Nobody is likely to argue with the claim that innovation is at the root of human prosperity. So it is hardly surprising that technological innovation is the main response of society as we grapple with the consequences of past innovations – such as climate change. In recent times business has increasingly sought to protect their investments in innovation with intellectual property (IP) law. Patents across all industries are being issued at unprecedented rates and it is notable that green technologies easily outstrip other sectors. A recent report indicates that the number of green-tech patents issued worldwide increased by 27% per annum between 2006 and 2011.
Yet last week this trend was disturbed by an announcement that was greeted with universal applause. Electric car pioneer Tesla declared that it would share its patents with its competitors. Well that’s not exactly what Tesla CEO and super-innovator Elon Musk said. But he did announce that Tesla would not be suing where its innovations were used in “good faith”. The guy whose goal is to bring about a new era in personal transportation has realized that “if we clear a path to the creation of compelling electric vehicles, but then lay IP and mines behind us to inhibit others, we are acting in a manner contrary to that goal”.
So while IP experts consider this to be a landmark announcement opinion is divided as to whether this was an act of altruism or a great marketing ploy. The devil (as always) will be in the detail and it is uncertain exactly what “good faith” means but IP researcher Andrew Rimmer considers it likely that competitors will be encouraged to license Tesla’s technology.
But the effect of the “patent gift” is especially uncertain because traditionally legacy industries like the auto industry have been horribly slow to change. Obviously Tesla’s latest disruptive act hopes to spur the development of an “ecosystem of innovation” and benefit from the “network effects” of other auto-industry players rushing into the e-car market and spurring a cascade of innovation. Sharing patents is also a way of Tesla ensuring that its technology becomes the industry standard and its brand the icon of the industry growing around it.
BMW’s recent collaboration with Tesla is a sign of growing interest in e-cars. As the industry expands e-cars will need to be increasingly subjected to rigorous life cycle assessment in order to see if the electronic mobility thing is at all “sustainable”. The case is complex (see here and here) and contested.
So while the idea of open-source makes much sense, initiatives to combat climate change that had gone down the open-source path in recent times have yielded underwhelming results. (I am reminded here of the apocryphal economist who when told of the dramatic observed effect of a new policy initiative replied “yes, well it might work quite well in practice but I am rather more concerned about whether it works in theory”.) Recent initiatives such as the patent sharing network between IBM, Sony and Nokia which planned to donate intellectual property that was beneficial to the environment and the collaboration between the UNFCCC and WIPO (World Intellectual Property Organization) to share patents have not been terribly successful. And it comes as little surprise that those that have sought to fortify access to their knowledge through legislative frameworks in order to monopolize the revenue flows from their idea are reticent to divide up the spoils.
But Tesla’s Elon Musk is an ambitious man who is not content simply selling 35,000 cars a year. Such a venture is not of sufficient scale to generate the economies required to drive its price down towards general affordability. As yet, Tesla hasn’t captured enough of the market for Musk to feel confident about a paradigm shift disturbing personal transport any time soon. He might be a radical disrupter, but he is hardly Henry Ford (yet).
Article image by Dave Lisle: Mullumbimby Main Street.
