

I think that this is probably true, because it would be conceding defeat on the part of the ICE automakers. Also, does anyone know whether Tesla's statement that it will not enforce patents actually precludes them from future litigation to defend those patents? The "good faith" part of Elon's statement is vague enough that that I can see pretty much every General Console at the big automakers telling the executives to stay as far away from the "free patents" as possible.

 

[DaveT]

Here's the link to the recorded conference call with Elon Musk from earlier today:
http://www.media-server.com/m/p/6vpa5qod

This is a must-listen for all shareholders.

 

[UCSB]

Curt, your explanation sounds very plausible, especially considering Elon's comment that EV makers should adopt efficient battery technologies such as the small cells used by Tesla. Clearly Panasonic must be listening.

I agree. The blog's title also makes me believe that, at least partly, this was meant to spur on Panasonic. Gutsy move...

 

[jhm]

I think that this is probably true, because it would be conceding defeat on the part of the ICE automakers. Also, does anyone know whether Tesla's statement that it will not enforce patents actually precludes them from future litigation to defend those patents? The "good faith" part of Elon's statement is vague enough that that I can see pretty much every General Console at the big automakers telling the executives to stay as far away from the "free patents" as possible.

It would be easy enough for a company to get written permission prior to use of patent.

 

[pGo]

Tesla is a lot like Apple. It is inventing a new industry from a base industry. It does not have any patents of the base industry. However if Model s and Gen 3 are the iPhones, Elon wants to make sure BMWs and Diamlers don't come after Tesla when it is wildly successful. By giving away electronic car recipe, he is encouraging them to adopt the revolution. There is still a chance that they don't join and go after Tesla for the usage of most standard patents.

Apple fought and seems to be winning. But the adoption in that industry was not a question. Adoption of electric car industry is still a problem. Gutsy move Elon.

 

[DaveT]

My head's been spinning regarding today's patent announcement by Tesla. It's definitely an out-of-the-box decision by Elon and his team.

I'll be sharing some of my initial thoughts and hosting a discussion tonight (in about an hour) on a Google Hangout. Everyone's welcome to join. It will start soon at 8pm pacific time.
https://plus.google.com/events/c3e79dljnielsbuki6p454r9ca0?authkey=CNnCoq-SqvPywgE

 

[jhm]

Here's the link to the recorded conference call with Elon Musk from earlier today:
http://www.media-server.com/m/p/6vpa5qod

This is a must-listen for all shareholders.

Yes, this is very helpful. I appreciate the perspective that the pace or acceleration of innovation is a stronger position than relying on static patents. Tied to this is the issue of attracting and retaining top technical talent. So having the people who create the technology is much more important than protecting the patent. So one way to interpret this move is that Musk is expressing the utmost confidence in his organization to continue to advace and accelerate the technology. This is born of strength, not weakness.

 

[aznt1217]

Excellent Q&A. In my opinion one of the best. I think this own over A LOT of consumers. Good business does the business well in the long run. Elon is 100% correct, it's easier to work long hours for a cause than a corporation, now only if Tesla would call me back!

The company has always been about making a superior product in its own right, that spirit and culture won't leave Tesla and isn't captured on patents. More importantly not all patents have execution they are, for the most part, conceptual in nature. Executin and the nitty gritty might not be captured.

I thought about this a lot and I think it's a great move for Tesla. I also think it gives people a reason to continue to find Tesla, it's one of a few companies really trying to do the right thing.

More importantly, if you listen to the Q&A, I feel like Elon has this renewed sense of conviction I haven't heard or seen for a while which tells me something bigger is coming and this is part of some unannounced 5 part trilogy. I couldn't make the Google Hangout but would love a recap.

 

[jhm]

To expand on Musk's points about attracting talent, open source goes much deeper into academia. If you are a researcher or graduate student in the university. You want to find exciting topics to work on and you generally want open source tools you can work with, modify and publish. Some of this research may actually turn up results that Tesla can use or build upon. But more importantly Tesla may be able to acquire these researchers and graduates, and when they do so, they will have quite relevant experience with Tesla's tech before coming on board. This is a huge advatage. Even if these people go to other organizations they will carry Tesla ideas with them, and that will shape the tech developed in those places. So this is really longterm dissemination. So the question is who will be the next JB to come out of the universities, and how will open Tesla patents impact his or her formation?