Elon Musk Clarifies That Tesla's Patents Really Are Free; Investor Absolutely Freaks Out

from the silly-investors dept

We've written a few times about Elon Musk and Tesla's decision to open up all of Tesla's patents, with a promise not to sue anyone for using them. We also found it funny when some reacted to it by complaining that it wasn't done for "altruistic" reasons, but to help Tesla, because of course: that's the whole point. Musk recognized that patents frequently hold back and limit innovation, especially around core infrastructure. Since then, Musk has said that, in fact, rivals are making use of his patents, even as GM insists it's not.

However, as some may recall, when Musk made the original announcement, the terms of freeing up the patents were at least a little vague. It said that Tesla "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." That "in good faith" claim had a few scratching their heads, and pointing out that still gave Tesla an out. We were a little disappointed that the company didn't make the terms entirely clear, believing that the "in good faith" line would likely scare away some companies from actually using the patents. However, recently, at the Detroit Auto Show, when questioned about this, Musk clarified that he really meant to make them completely free for anyone to use, no questions asked, no licensing discussions needed:
Around the three-minute mark someone asks how many automakers have taken Tesla up on the offer to use its patents, and Musk notes:
Musk: We actually don't require any formal discussions. So they can just go ahead and use them.

Reporter: Is there a licensing process?

Musk: No. You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them.
In other words, Musk is saying what most of us assumed all along was the point. Hoarding the patents and blocking others doesn't help him at all. Letting others expand the market does. And licensing discussions are unnecessary friction and a waste of time.

All good, right?

Well, no. It appears that clueless Wall Street types are absolutely flipping out over this (possible registration wall). Some outfit called "Technology Equity Strategies," which doesn't seem to understand the first thing about how innovation actually works, posted an insanely long and ridiculously misguided note on how this is horrifying for anyone invested in Tesla. The descriptions are hilarious, where you can almost hear these Wall Street types pulling out their hair over this idea of *gasp* actually letting others use Tesla's patents. First, it notes that Musk called them "open source" patents, and spends way too much time detailing the "official" definition of open source, and then says that the patents are now "public domain" (apparently not recognizing that public domain and open source are not the same thing -- though in this case it might not matter). Technology Equity Strategies is very upset about this.
The restrictions in the June 12 blog of "good faith" and "we will not initiate" are over with. They are finished. These patents are either in the public domain, or they have at minimum been rendered unenforceable against all users, "good faith" or not.
Why? Because in their non-innovation minds, all they care about is how do you best value the stock, and giving up patents is giving up an asset. The note first (mistakenly) argues that many areas of the tech industry rely on patents as barriers to entry and that's where their advantage comes in (rather than execution, which is the truth). And so, it thinks now some other company will just come in and eat Tesla's lunch:
Is it possible that the massive capital and labor needed to attain leadership might not be eroded in by imitators in Asia, by large companies with resources to buy market share, by companies whose strengths are manufacturing process, global footprint and scale?

If so, the embedded option on a leader in a new niche in the auto industry and on a shift in the competitive dynamics in the auto industry might indeed be a valuable option.

But Mr. Musk was not interested in that. He is happy to give away the advantages that actually provide great profitability in some sectors of technology. He wants to compete as an auto company, in the brutal and capital intensive way that auto companies compete. More fundamentally, he is willing to eliminate the possibility in the future of competing as a technology company, which depend on the IP protections of patents, copyright, and trade secrets.
Of course, the reality is that Musk recognizes what many in this sector recognize: that sharing the ideas helps speed along innovation, creating greater and greater opportunities, which you can realize by executing well. Musk is confident in Tesla's ability to execute and (as we noted earlier) recognizes that sharing the patents actually helps Tesla by getting more electric vehicles on the market, meaning more overall infrastructure that makes Tesla cars more valuable.

This is the ridiculousness of Wall Street: sometimes it simply can't understand the nature of a non-zero sum game. Giving up any "advantage" is seen as helping others, without recognizing that helping others can also help you out tremendously. Instead, these investor types believe in the myth of intellectual property, that it's patents that make a company valuable:
Intellectual property is an important foundation for valuation technology companies. Funds that own Tesla may not be the same institutions who own GM or Ford, but many will be familiar with Qualcomm and ARM.

IP goes a long way in explaining why Qualcomm has a market cap of $110 billion, and ARM has a valuation of 23 billion (18x trailing revenues) while Nokia and Dell were sold for less than two times revenues. Nokia and Dell did fine work for a while as manufacturers and product companies. There was a time when they too looked like winners based on product execution. But they didn't own core IP, and so when product cycles shifted, they were left with little value.
Yes, ARM and Qualcomm are both patent-focused companies (that dip their toes into trolling all too often). And, yes, companies that don't execute well can lose out in the end, but cherry picking a few companies that have flopped on execution, while pointing to a few trollish companies as success stories, doesn't make a very strong argument. It's basically saying "yes, invest in the companies that don't believe in their own ability to execute, who have a fallback as a patent troll." That's not exactly a strong endorsement. Tesla believes in its own ability to innovate -- and these Wall Street guys think that's a bad thing.

And then there's the rewriting of history:
Let's look at Apple. Apple and Steve Jobs learned the hard way. Some of us will recall that an early Apple (believing that IP wasn't important) opened up its IP to the basic Mac interface with a royalty free license to Microsoft.

This resulted in Microsoft Windows taking nearly the entire PC market from Apple, and nearly bankrupting Apple. In his second chance, Steve Jobs learned about the importance of IP. This is a lesson that Mr. Musk failed to absorb.
Except, that's totally incorrect. While Apple had licensed a few aspects of its UI, that licensing agreement became meaningless by the time of Windows 2.0. Then Apple sued Microsoft and lost, because it was trying to use copyright law to claim things that could not be covered by copyright law. And that's not why the PC took over the market. So this isn't a lesson that Musk failed to absorb, because it never happened.
The Grand Gesture shows the worrisome sincerity in Musk's repeated statements that he is primarily on a mission to get other companies to sell a lot of electric vehicles, not to make money.
A worrisome sincerity? No, it's showing that Musk recognizes that if the market for electric vehicles does not grow massively, then he won't make money. He very much wants to make money, and a good way to do that is to build out the overall market for EVs, allowing Tesla to thrive. And these Wall Street folks first mock the idea that Musk might first invest to grow the market, by then... claiming that Asian makers might do the same thing:
No doubt Mr. Musk believes that if the industry embraces EVs, then Tesla will succeed as part of it. But is this plausible, that everything will just work out for the best. Is it plausible that Musk can succeed as a manufacturer in the U.S. competing against manufacturers in Asia who may take zero margins to grow a business, using Musk's proven designs? U.S. companies have learned over and over that IP is necessary to get a sustained profitable return on their innovations.
Actually, no. Plenty of tech companies don't think that IP is "necessary" to get sustained returns -- they think the opposite. Patents get in the way of profitability. They require lots of lawyer time and threats of lawsuits.

Frankly, Tesla opening up its patents seems like a move that shows how confident it is in its execution abilities, and makes the company a lot less likely to rest on its laurels and become nothing but a "licensing" company down the road. The fact that people who don't understand what a mess patents are and how they slow down innovation are now jumping in making ridiculous claims like Tesla's decision is why Apple can now jump into the EV car market just shows how little some people understand patents. The "myth" of patents as a powerful tool of innovation is still out there, and that's a shame.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • icon
    Ninja (profile), 18 Feb 2015 @ 7:23am

    I bet this guy was in the rounds saying how awesome it was to invest in Kodak, Nokia and RIM back then because they didn't rush into the failing smartphone fad...

    It's Wall Street with their myopic short term profits that are hindering a lot of innovation.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 8:26am

      Re:

      But remember... there are a lot of asses in the air for these short term profiteers.

      The idea of a quick buck is an anathema to any stable economy, yet we keep kicking, punching, and stomping our economy while the critters in power keep proposing ways to not solve it.

