Tesla will open up all its patents, free to use with only one condition: ” Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” I would argue that this is a first shot in a technological war – litigation by other means – and not a nice act of altruism by Tesla. This opens up an exciting chapter in technological innovation.
The companies that use Tesla its patents are not allowed to?sue Tesla when it uses their patents.
However, the car makers who use Tesla’s patents could still sue each other. As Tesla is the technology leader and has a “wall of patents” on electric car making, low-cost carmakers wanting to go electric can adapt Tesla technology at low-cost in R&D.
However, Tesla does not compete with low-cost?carmakers. Tesla is market leader in the technologically fast-moving sector of high-tech luxury cars with a clear brand recognition. By pooling patents with other innovative technology driven brand car makers (such as BMW) the speed of innovation is?stepped up. By pooling R&D and division of labour, the cost of innovation goes down. So when the cars come to the market, the innovation is for the market leaders already yesterdays’ news. Tesla is confident they have technology the others will want to adapt as a standard, so they are the king of the hill. A market is created where the technology leaders pooling with Tesla compete on the knife’s edge, pre-patent, while the?car makers who don’t contribute much R&D compete on price, driving prices of cars down and acceptance of the electric car up in large segments of the market.
What with the car makers who don’t pool their patents with Tesla? Being part of a smaller ecosystem, their relative R&D costs will rise. They might even choose to stay carbon based. They still could licence Tesla technology though. In the fast developing market for innovative technology driven luxury brand cars, the Tesla effort is a declaration of war to other luxury brands: innovate fast on electric cars, or be a has been. For car makers aiming for mass production cars, they get access to a goldmine of innovation, on condition they accept to live in the Tesla world. A world where Tesla is not only a car maker, but also the market leader in standards for charging, battery replacement technology, etc. Just like Google is the search company giving away Android for free, Tesla is the car company entering the market of service standards. It is like Bill Gates said: open source is like a virus, making all IP open source it touches.
The citizens and cities craving for better air quality can only be happy about this.