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ELON MUSK JOINS THE SHARING ECONOMY WITH TESLA PATENTS

And Slaps George Selden’s Face In The Act.

via hybridcars.com

Elon Musk and Patent Diagram via hybridcars.com

In a rare case of reverse capitalism, visionary Elon Musk gave away the farm by open sourcing Tesla electric automobile patents.

He gave it away instead of using the patents to sue everyone who infringed on the technology.

Now auto makers the world around have access to the tricks of the electric vehicle trade.

Or, as some claim, he’s opened the patents up for greater licensing with other companies.

Either free, or licensed, the Tesla Patents look to jump start greater interest in the EV field.

The big question is why? Why did he take a chance on cutting into an income stream from an evolving market?

Because he’s a nice guy?

Or because this is a man who understands the relationship between butter and bread?

Let’s say he knows which side of the bread to butter. With wins in online payment as co-founder of PayPal, and wins in rocketry with SpaceX, the guy’s a winner.

What did he lose on the Tesla Patents?

Nothing. He just changed the game.

Tesla Motors isn’t competing with auto builders like Ford and Toyota. Tesla Motors is competing against gas fueled engines, the power plant.

By throwing his patents in the ring, Musk wants to build the market share of all electric vehicles. By heading this direction he goes against the grain of typical business practices.

After inventors create something new and improved they file for a patent to protect against infringers, those not smart enough to create, but smart enough to steal.

If you find a new use for patented material, you go through the legal steps before taking action. In other words you open your wallet and pay for the privilege of using patented goods.

Don’t do that and suffer the consequences in a lawsuit.

Making his patents available gives the bird to the man who once held the patent on all automobiles.

During a time long ago and far away, an upstate New York patent attorney named George Selden drew a picture of an early automobile. The picture was the basis for a patent he applied for, which ended up covering every car made in America powered by a gas engine.

via commercebasix.com

via commercebasix.com

While the Selden ride doesn’t compare to the Tesla models, they do have points in common.

The patent attorney drug out the patent process for nearly two decades, then sold the rights to the patent to an electric vehicle maker and received payment based on production.

In slippery lawyer fashion, or good business sense, Selden and the EV manufacturer decided to go after other auto makers in the new industry. They ran ads saying, “Don’t buy a lawsuit with your new car, buy a Selden Patented car.”

The money rolled in from royalties on the patent, but not everyone was happy.

Henry Ford applied for the Selden Patent. Ford was denied because he was considered an auto assembler, not an auto manufacturer. In the early days of cars the big companies made everything in house. Factory fires were common. Instead of shutting down to rebuild after a fire, Ford decided to order outside parts and build on an assembly line.

His fight with Selden turned nasty. From wiki: “It is perfectly safe to say that George Selden has never advanced the automobile industry in a single particular…and it would perhaps be further advanced than it is now if he had never been born.”

Electric vehicles competed with gas powered cars in the early 1900’s and lost. Selden’s patent either hindered innovation, or created a safer car. If it was a scam, it was a legal scam.

One small detail broke the patent’s grip.

The Selden car ran on a two stroke engine, the rest of the auto industry ran on four stroke engines.

Today Elon Musk did what Selden couldn’t do. He put his money where his mouth is and said:

“Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

Musk and Selden might be different sides of the same coin, but the Elon side shines brighter for his decision to share.

Well played, Mr. Musk. We expect to see more Portland baby boomers whisking by in their new Teslas.

Nowhere will you see any sign like this:

seldenplate1

via s363.com

 

 

 

About David Gillaspie
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