Login  /  Register  | 3 premium articles left before you must register.

Tesla goes 'open source' with patents

By SUSAN DECKER, ALAN OHNSMAN and MARK CLOTHIER Bloomberg News

Publication: The Day

Published June 14. 2014 4:00AM
Simon Dawson/Bloomberg News
Tesla CEO Elon Musk pledges that the company's auto inventions will be free for anyone to use "in good faith," citing the prolonged Apple-Samsung patent fights as damaging to their industry, referring to them as legal battles that electric car makers should avoid.

Washington - Elon Musk wants to apply the contrarian style that made him millions of dollars from PayPal and billions from rocket ships and electric cars, and revolutionize the litigious world of patents.

Tesla Motors became a rarity among automakers when Musk Thursday pledged that inventions on his electric cars and batteries will be free for anyone to use "in good faith." The move may speed the adoption of technology that Musk needs to make his fledging line of cars more than a luxury niche.

Patents are a trade-off that give companies the right to block others from using a specific technology in exchange for making the idea public so others can analyze and build on it. The alternatives are to keep the technology a trade secret or, as in the case of the Linux computing system, make the information available to everyone. Tesla is adopting a third way - continue to patent, but let the public use it at will.

"The more people that use the technology, the more valuable the market," said Zorina Khan, an economics professor at Bowdoin College in Brunswick, Maine, and author of "The Democratization of Invention."

The move shows Musk positioning Palo Alto, California-based Tesla for a more open relationship with the global auto industry than the one-off projects it's had with investors Toyota and Daimler to supply battery packs and motors. He met this week with executives from Bayerische Motoren Werke and said he recommended that BMW collaborate by using Tesla's rapid- charge system and even build its own battery factory.

Tesla has more than 160 issued U.S. patents for things like a system to protect battery packs from overcharging and an improved rotor construction in an electric motor, according to the website of the U.S. Patent and Trademark Office.

While Musk's strategy is not unique to the technology industry - IBM employed it nine years ago - it's an unusual move for automakers. Car companies "traditionally lock their intellectual property in a vault and steal everyone else's," said Erik Gordon, a professor at the Ross School of Business at the University of Michigan.

The other automakers, which have so far treated Tesla as an outsider, may actually be receptive to Musk's plan, according to Gordon.

Taking an "open source" approach can lead to others adding to the technology and cross-licensing, as well as "greater goodwill" and benefits "from the specialized skills of a competitor," Khan said.

Linus Torvalds, who created the Linux computer operating system, made it available for free to anyone. That's led to its growth, including its role in the creation of Google Inc.'s Android operating system. Google in turn made Android free and found a way to make money from it through mobile advertising. Android is now the world's most popular operating system for mobile devices.

Tesla is reserving the right to go after infringers in limited circumstances. Musk said his company would use "common sense" in deciding whether to assert its patents - such as a carmaker that uses the inventions to confuse consumers into thinking the car is a Tesla. It also could strike back should Tesla ever be accused of using another company's technology.

"Somebody can't go and use a whole bunch of our patents but then sue us for using one of theirs," Musk said "That seems like it wouldn't be a very nice thing to do."

The 42-year-old billionaire cited the patent battles between Apple and Samsung Electronics over smartphones and tablet computers as something the car industry should avoid.

"Who's really benefiting there?" he said. "You've got all these depositions and dirty laundry getting aired and it's a big distraction for the management team."

News by Town

Most Recent Poll
Are you going to follow the World Cup?
Nope. Not interested at all.
80%
I'm going to watch every U.S. game, even if they don't have much of a chance to advance very far.
6%
I'm going to follow every game on T.V., online, or via my handy FIFA app.
7%
I'm only going to watch the top teams play.
6%
I don't know anything about soccer, but I'm going to watch every World Cup game at the local pub.
1%
Number of votes: 1576

No current items found