Friday, June 13, 2014

On Tesla's patent giveaway

In an article Elon Musk’s huge patent bet could doom Tesla, even if it’s great for the rest of us ,
Brisn Fung brings up the story of Bell Labs and the transistor to understand what Tesla might be doing in opening up its electric car patents:

AT&T's main interest in the transistor was to reduce the costs of carrying phone calls, but its executives intuitively grasped how the technology could upend other industries, too. They didn't see why a phone company should keep the blueprints of such a revolutionary technology to itself. So AT&T said, to all comers, Pay us a one-time fee of $25,000, and you can use the transistor however you want. In the 1950s, this was an incredible deal. Eventually, AT&T would cut even that fee to zero as part of a deal with federal antitrust officials to keep control of its long-distance telephone operations.

As to "intuitively grasped," one recalls the presentation made by Bell Labs managers in New York City on June 30, 1948, which included the transistor used in a radio, a television, and a telephone handset. That explicit demonstration qualifies as a bit more than intuitive grasp. On July 1, 1948, the New York Times covered this demonstration in "News of the Radio." See footnote 29 of What the story of the invention of the transistor teaches us about 21st century patent practice

To explain Tesla's generosity as to patents, Fung observes:

Electric vehicles are distinct from other technologies in that they require a special network of electric charging stations all across the country. Unless a driver in California can be sure there'll be enough juice to get him to New Jersey, electric cars will never become a viable alternative to gasoline vehicles.

Tesla needs electric cars to become widely adopted if the company is to succeed. It'd be even better if all electric vehicles used the same batteries, the same plugs, the same everything. If some competitor designed a different system in Florida that was incompatible, you'd wind up with a patchwork of electric vehicle infrastructure, and that doesn't serve the national goal of cutting carbon emissions.

As noted elsewhere on IPBiz, at one time in the United States, there were more electric cars than gasoline cars.
There was no network of charging stations at that time.

As to Tesla, it depends on where the money is to be made. Kodak could practically give away cameras, as long as there was lots of money in selling film. And the tricks in making film could be protected by trade secrets.


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