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:
“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.