      If they did actually try to solve the real problem then you would see a massive change of the collective congressional diaper.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 9:13am

      Re:

      Wall street makes it money on the margins it get from stock sales, regardless of whether the price is rising or falling. This results in them using news to drive sales of stock, and hyping any news to drive the sales.

      reply to this | link to this | view in chronology ]

  • icon
    BentFranklin (profile), 18 Feb 2015 @ 7:55am

    If you disagree with Elon, sells your shares. If you agree, buy them. Either way, just shut up and let your money talk.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 8:29am

      Re:

      is it ok if investers just sue for not protecting the value?

      reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 18 Feb 2015 @ 8:36am

        Re: Re:

        You are assuming that Tesla is not protecting the value. I would argue they're doing the opposite: they are protecting the actual value of the company, which is in the best interest of investors. Playing the patent game to increase short term profits at the expense of the long term is not "protecting the value".

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Feb 2015 @ 10:37am

          Re: Re: Re:

          Although possibly true, I have a feeling you would loose in court.

          reply to this | link to this | view in chronology ]

        • icon
          Richard (profile), 12 Nov 2016 @ 4:14am

          Re: Re: Re:

          Just to clarify.
          Tesla make electric cars.
          The future development of electric cars critically depends on available infrastructure.

          The more companies make good electric cars the more infrastructure there will be.

          Elon Musk has rightly calculated that 5% of a 100 Billion dollar market is way better than 100% of a 1 billion dollar market.

          reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 18 Feb 2015 @ 10:19am

        Re: Re:

        The idea that investors can sue companies for not doing what they want them to do with the company yet voters can't really sue politicians for violating the public trust and making terrible decisions with the country is really fucked up. If you put money up, you can sue because money bears that right. But if you elect someone who fucks up your life, rights, and the economy that determines whether you have a job or enough food to feed your family, you have no recourse except to wait a few years and elect a different person to do the same thing.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Feb 2015 @ 10:27am

          Re: Re: Re:

          That's a little tangential

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 18 Feb 2015 @ 7:12pm

            Re: Re: Re: Re:

            Not really. I'm basically saying that the investors should stop bitching because it's only money and they should have known that no company is a sure bet to invest in. It's not like they're losing their rights. You can only lose what you put in. Get over it.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 22 Feb 2015 @ 11:29am

              Re: Re: Re: Re: Re:

              Not to mention that you can change your investment in microseconds. You can't change your vote after it is cast. Although such a system would be interesting to examine as a theoretical exercise. Where politicians jump in and out of office because people shifting their vote.

              reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Feb 2015 @ 2:29pm

          Re: Re: Re:

          ...The idea that investors can sue companies for not doing what they want them to...

          This is where judges should grow some guts and put such lawsuits in the trash. EVERY PROSPECTUS I've read included the phrase "you can lose money". ANY investor that doesn't understand that deserves to lose, both money and lawsuit.

          reply to this | link to this | view in chronology ]

      • icon
        BentFranklin (profile), 18 Feb 2015 @ 10:22am

        Re: Re:

        Naturally, they are free to sue or take over the board of they can.

        reply to this | link to this | view in chronology ]

    • icon
      Mason Wheeler (profile), 18 Feb 2015 @ 8:42am

      Re:

      Indeed. If this guy manages to push Tesla's share price down... there's a term for the opportunity that that creates. "Buy the dips."

      reply to this | link to this | view in chronology ]

  • identicon
    sevvvvvvven, 18 Feb 2015 @ 8:22am

    I see one side interested in the benefit of all humanity and another side interested in the benefit of their profit from humanity.

    Gee, I wonder which one looks better?

    Though I do agree making money (and a profit) is important in a business venture, I also agree that bettering humanity is a far noble chief goal than making as much monetary value as possible.

    Good on you, Mr. Musk.

    reply to this | link to this | view in chronology ]

    • icon
      jupiterkansas (profile), 18 Feb 2015 @ 8:37am

      Re:

      Except as Techdirt points out, this isn't done to better humanity, but to make the product that Musk hopes to profit from more commonplace. It's done in the hopes of increasing profit. The competition isn't among various electric car makers, but between electric cars and the overwhelming dominance of gasoline cars. He's chosen to encourage the market rather than face it alone.

      reply to this | link to this | view in chronology ]

      • identicon
        Pseudonym, 18 Feb 2015 @ 2:44pm

        Re: Re:

        Precisely.

        Musk knows that the worst possible thing that could happen to Tesla is that its platform becomes one of many incompatible platforms.

        What Musk wants is for Telsa's platform to be the world standard. He's betting that opening up the patents means that other people and companies will work towards that goal, and he won't have to pay them a cent.

        This is, in a deep sense, very similar to Facebook's business model, or many open source business models: get other people to make your system valuable for you for free.

        reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    icon
    antidirt (profile), 18 Feb 2015 @ 8:33am

    However, as some may recall, when Musk made the original announcement, the terms of freeing up the patents were at least a little vague. It said that Tesla "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." That "in good faith" claim had a few scratching their heads, and pointing out that still gave Tesla an out. We were a little disappointed that the company didn't make the terms entirely clear, believing that the "in good faith" line would likely scare away some companies from actually using the patents. However, recently, at the Detroit Auto Show, when questioned about this, Musk clarified that he really meant to make them completely free for anyone to use, no questions asked, no licensing discussions needed[.] ***

    In other words, Musk is saying what most of us assumed all along was the point. Hoarding the patents and blocking others doesn't help him at all. Letting others expand the market does. And licensing discussions are unnecessary friction and a waste of time.


    If Musk really wanted to abandon his patents, he would do so explicitly. Clearly he does not. He wants the patents, and he still has them. I don’t see how saying that discussions aren’t necessary changes anything. As you noted, Musk hedged with the “in good faith” clause. Musk said that Tesla “will not initiate patent lawsuits” against anyone who uses the patents “in good faith.” He didn’t say that he won’t countersue. He said he won’t sue. This is just cross-licensing: If someone uses Tesla’s patents, then that someone can’t sue Tesla if it uses their patents.

    This is an open source license, with a condition: If you use my patents, I can use your patents. The arrangement does not sound in contract law. It’s not a contract. It’s a unilateral grant sounding in property law. Unilateral grants don’t require “licensing discussions.” If I attach a Creative Commons license to my work, you can engage in the licensed uses even if we don’t have any discussions. This is why open-source licenses work. They’re not contracts.

    Frankly, Tesla opening up its patents seems like a move that shows how confident it is in its execution abilities, and makes the company a lot less likely to rest on its laurels and become nothing but a "licensing" company down the road. The fact that people who don't understand what a mess patents are and how they slow down innovation are now jumping in making ridiculous claims like Tesla's decision is why Apple can now jump into the EV car market just shows how little some people understand patents. The "myth" of patents as a powerful tool of innovation is still out there, and that's a shame.

    I think the fact that you can’t admit that patents do spur innovation in some ways, while impeding innovation in other ways, is a “shame” on your part. I think being so black-and-white really hurts your cause. It demonstrates that you’re not a reasonable person. My two cents.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 8:49am

      Re:

      Except your completely wrong antidirt. And while I recognize I am only feeding the trolls by responding, your idiocy compels me to. Your statement that "this is an open source license, with a condition: If you use my patents, I can use your patents" is absolutely false. The statement made by Musk and Tesla was that they would"not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." No where in that statement is their a requirement of reciprocity or cross-licensing. Musk's further statements clarifying also lack any requirement of cross-licensing. So this is not an open source license with a condition, its a promise not to sue, which can be relied on and would most likely be enforced by the courts if Tesla attempted to sue on its patents. Therefore, it equates to an open, unrestricted license for the patents to anyone who wishes to make use of them.

