If you type “who invented the light bulb” into Google, you get at the top of your search results a picture (unsurprisingly) of Thomas Edison and (more surprisingly) Joseph Swan and Hiram Maxim. While every American school child learns that Edison invented “the lightbulb,” it’s really more accurate to say that he invented one lightbulb among several. Electric power took off partly because several competitors furiously built out what you’d now probably call their light bulb networks.
The story of Edison comes naturally to mind after Elon Musk’s announcement that Tesla would let other companies use its patents without fear of lawsuits. Right now, Tesla has a big part of a very small market. If electric cars and charging stations take off, it could have a smaller share of a much, much bigger one.
That’s an attractive deal. But before you start thinking this is the end of patents, pay attention to three little words in Musk’s offer: “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” Here’s why “in good faith” matters:
One analogy to Tesla’s gambit is what Google has done with the Android operating system. Google has let anyone use Android in a product for free. That seems to have worked out very well: Android is effectively turning Google into the world’s most important creator of operating systems. That can turn out to be a privileged position.
But there’s one part of the deal that may not be working out super well for Google. Google doesn’t just let others use Android for free but has released the code base to the public and allowed it to be modified as well. Modified into new operating systems … which are incompatible with Google’s own. That’s what Amazon.com has done with FireOS, and Chinese handset makers like Xiaomi have done with their own operating systems. They’ve basically said, “Thanks a lot. Now go away.”
There’s no killer feature that these alternate operating systems offer to consumers that makes the so-called forks better than the original Android. Really, the killer feature that they have is something that a lot of users will probably think of as closer to a bug: The devices that use operating systems forked from Android are incompatible with Google’s vast app store, and drive users to the maker’s own apps. You won’t be using Google Books with the Amazon’s Kindle Fire tablets.
Would Tesla accept that kind of treatment? There’s no definition of what’s not “in good faith;” Musk says it’s a matter of “common sense.” It feels like trivial changes designed to make a carmaker’s product incompatible with Tesla’s would fall afoul of that “common sense” standard and make those little words come into force. Elon Musk would love a network of manufacturers who make cars that share charging stations with Tesla. He probably would not love a competitor making a small change that let their cars use Tesla’s stations, while blocking Tesla owners from theirs.
Let’s not assume that Elon Musk’s new deal is going to put the auto industry patent attorneys out of work. Musk wants competitors to use his intellectual property on his terms. As Amazon and Xiaomi have shown with Android, that’s not necessarily what competitors want. There’s going to be plenty of lawyering left to do before other companies take Elon Musk’s dare. How much blood has been spilled over the definition of “good” and “faith?” Three words in a blog post make for more than enough wind to power a flotilla of legal contracts.
Small update: Diving more deeply, these waters seem to feel more and more treacherous. Musk tells Bloomberg: “Somebody can’t go and use a whole bunch of our patents but then sue us for using one of theirs.” That doesn’t sound like giving your patents away. That sounds like a free cross-licensing agreement, revocable whenever it stops working for Tesla.