More visionary than rent seeker

As everyone knows by now, Elon Musk has given all his Tesla related patents to the world.  This has driven up the share price 9% so far.

I think this is a pretty clear indication of visionary rather than rent seeking behavior.  Quartz notes:

…a Financial Times report (paywall) …says major automakers Nissan and BMW are “keen on talks” with Tesla, to collaborate on charging networks and on “possible global vehicle-charging standards.”

The Washington Post thinks it’s a bad idea, but their examples are not very compelling.  They cite companies that gave away information and then many years later, after failure to continue innovating, were beaten by competition who were using some of the technology that the original company had developed.  They then add:

Musk is making a huge bet, but he isn’t crazy. If he were, then he’d free up the patents owned by SpaceX, too. Musk knows that the market for space launches is much more limited; he’s even sued the U.S. government because it insists on letting the same two aerospace companies put the Pentagon’s satellites into space. The space launch industry also doesn’t require a nationwide infrastructure (or mass public buy-in) to sustain it.

By contrast, the electric vehicle market needs both of those things.

OK, well, according to Business Insider, that’s just plain wrong:

Musk explains in a recent interview with Chris Anderson at Wired:

We have essentially no patents in SpaceX. Our primary long-term competition is in China,” said Musk in the interview. “If we published patents, it would be farcical, because the Chinese would just use them as a recipe book.”

To be fair, Space-X is not a Tesla-type open information company.  They do keep trade secrets.  But they are not using patents to try to protect their trade secrets.

I’m not saying Musk has given away his patents out of altruism, as a giant charitable act (although, I wonder if he can claim it that way on taxes?).  Patents are a rent seeking enterprise.  That’s why patent troll companies exist.  This is capitalism at work – he decided that it would generate more revenue for his company in the long run if he gives away the technology today.

Score one for visionary.

Ref:  Previous post here.

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1 Comment

Filed under Financial, Miscellaneous, Science

One response to “More visionary than rent seeker

  1. Elon Musk is the CEO of SpaceX and Tesla. In these two companies, products manufactured have never been proposed before. For SpaceX (USA), the company is able to sell a rocket launch for satellites for 12000 dollars / kg as cost for Ariane 5 (Europa) is 23000 dollars / kg and for Proton (Russia), 18000 dollars / kg.
    As ILIAD for French Telecommunication, SpaceX is completely redefine the market of space rocket launch. He obliges restructuring Safran (Ariane) into Airbus group in June 2014.
    Elon Musk is also the CEO of Telsa, a company selling only electric cars in USA! Elon Musk is a serial creator, as he was the creator of Paypal sold to Ebay in the 2000′s years.
    If you are interested, I have posted an article about Elon Musk that you can read here:
    http://worldofinnovations.net/2014/06/19/elon-musk-an-exceptional-innovator/

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