      Your inane attempts to throw in legal sounding terms such as "sound in contract law" simply demonstrates that you do not have a firm grasp on the legal concepts behind those statements. Open source licenses, are, in fact contracts. They are the equivalent of an EULA (e.g., a contract) which you accept by use of the software. There are restrictions in many open source licenses, and those restrictions are only enforceable BECAUSE they are valid, enforceable contracts.

      Next time, try looking at the actual facts before formulating some half-cocked argument that would see you guilty of malpractice if presented in a court.

      reply to this | link to this | view in chronology ]

      • icon
        lucidrenegade (profile), 18 Feb 2015 @ 9:11am

        Re: Re:

        Except your completely wrong antidirt.

        Yeah, that's nothing new.

        reply to this | link to this | view in chronology ]

      • icon
        antidirt (profile), 18 Feb 2015 @ 9:20am

        Re: Re:

        Except your completely wrong antidirt.

        Delicious irony.

        And while I recognize I am only feeding the trolls by responding, your idiocy compels me to.

        I know this is Techdirt, and you’re just following Mike’s lead as far as personally attacking everyone you disagree with, but your argument would be better received if you politely disagreed. Try it sometime!

        Your statement that "this is an open source license, with a condition: If you use my patents, I can use your patents" is absolutely false. The statement made by Musk and Tesla was that they would"not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." No where in that statement is their a requirement of reciprocity or cross-licensing.

        There were later interviews/articles that suggested “in good faith” meant a cross-licensing scheme, which makes sense. Such cross-licensing schemes are commonplace. Tesla isn’t breaking any new ground. It also came out that Musk intends to obtain more patents. He wants to license, not abandon. He wants open source, not public domain. Of course, he’s still sitting on his trade secrets, that is, inventions that are not disclosed publicly.

        Musk's further statements clarifying also lack any requirement of cross-licensing. So this is not an open source license with a condition, its a promise not to sue, which can be relied on and would most likely be enforced by the courts if Tesla attempted to sue on its patents. Therefore, it equates to an open, unrestricted license for the patents to anyone who wishes to make use of them.

        Where did he promise not to sue without condition?

        Your inane attempts to throw in legal sounding terms such as "sound in contract law" simply demonstrates that you do not have a firm grasp on the legal concepts behind those statements. Open source licenses, are, in fact contracts. They are the equivalent of an EULA (e.g., a contract) which you accept by use of the software. There are restrictions in many open source licenses, and those restrictions are only enforceable BECAUSE they are valid, enforceable contracts.

        An open source license is not a contract. If it’s a contract, where’s the consideration?

        Next time, try looking at the actual facts before formulating some half-cocked argument that would see you guilty of malpractice if presented in a court.

        Next time just politely disagree and explain yourself. I’m happy to back up what I say. I’m happy to have a polite discussion. No need to be abusive. I know Techdirt brings out the worst in people, myself included at times, but let’s rise above it and have a nice chat. Deal?

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Feb 2015 @ 9:40am

          Re: Re: Re:

          ...but your argument would be better received if you politely disagreed.

          Delicious irony, indeed.

          You first AJ.

          reply to this | link to this | view in chronology ]

        • icon
          Ninja (profile), 18 Feb 2015 @ 9:46am

          Re: Re: Re:

          lmao maybe you are right and he could have been polite but I know it is you just attacking the strawman Mike in your head AND everyone that doesn't buy into your delusions but your arguments would be well received if you actually based them on facts and gave proper reasoning. Try it sometime!

          That said, nobody said he is abandoning the patents, not even the man himself. He will retain them and it's wise to have patents these days as defensive measures against trolls. Which reinforces the notion that patents are actually a dead weight that must be carried just in case.

          Tesla isn’t breaking any new ground.

          You seem to forget the VHS technology from JVC. They decided not to litigate or charge licenses. Guess who went on to make a lot of money and become the standard? Hit: not the makers of Betamax. As for the cross-license nonsense, READ THE GODDAMN ARTICLE. I'll help you with this one (quote from the article):

          Reporter: Is there a licensing process?

          Musk: No. You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them.


          Where did he promise not to sue without condition?

          He stated publicly that Tesla is not suing and there's no license needed. This can be used if Tesla tries to sue. Of course this was also noted in the article. Apparently you can't comprehend what you read.

          An open source license is not a contract. If it’s a contract, where’s the consideration?

          Yes it is. You accept the terms when you use and/or modify it. The terms are quite loose and provide a lot of freedom depending on which open source model they are using (there are quite a few).

          Next time just politely disagree and explain yourself. I’m happy to back up what I say.

          Ah the irony. We are waiting the day you'll actually provide explanations that aren't the product of your brain farts.

          I know Techdirt brings out the worst in people, myself included at times, but let’s rise above it and have a nice chat. Deal?

          You first. Lead by example.

          reply to this | link to this | view in chronology ]

          • icon
            JP Jones (profile), 18 Feb 2015 @ 11:54am

            Re: Re: Re: Re:

            That said, nobody said he is abandoning the patents, not even the man himself. He will retain them and it's wise to have patents these days as defensive measures against trolls. Which reinforces the notion that patents are actually a dead weight that must be carried just in case.

            This really needs to be quoted again. Obviously an innovative company like Tesla would be a ripe target for patent trolls. If they didn't patent anything, some random troll would apply for the patents and then they'd spend all their time in court rather than designing cars.

            The "in good faith" was much more likely referring to this; patent trolls are not welcome to use their patents to sue people, but car companies and other innovators are free to utilize them to actually make stuff.

            Elon Musk is a long-term thinker. He invested practically his entire fortune after Paypal into SpaceX, a company many at the time considered a fool's errand. Now SpaceX is being paid by the U.S. government to bring supplies to the ISS and made enough money for him to create Tesla Motors. He is also a heavy investor and was the initial designer of SolarCity, a solar power and EV charging station company.

            He's taking on the entire energy industry, and is looking for long-term gains. Our financial system has broken itself because it encourages short-term profit hunting via stock value rather than investing in a company's future.

            This is one of the main reasons why the world economy collapsed in 2008. Prior to the bailout, GM made more money from their financial institution and investments than they did from making cars. If you can't see why a car company that's focused on financial investments instead of car creation is a problem, well, you're part of the problem.

            So of course Wall Street is freaking out. They have no idea how real-world economics works. Most of the traders are still living in their imaginary world where short-term gains in "profit" is more important than long-term company stability and production. It should be no surprise to anyone when you focus entirely on profit margin at the cost of infrastructure that at some point the infrastructure is going to collapse.

            We need more innovators that are looking towards long-term gains rather than short-term cash grabs.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 18 Feb 2015 @ 12:44pm

              Re: Re: Re: Re: Re:

              I personally would rather see him start or join a group to defend all members and openly fight against the patent trolls. IE: http://www.lotnet.com/

              It might not be the best solution, but this way it's sort of like an open-source license that is perpetuated by it's use.

              reply to this | link to this | view in chronology ]

            • icon
              trollificus (profile), 10 Apr 2016 @ 1:14am

              Re: Re: Re: Re: Re:

              "Our financial system has broken itself because it encourages short-term profit hunting via stock value rather than investing in a company's future."

              Exactly. Somehow, our business schools have produced "managers" whose idea of leadership is:

              1) Bump the stock price by any means necessary
              2) Cash out
              3) Bail
              Repeat at one's next stop on the carousel. And this despite their being "well-compensated", to desribe it euphemistically.

              Whatever the effect on the nations economic well-being, I can't forgive them for making me explain to my millenial children that "No, this is not actually what 'capitalism' is." Grrrr...

              reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 18 Feb 2015 @ 9:47am

          You just can't make this stuff up...

          I know this is Techdirt, and you’re just following Mike’s lead as far as personally attacking everyone you disagree with, but your argument would be better received if you politely disagreed. Try it sometime!

          Immediately after a personal attack, and a hilarious one given how often you yourself insult those that disagree with you, you chide someone for not being 'polite' enough.

          As you yourself noted above, 'Delicious irony.'

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Feb 2015 @ 9:56am

          Re: Re: Re:

          "I’m happy to back up what I say."

          Hilarious

          reply to this | link to this | view in chronology ]

          • This comment has been flagged by the community. Click here to show it
            identicon
            Anonymous Coward, 18 Feb 2015 @ 10:23am

            Re: Re: Re: Re:

            Anti-dirt backs up what he says every time. Masnick runs away. You defend Masnick no matter what silliness he espouses. Pretty obvious what that says about you.

            reply to this | link to this | view in chronology ]

        • icon
          OvertlyGrey (profile), 18 Feb 2015 @ 9:59am

          Re: Re: Re:

          Your point is taken regarding the tone of my prior post, and I apologize for the aggressive tone. Now, on with the polite discussion.

          "There were later interviews/articles that suggested “in good faith” meant a cross-licensing scheme, which makes sense. Such cross-licensing schemes are commonplace. Tesla isn’t breaking any new ground. It also came out that Musk intends to obtain more patents. He wants to license, not abandon. He wants open source, not public domain. Of course, he’s still sitting on his trade secrets, that is, inventions that are not disclosed publicly."

          I have been unable to identify any of these "further interviews/articles." Can you provide any citations to these articles where there was a clarification of the "good faith" statement by Musk or Tesla? I know that several outlets were conjecturing as to what "good faith" meant, but as far as I know, and as far as my google search revealed, Tesla itself never clarified what it meant (at least until Musk's recent comments cited in this article that it meant the patents were completely free). Furthermore, while you are correct that cross-licensing schemes are common-place and good for companies, there is no evidence that a cross-licensing scheme was what Tesla was proposing or requesting. Given that the only statements by Tesla/Musk have indicated no reciprocity requirement, Tesla is not requiring cross-licensing.

          Where did he promise not to sue without condition?

          Although there was never an explicit statement of "we promise not to sue without condition," that wasn't my argument. My argument is that the combination of Tesla's early statement "we will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology" and Musk's recent statement "We actually don't require any formal discussions. So they can just go ahead and use them...You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them" creates an implied license to anyone who takes advantage of it, and that license would probably be enough for a court to prevent a suit for patent infringement by Tesla. You cannot give someone permission for an action and then turn around and sue them when they take that specific action.

          An open source license is not a contract. If it’s a contract, where’s the consideration?

          The consideration is the use of the software. You gain the benefit of the software by agreeing to the terms of the open source license. But don't take my word for it, here's a case by the Court of Appeals for the Federal Circuit that accepts and addresses an open source license as a contract: http://www.cafc.uscourts.gov/images/stories/opinions-orders/08-1001.pdf

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 18 Feb 2015 @ 10:00am

            Re: Re: Re: Re:

            wait, these words have meaning other than what I make up in my head?

            reply to this | link to this | view in chronology ]

          • icon
            antidirt (profile), 18 Feb 2015 @ 10:44am

            Re: Re: Re: Re:

            I have been unable to identify any of these "further interviews/articles." Can you provide any citations to these articles where there was a clarification of the "good faith" statement by Musk or Tesla? I know that several outlets were conjecturing as to what "good faith" meant, but as far as I know, and as far as my google search revealed, Tesla itself never clarified what it meant (at least until Musk's recent comments cited in this article that it meant the patents were completely free). Furthermore, while you are correct that cross-licensing schemes are common-place and good for companies, there is no evidence that a cross-licensing scheme was what Tesla was proposing or requesting. Given that the only statements by Tesla/Musk have indicated no reciprocity requirement, Tesla is not requiring cross-licensing.

            I am remembering what I read months ago. You may be right about it being conjecture by the article’s author and not a quote from Musk. I’ll look and see if I can find the sources I read last summer.

            Although there was never an explicit statement of "we promise not to sue without condition," that wasn't my argument. My argument is that the combination of Tesla's early statement "we will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology" and Musk's recent statement "We actually don't require any formal discussions. So they can just go ahead and use them...You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them" creates an implied license to anyone who takes advantage of it, and that license would probably be enough for a court to prevent a suit for patent infringement by Tesla. You cannot give someone permission for an action and then turn around and sue them when they take that specific action.

            I think it’s up in the air exactly what he meant. If he’s so anxious to grant everyone licenses, why doesn’t he just explicitly say so in writing? All we have are the blog post with the “in good faith” weasel words, some later articles that at least guess that he means cross-licensing, and his recent statements that no discussions are necessary. If I’m advising someone who wants to use his patents, I’d advise them that the terms of this license are unclear.

            The consideration is the use of the software. You gain the benefit of the software by agreeing to the terms of the open source license. But don't take my word for it, here's a case by the Court of Appeals for the Federal Circuit that accepts and addresses an open source license as a contract: http://www.cafc.uscourts.gov/images/stories/opinions-orders/08-1001.pdf

            Yes, Jacobsen v. Katzer. I don’t think that opinion makes much sense. It stretches the meaning of mutual assent and consideration too far. The Federal Circuit strangely invoked the language of contracts as it tried to explain away the lack of royalties as consideration. But there was no need to go there as licenses can be granted unilaterally without the need of contract or consideration.

            Honestly, it’s better for the open source movement that these licenses be unilateral property grants rather than bilateral contractual agreements. That way, they’re enforceable absent agreement and consideration, and they bind third-parties who are not in privity with the promisor. The fact that they operate in rem, and not in personam, is a plus. I think the Federal Circuit reached the right result, but for the wrong reasons.

            reply to this | link to this | view in chronology ]

            • icon
              JP Jones (profile), 18 Feb 2015 @ 12:03pm

              Re: Re: Re: Re: Re:

              Yes, Jacobsen v. Katzer. I don’t think that opinion makes much sense.

              This whole section made me laugh out loud. You, who frequently utilize court cases to point out how the courts have spoken and therefore the author's opinion must be wrong, are saying the courts made the wrong decision (or the right decision for the wrong reasons)?

              Huh, that's almost exactly what many of the articles you criticize here do. I hope someone remembers to quote this the next time you post a court case as gospel*.

              * Disclaimer: I'm not saying that you're wrong to question whether or not the courts made the right decision, I'm simply pointing out that someone who frequently derides others for doing it while doing it themselves is a giant hypocrite.

              reply to this | link to this | view in chronology ]

              • icon
                antidirt (profile), 18 Feb 2015 @ 12:38pm

                Re: Re: Re: Re: Re: Re:

                I don't think that's exactly fair. Not all opinions are the same. The Federal Circuit was the first federal appellate court to look at open source licenses. It's not like there's a robust body of law behind it. If I remember correctly, and it's been a while since I read the opinion, the court wasn't saying that it's a contract as part of its holding. And the court properly recognize the difference between a condition and a covenant. I believe the discussion about consideration was dicta.

                reply to this | link to this | view in chronology ]

                • icon
                  JP Jones (profile), 18 Feb 2015 @ 4:57pm

                  Re: Re: Re: Re: Re: Re: Re:

                  Ah, so your opinions are valid, but other people's aren't?

                  I’ll provide another “real world” example from the more recent case law: Morris Commc'ns Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269 (M.D. Fla. 2002) aff'd, 364 F.3d 1288 (11th Cir. 2004)

                  The plaintiff in INS v. AP had a proprietary interest in the news superior to the defendant because of its labor. The plaintiff in Zacchini v. Scripps-Howard had a proprietary interest in his performance superior to the defendant because of his labor. Each one of those is a “real world” example of labor begetting ownership. Why deny that?

                  Haslem v. Lockwood, 37 Conn. 500 (1871). This is one of the first property law opinions that I’ve read. It discusses the two modes of acquisition I mentioned above: occupancy and accession. Here are the facts:
                  -antidirt
                  (emphasis mine)

                  So yeah, we should all take these at face value because they affirm your position, but because you kinda disagree with the conclusions on this one, it's probably wrong?

                  Anyway, it's pointless to continue this argument, because the people you're arguing with aren't looking at it from your point of view. Not because you disagree about copyright, but because you're looking at copyright from a lawyer's perspective (I'm assuming you're an actual lawyer and not a hobbyist, it seems like you wouldn't have that much knowledge of case law and argue in that manner without law school and practical use).

                  Lawyers don't look at things in terms of right and wrong, good and bad (and because you're probably a lawyer, I'll caveat this with "in general"). They look at things in terms of correct interpretation of the law and incorrect interpretation of the law. In other words, does this case meet the criteria of what the lawmakers intended? To a lawyer, the law is a checklist based on the conclusion others have come to in the past, and all factors other that how the law interacted with a specific case is irrelevant to how the law should be perceived.

                  Most people don't view the law like that. When my wife got pulled over for going 45 MPH in a 35 zone, even though she was speeding up to the 45 MPH speed limit, driving safely, and going with the flow of traffic, the law doesn't care. She broke the rule, she pays the $157. The fact that this is basically robbery, since she was driving safely and the fine is purely to fund the state (the motorcycle cop was around a corner near an area where most motorists would naturally speed up), is irrelevant to the way a lawyer thinks. That's why you have insanity like the "asset forfeitures" where police are stealing from civilians and then charging their possessions with a crime. United States v. Article Consisting of 50,000 Cardboard Boxes More or Less, Each Containing One Pair of Clacker Balls comes to mind.

                  I think that's one of the main resistances you're going to get here at Techdirt; most of the readers are upset with the law itself, and don't give a darn what the legal precedent is. Something can be legal and still be unjust. This is hard concept for lawyers to follow because from a legal perspective the law and justice are the same thing. The "stop and frisk" program was legal, the mass spying program was (sort of) legal, the "enhanced interrogation" was (again, sort of) legal, slavery was legal, the murder of Native Americans was legal...you get the idea.

                  I like that you are willing to engage with the community, even if sometimes you do it in a condescending, insulting manner. I've even learned a couple of things, and done some good research based on what you've written. But your fundamental concept, that since copyright and patent law are legal, and have held up in case law, they must be good, is a difference in perspective I can't reconcile. To me, and many others, the fact that the law supports your perspective is completely irrelevant to the discussion, and makes the situation worse.

                  That's my opinion. It won't hold up in court, but that doesn't make it any less valid than yours.

                  reply to this | link to this | view in chronology ]

                  • icon
                    jupiterkansas (profile), 19 Feb 2015 @ 9:22am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Thank you! This seems to be the root of all the controversy here on Reddit - the blind belief that all law is just and good simply because it is the law, whereas the whole point of Techdirt is to question the laws themselves.

                    reply to this | link to this | view in chronology ]

                  • identicon
                    Anonymous Coward, 19 Feb 2015 @ 4:17pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    This deserves top insightful spot for the week, honestly.

                    reply to this | link to this | view in chronology ]

                    • icon
                      antidirt (profile), 19 Feb 2015 @ 5:35pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      This deserves top insightful spot for the week, honestly.

                      Because it thinks one of most settled points in all of property law is equivalent to one of the newest and unsettled points? Hardly seems insightful to me.

                      reply to this | link to this | view in chronology ]

                      • identicon
                        Anonymous Coward, 21 Feb 2015 @ 10:39pm

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        Your side thinks barnyard noises are insightful. You're barely qualified to decide what counts as insightful.

                        reply to this | link to this | view in chronology ]

                  • icon
                    antidirt (profile), 19 Feb 2015 @ 5:15pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    So yeah, we should all take these at face value because they affirm your position, but because you kinda disagree with the conclusions on this one, it's probably wrong?

                    Again, not all opinions are the same. You're quoting a comment of mine where I explained that labor begets property. That point is so well-settled, it's ridiculous. It literally dates back at least two MILLENNIA to Roman law. It's probably older than that. There is hardly a more fundamental concept in property law. I can cite case after case, from every different level of court, going back centuries, spanning multiple continents. The point is so basic it hurts.

                    That's hardly comparable to open source licenses. How many years have those been around? Not many. There is no robust body of law interpreting them. In fact, the Federal Circuit was the first appellate court to look at them. So you're comparing one of the most fundamental aspects of property law, well-settled and well-known by jurist dating back through the ages, to a very modern problem that only a handful of courts have ever looked at.

                    See the difference?

                    As to the rest, I think you're wrong. I care about right and wrong. I care deeply about what's moral. The point I made about labor begetting property comes from the natural law, which is based in morality. In my experience, morality is the one thing Techdirt DOESN'T like to talk about. Strange you should suggest otherwise.

                    reply to this | link to this | view in chronology ]

                    • identicon
                      Anonymous Coward, 21 Feb 2015 @ 5:47pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      You're quoting a comment of mine where I explained that labor begets property. That point is so well-settled, it's ridiculous. It literally dates back at least two MILLENNIA to Roman law.

                      ...There is no robust body of law interpreting them. In fact, the Federal Circuit was the first appellate court to look at them. So you're comparing one of the most fundamental aspects of property law, well-settled and well-known by jurist dating back through the ages, to a very modern problem that only a handful of courts have ever looked at.

                      The point I made about labor begetting property comes from the natural law, which is based in morality.

                      And thank you for so beautifully proving my point. I can't imagine how you could have done it better, except by literally stating "I view morality and law as one and the same, and view morality through the lens of what is legal and what isn't." Which is not how many people view morality.

                      Also, way to completely miss my point. I don't care about your "labor begets property" theory (it's stupid, even by legal standards; there are multitudes of things that people work to create that they do not own, like every group project ever...the entire concept of intellectual property being given to someone other than the creator directly contradicts this idea). The point is that you, antidirt, often state legal precedence as if it proves a moral or ethical point. Notice my bolded emphasis, it's all the parts where you say "real world example...Why deny that?...here are the facts" when all of those things are based entirely on legal opinion, NOT REALITY.

                      At this point I have to come to one of two conclusions, either a) you are so blind to your legal bias that you can't even imagine another way of thinking or b) you're doing an excellent job of trolling me because no lawyer could possibly have such poor reading comprehension, in which case, I must say "well done."

                      Techdirt talks about morality all the time. It talks about the government spying on people, it talks about police abuse, it talks about people being abused by the very laws that are supposed to protect them. It exposes the corrupt lawyers, politicians, businesses, and police that are hiding behind what's legal but not right. That's literally the entire purpose of this site.

                      As to the rest, I think you're wrong. I care about right and wrong. I care deeply about what's moral. The point I made about labor begetting property comes from the natural law, which is based in morality.

                      I was wrong. You could say it better...you do right here. You say you care about right and wrong because of what the law says.

                      And I would counter that by saying that this site is filled with examples of where what the law says and what is morally right are complete opposites. In my opinion asset forfeiture is morally wrong. Censorship is morally wrong. Patent and intellectual property trolling is morally wrong. Choking to death an unresisting, unarmed man is morally wrong. Launching drone missiles on civilian populations without even being sure you're killing military targets is morally wrong. Gathering data and invading the privacy of individuals never accused of a crime is morally wrong. Throwing flashbangs into a child's crib with no repercussions is morally wrong.

                      Yet all these things are legal. So how can I possibly consider the law to be just?

                      reply to this | link to this | view in chronology ]

                  • icon
                    CanadianByChoice (profile), 6 Feb 2016 @ 1:56pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    While this comment is totally off topic (and I apologize for that), you've made such a good point that I think it needs mentioned.
                    There should be a way that the "public at large" can force a law to be repealed if the majority believe it's unjust or just plain wrong.

                    reply to this | link to this | view in chronology ]

            • icon
              ottermaton (profile), 18 Feb 2015 @ 5:09pm

              tl/dr of what antidirt just said

              Here's what he should have posted:

              1) I don't have any sources to back up the BS I just spewed.

              2) Normally I try to cite court cases to make my point, but I don't like this troublesome Jacobsen v. Katzer (especially because it's (one of) the only one(s) dealing with Open Source licensing and it disagrees with me), so everyone has to ignore it.


              Would have saved everyone a lot of time.

              reply to this | link to this | view in chronology ]

              • icon
                PaulT (profile), 18 Feb 2015 @ 11:22pm

                Re: tl/dr of what antidirt just said

                "I'm an obnoxious fool who will twist or ignore any reality that doesn't allow me to attack the man I'm obsessed with" would have saved everyone else more time, but I just assumed that when I saw the login name.

                reply to this | link to this | view in chronology ]

              • icon
                techflaws (profile), 19 Feb 2015 @ 5:05am

                Re: tl/dr of what antidirt just said

                And now he's already whining "it's not fair". Hilarious!

                reply to this | link to this | view in chronology ]

              • icon
                antidirt (profile), 19 Feb 2015 @ 5:17pm

                Re: tl/dr of what antidirt just said

                Yes, I disagree with certain parts of the opinion. The bit about consideration and contracts is superfluous. That's my opinion. I'm happy to say I disagree and then tell you exactly why. What's wrong with that? I wish others here did as much more often.

                reply to this | link to this | view in chronology ]

                • identicon
                  Anonymous Coward, 22 Feb 2015 @ 4:43pm

                  Re: Re: tl/dr of what antidirt just said

                  People do. People frequently disagree with you because you're a complete asshole going about doing it. Nothing wrong with that.

                  reply to this | link to this | view in chronology ]

            • icon
              antidirt (profile), 19 Feb 2015 @ 5:22pm

              Re: Re: Re: Re: Re:

              I am remembering what I read months ago. You may be right about it being conjecture by the article’s author and not a quote from Musk. I’ll look and see if I can find the sources I read last summer.

              I found the article I was remembering: http://www.latimes.com/business/autos/la-fi-hy-elon-musk-opens-tesla-patents-20140612-story.html#pag e=1

              Quote:
              Tesla will allow other manufacturers to use its patents in “good faith” – essentially barring those users from filing patent-infringement lawsuits against the electric car company or trying to produce knockoffs of Tesla’s cars. Musk cited two prime motivations for the move.

              Opening up Tesla’s technology could increase sales of electric cars and move the world away from oil-burning vehicles that contribute to global warming.

              “I don’t think people quite appreciate the gravity of what is going on,” Musk said. “We need to do something. We would be shortsighted at Tesla if we kept these things close to our vest.”

              He also believes that the patent system needs reform.

              Tesla will continue to seek patents for its new technology to prevent others from poaching its advancements and then filing their own patents as a “blocking maneuver.” But those future patents will also be open to anyone willing to follow Musk’s “good faith” guidelines.
              The information about cross-licensing appears to be coming from Musk himself. The point remains, thought, that if he really wants others to use his patents, he's not making the licenses very clear.

              reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 10:02am

      Re: antidirt

      "I think the fact that you can’t admit that patents do spur innovation in some ways, while impeding innovation in other ways"

      Patents are the RESULT of innovation, not what spurs it.

      Classic chicken and egg problem here. One cannot obtain a patent without first having innovated.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 18 Feb 2015 @ 10:05am

        Re: Re: antidirt

        classic if x then y fallacy here.

        and additionally, one can get a patent w/o innovation and one can innovate w/o involving the USPTO

        reply to this | link to this | view in chronology ]

      • icon
        JMT (profile), 18 Feb 2015 @ 3:50pm

        Re: Re: antidirt

        "One cannot obtain a patent without first having innovated."

        The USPTO seems to disagree with you...

        reply to this | link to this | view in chronology ]

      • icon
        antidirt (profile), 19 Feb 2015 @ 5:34pm

        Re: Re: antidirt

        Patents are the RESULT of innovation, not what spurs it.

        Classic chicken and egg problem here. One cannot obtain a patent without first having innovated.


        The marketable rights to the inventions act as incentives to inventors. They invest time and money in R&D because they hope to recoup their investments later with the marketable rights. This is Patent Law 101.

        reply to this | link to this | view in chronology ]

    • identicon
      Jaques bin Ladenski, 7 Feb 2016 @ 4:28am

      Re:

      Your confirmation bias and lack of reading comprehension is staggering.

      reply to this | link to this | view in chronology ]

  • identicon
    Doug D, 18 Feb 2015 @ 8:34am

    "possible registration wall"

    It's implemented in JavaScript, and therefore completely defeated by not running JavaScript.

    reply to this | link to this | view in chronology ]

  • identicon
    Bob R, 18 Feb 2015 @ 8:50am

    Attribution-ShareAlike

    I think it would have been more prudent for Musk to share his patents in a model similar to the Creative Commons Attribution-ShareAlike copyright license. In this way, if anyone used Tesla patents and then patented other improvements, Tesla could actually benefit from the improvements. Otherwise, this really does end up being an altruistic exercise.

    reply to this | link to this | view in chronology ]

    • icon
      JP Jones (profile), 18 Feb 2015 @ 4:06pm

      Re: Attribution-ShareAlike

      Nothing altruistic about it; a larger market for electric vehicles can only help Tesla, even if they can't utilize other people's patents. Right now Tesla is really the only major competitor for a decent EV, and the Tesla is expensive. It's a great car, but you're looking at an MSRP of over $70,000 for the base Model S.

      For people to be willing to buy a luxury car it helps if there are cheaper alternatives that make the idea of buy and using an EV viable to people. Marketing to the rich first was a smart move; it let's them pack the Tesla cars with a ton of features and the rich are the only ones likely to be early adopters of something that doesn't come with easy infrastructure.

      In an ideal world the CC license would be unnecessary because you could use other people's ideas freely. Being able to copy someone else's stuff is greatly overestimated. If someone designs something, sure, I can copy that design. But they have the R&D department, and they understand that design. I don't. My copy will always be second best, and never have the "newest" thing. People will pay for stuff that's new, even if they can get it cheaper in a few months. And, as shown repeatedly at this site, people will pay for things that are free and easily copied, if they're convenient and open.

      Tesla gets this. Even if someone iterates on their design, they'll be a leader in the industry because they got there first and know what they're doing. Patents are only important because people who suck at actual innovation have found they can get free money using them. Real innovators know they'll keep the lead because they're already leading the show.

      reply to this | link to this | view in chronology ]

  • icon
    Dave Cortright (profile), 18 Feb 2015 @ 8:55am

    Here's a thought: don't f'ing invest

    Have whatever opinion you want about Tesla's actions here, but if you don't like it, then either don't invest, or sell and take your money, and invest it elsewhere. Because seriously—if you have such backward thinking about IP—you have no business investing in a disruptive company like Tesla.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Feb 2015 @ 9:12am

    Tesla lost 294 million dollars last year. Their stock price has dropped 25% in the last 5 months. Sounds like a sound business model to me...

    oh, and:
    http://blogs.barrons.com/stockstowatchtoday/2015/02/17/yes-tesla-should-be-worried-about-apples- electric-car/

    reply to this | link to this | view in chronology ]

    • identicon
      andyroo, 18 Feb 2015 @ 12:34pm

      Re:

      Tesla scared of apple.....LOL

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 18 Feb 2015 @ 11:50pm

      Re:

      "Tesla lost 294 million dollars last year."

      Most startups have high debts during their early phases, especially those in new industries, and especially those in physical manufacture of new technology and infrastructure. So?

      "Their stock price has dropped 25% in the last 5 months"

      From July to November 2011, stocks in Netflix dropped from nearly 3 dollars to almost 60 cents. Horrible investment, huh? That company's dead! (hint: current stock is nearly 5 dollars).

      "oh, and:"

      ...and? I found blogs with a quick search that say exactly the opposite. For example:

      http://www.businessinsider.com/the-apple-car-is-going-to-be-great-for-tesla-2015-2

      Is that really what you base your opinion on? Whatever blog post confirms your preconceived preferred conclusion about the fate of a company you clearly dislike? Remind me not to take investment tips from you...

      reply to this | link to this | view in chronology ]

    • icon
      JP Jones (profile), 19 Feb 2015 @ 10:41am

      Re:

      Forbes and Bloomberg disagree. Hey look, I can spend five seconds on a Google search too!

      That being said, Elon Musk has stated that Tesla is not expected to be profitable by normal accounting standards until 2020. Short term profits are not the only thing that a company (and investor) should look at when determining the value of a company. The reason our economy collapsed so spectacularly was because everyone was doing precisely that.

      Sometimes you have to invest at a pure profit loss in order to gain long-term rewards. Infrastructure, research, and a market are all real benefits that they're spending money on at the loss of potential profit. These things will pay themselves back once the market is established with interest.

      It sometimes horrifies me that Wall Street (and many other people) don't grasp this basic economic principle. It makes perfect sense when it's a financial investment (spend $1,000 now, get back $2,000 after 10 years) but investment into a company with the same mechanism somehow blows people's minds.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Feb 2015 @ 9:18am

    The whole world is short term thinkers.

    It is much harder the farther you try to predict the future and the potential gain of doing something not short term. Take the school system; make the system cheap or even free and you would see a gigantic boon in 10-20 years from a well educated population.
    Prisons: Invest in educating prisoners and bonuses for hiring ex-cons and in general just making the system about integrating them into society and you would see a huge drop in returnees and lots and lots of money saved. To be fair, this is the age old question about punishment vs rehabilitation, where I also am having difficulty looking past short term punishment.
    The internet: Boost the connection speed for the whole country and innovation will follow in a big way.
    The poor and the sick: You could straight up give the poor money enough to take care of them selves with a place to live and transport and make medical care much cheaper of free and you would find that in general people would probably live longer, work longer and be more productive which would pay itself back. The short term is that we feel that we are giving money away now, for nothing.

    There will also always be people who takes advantage of these things. Prisoners who will never go straight, people who will just take the money and keep leeching without doing the work, but I believe that those are few and far between. Those would be the ones that we will see first however and in the short term, those apparently gall us too much to invest in the long term.
    As much as I despise greedy Wall Street money grubbers, I can't really blame the for being short term thinkers. It seems to be in a lot of people.

    reply to this | link to this | view in chronology ]

  • identicon
    David, 18 Feb 2015 @ 9:20am

    Musk is going for the big haul

    Musk would be an idiot to try keeping a lid on the electric car patents in any manner.

    He is currently planning to step up the capacity of world-wide car battery production in new plants by a multiple.

    Who is going to buy all those batteries when he tries monopolizing electric car production via patents?

    He'll have the advantage of "first to market" with the batteries.

    Patents are for people who stop after one invention.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 18 Feb 2015 @ 9:35am

      Re: Musk is going for the big haul

      Patents are for people who stop after one invention.

      Or, in the case of several patent trolls, some more venturous than others, those who never invented anything in the first place.

      reply to this | link to this | view in chronology ]

  • icon
    Retsibsi (profile), 18 Feb 2015 @ 9:40am

    If memory serves me didn't the guy who devised the standard shipping containers let anyone use the designs for free. When he started there were all sorts of proprietary standards which no-one would use because they had to pay, and goods were transported on pallets or anything else to hand, taking days to unload a ship.
    Now those container designs are used everywhere and he is rather rich.....

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 5:35pm

      Re: faulty history

      the company that did first did shipping containers went bust,
      and the reason was simple, there is a basic price to pay for a ship capable of carrying a shipping container, and the company should have made heaps of money carrying more stuff because they could load and unload their boats quicker, but they soon discovered a flaw in the plan, that company needed to rebuild the ports to handle the containers, the costs of that overwhelmed the company, but the ball they started rolling benefited everyone else shipping goods.

      Presumably Musk has an appreciation of tech history, and realizes that for his cars to really sell he needs filling stations, and that means more electric vehicles to justify the infrastructure development and that means more manufacturers of EV's. which means compatible power connectors. musk will go broke if he tries to do the EV infrastructure himself.

      reply to this | link to this | view in chronology ]

  • identicon
    RD, 18 Feb 2015 @ 9:43am

    Funny thing about Apple

    Funny that Apple jumped on using Tesla's tech like 4 *seconds* after they opened the patents up, but spent a ton of resources suing Samsung. Gotta love naked hypocrisy.

    reply to this | link to this | view in chronology ]

  • identicon
    Yes, I know I'm commenting anonymously, 18 Feb 2015 @ 9:58am

    To draw a parallel: this guy would say that Wall Street should not trade in (fossil fuel) motor companies because none of them have their own special petrol, fuel-hose plugs and petrol stations.

    The charging infrastructure is the pivotal element for the acceptance of the electric car. The way a battery was built two years ago is not.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Feb 2015 @ 10:06am

    That,s why common standards and protocols are important to grow an industry,
    see usb ,wifi, http, ssl,vhs etc
    etc imagine if there was 20 different wireless standards,
    routers would be more expensive,
    tablets would be more expensive,
    as they have to have more wifi chips ,installed .for different company,s routers and wireless standards.
    see rim ,its got loads of patents,
    its failing to get people to buy its new phones .

    when you see a company relying on its patents ,
    and sueing other companys ,
    you know that company is in decline.
    APPLE makes most of its money by making great products,
    not by sueing people over patents.

    All phone companys ,consumers , are saving money now as there s now, one standard usb phone charger,IN the eu,
    and it saves the environment as we used to have
    30 different size of chargers,with different voltages
    and connector type for phones .

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 10:34am

      Re:

      Remove this paragraph and you got a pretty good post

      when you see a company relying on its patents ,
      and sueing other companys ,
      you know that company is in decline.
      APPLE makes most of its money by making great products,
      not by sueing people over patents.

      reply to this | link to this | view in chronology ]

    • icon
      monkeyman34 (profile), 22 Jun 2016 @ 8:26am

      Re:

      @Anonymous Coward, i don't understand why Tesla has never made any profits. I guess either they don't have enough revenue or their costs are too high, or both. Do you have any insight into Tesla's financial situation? Thanks.

      reply to this | link to this | view in chronology ]

  • identicon
    Ed Allen, 18 Feb 2015 @ 11:00am

    History could shed some light here

    Orville Wright developed the idea of twisting a plane´s wings to enable lateral control of the craft.
    For this great idea, the Wright Brothers were the recipients of an early “pioneer patent” –
    a right not only to the specific invention, but to the general concept.
    Even though Curtis developed flaps and ailerons on the wings to bring control to the craft,
    the Wrights fought in the courts (and often won) to stop him and other rivals
    from trespassing on their turf of general aircraft control.

    The effect on flight innovation was more than noticeable at the time. The patent war they unleashed
    took the steam out of the budding industry. In 1912, only 90 aviators were in the air each day in the United States.
    Across the pond in France, nearly 1,000 airmen were flying, testing and further developing their craft.
    http://mises.org/blog/patents-and-birdmen

    After WWII the US reduced the patent litigation and went on to maintain the lead gotten by the infusion
    of technology from around the world for years.

    The US forced mandatory licensing of Semiconductor and chip manufacturing for years,
    that grew rather spectacularly without the legal friction.

    reply to this | link to this | view in chronology ]

  • identicon
    Tech Clean, 18 Feb 2015 @ 11:31am

    He has the Apple/Microsoft thing all wrong

    Microsoft didn't clean Apple's clock because Apple opened up; in fact it was quite the opposite. Apple was a very closed, controlled ecosystem where Microsoft was much more open. People were able build Window's machines but not Apple so MS won out. This is the same thinking Elon Musk is following.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 12:51pm

      Re: He has the Apple/Microsoft thing all wrong

      Tesla's gonna start making station wagons?

      reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 18 Feb 2015 @ 2:28pm

      Re: He has the Apple/Microsoft thing all wrong

      He actually has it even more wrong than that. It's a common misunderstanding, though.

      Microsoft and Apple are not, and never have been, competitors in the first place. They are in different lines of business: Microsoft is primarily a software company, and Apple is primarily a hardware company.

      That's why Microsoft bailed Apple out when Apple was about to go under: if Apple is healthy, that expands the market for Microsoft products.

      reply to this | link to this | view in chronology ]

  • identicon
    andyroo, 18 Feb 2015 @ 12:19pm

    Secrets

    Hopefully this does not mean that China starts producing inferior battery packs that people purchase because they are cheap and then blame Tesla when they fail or explode or burn up for no reason.

    I just hope Tesla can protect at least a few secrets so that this does not happen to them.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Feb 2015 @ 12:26pm

      Re: Secrets

      Unless the inferior battery packs are marketed using the Tesla name I do not see a risk to Tesla that would be avoided by 'protecting a few secrets'?

      reply to this | link to this | view in chronology ]

  • identicon
    Haggie, 18 Feb 2015 @ 4:16pm

    I think it is a little disingenuous of Musk. No established company is going to build a new product using the patented technology of a third-party based on the comments of the CEO of that third-party.

    They could build a new product based on Tesla patents, Tesla runs into financial problems, Musk gets ousted, and the new management begins suing everyone that uses the Tesla patented technology. Since the third-parties already have products in the market place, Tesla would be able to hold them hostage to a massive settlement.

    Insert "It's a trap" meme here.

    reply to this | link to this | view in chronology ]

    • icon
      JP Jones (profile), 18 Feb 2015 @ 6:35pm

      Re:

      I don't think this would hold up in court. If the president of the company, speaking on the company's behalf, states that they will not sue for people using their patents, and then sued someone for using their patents, you can bet easy money that the defense will hold that quote up to the judge.

      It would be somewhat akin to a parking lot putting up a sign that says "free parking" and then towing people who don't pay for parking. Who wins the case would depend on the lawyers, but if they planned on suing, they just really hurt their case.

      Musk is a millionaire dreamer who invested nearly all his money into SpaceX because he wanted the human species to be able to survive an extinction event on Earth by colonizing other planets, and is a huge supporter of clean energy and has invested his money and energy into it. That kind of person does try and trap people into lawsuits (if for no other reason than the reputation loss).

      Love him, hate him, agree, disagree...the guy is passionate about his stuff and has repeatedly put his money where his mouth is. Who knows, it may end up blowing up in his face. Elon Musk may take extreme risks, and may be more in it for the tech than the money (which may end up hurting his business).

      But anyone who thinks Elon Musk is a patent troll has clearly never bothered to read a single thing about him.

      reply to this | link to this | view in chronology ]

      • icon
        Mason Wheeler (profile), 19 Feb 2015 @ 9:01am

        Re: Re:

        Got to agree here.

        I don't think this would hold up in court. If the president of the company, speaking on the company's behalf, states that they will not sue for people using their patents, and then sued someone for using their patents, you can bet easy money that the defense will hold that quote up to the judge.

        ...and the judge would give it some real weight, if not outright dismiss the entire case because of it. It's a concept known as "promissory estoppel": a promise doesn't have to be a signed contract to have real legal force behind it.

        Love him, hate him, agree, disagree...the guy is passionate about his stuff and has repeatedly put his money where his mouth is.

        SpaceX, clean energy... and the Hyperloop project. He came up with the idea but said he was too busy with SpaceX and Tesla to run it. But that isn't stopping him from putting up the money to construct a track (in Texas, IIRC) for those who are working on it to test their capsules, which is kind of awesome of him.

        reply to this | link to this | view in chronology ]

  • identicon
    Just Some Guy, 20 Feb 2015 @ 12:12am

    Let's not forget ...

    ... that the main reason for Apple's success in the early days was the Apple II, probably the most open computer in its class, allowing thousands of third-party plug-in cards.

    Without that openness, it would have gone the way of the Colecovision :-)

    In fact, the Apple II was the last thing ever made by Apple that was any good.

    reply to this | link to this | view in chronology ]

  • identicon
    harsh, 9 May 2015 @ 12:30pm

    Investing

    Humm....this article must be ranked at the top sir...... you are awesome to say that.....this type of ..thing...


    Contact Me Here
    Contact Me Here

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Jan 2016 @ 2:37pm

    thanks for writting it makes a difference

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Feb 2016 @ 10:36am

    It's free. It's free? It's free! It's free?! Elon Musk is a fucking pirate.?!

    reply to this | link to this | view in chronology ]

  • icon
    CanadianByChoice (profile), 6 Feb 2016 @ 2:25pm

    Puzzled

    I'm puzzled by the discussion around Elon's licensing his patents.
    As I understand it, a license (as applied to software and/or patents) is an agreement about the conditions underwhich that product can be utilized. In this case, there is no agreement involved; Elon has simply said that anyone that wants to use this patent can do so without fear of repercussion (read "litigation").
    Does that qualify as a "license"?

    reply to this | link to this | view in chronology ]

  • identicon
    Ashok, 4 May 2016 @ 6:21pm

    Elon Musk is a wonderful CEO who is a strong believer of innovation. So relaxing the Tesla's patent is a welcoming for the society

    reply to this | link to this | view in chronology ]

  • icon
    monkeyman34 (profile), 22 Jun 2016 @ 8:16am

    I always heard that Tesla does not have patents but I never really did any research about the topic...until now. I must admit, I've never really understood Elon Musk's business intentions.
    My thoughts:
    As fas as I know, Elon Musk is already very rich from selling PayPal, running various companies, etc.
    Also, I think that Elon Musk is clearly a visionary and exceptional man, so he most likely has a very long-term vision of his business intentions. That being said, my guess would be that one reason he does not push for patents could simply be because he is already very rich so his main incentive is not necessarily profit maximization.
    One major thing I don't understand about Tesla is why it doesn't make any profits? If you look at its financial statements you'll see that Tesla has always been in negative territory (doesn't make money). Does anyone know why or have any insight into that topic?

    reply to this | link to this | view in chronology ]

  • icon
    jchuckjohns (profile), 24 Aug 2016 @ 5:07am

    Tesla Patents

    I think Elon is a truly great man. His innovations, concern for the environment and generous spirit guarantee him a place in history.

    reply to this | link to this | view in chronology ]

  • identicon
    Theresa Moore, 15 Oct 2016 @ 10:22am

    Tech News

    Yes, it is true. But I have a confusion and that is I don't understand about Tesla is why it doesn't make any profits?

    Best Tech Information

    reply to this | link to this | view in chronology ]

  • identicon
    HH, 22 Nov 2016 @ 3:10pm

    Legal issues

    I just wanted to clarify the legal and practical ramifications of Musk's decision to "release" his patents. Get ready, because this is VERY confusing:

    There aren't any.

    There is literally no legal effect of issuing a press release indicating you will not enforce your patents. None. Zilch. Nada. Pretty much any in-house attorney (including those at Tesla and GM, of course) would know this. Such an agreement would not comply with the statute of frauds, first of all, and there are several other reasons why there would be no legal ramification of making this statement.

    Practically speaking, large companies infringe each other's patents all the time, but rarely get sued by the other large companies, because they're ALL infringing each other's patents. This is why many large companies build defensive patent portfolios - they generally hold patents NOT to enforce them, but to prevent their competitors from suing them.

    So essentially, Musk's initial press release, and subsequent comments, meant nothing. He's a smart guy. He knows those comments mean nothing. But he also knows that the general public is ignorant. When people say his press release wasn't "altruistic," and you assert "that's the point" as though you're clever, you fail to recognize that you're right, but ironically so - your reasoning is off :/

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Special Affiliate Offer
Anonymous number for texting and calling from Hushed. $25 lifetime membership, use code TECHDIRT25
Report this ad  |  Hide Techdirt ads
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.