Small Business bannerSmall Business Centre
http://www.canadianbusiness.com (© Rogers Digital Media 2014, All Rights Reserved.)
Updated: Thu, 31 Jul 2014 08:00:00 GMT | By Deborah Aarts

Billionaire Elon Musk can set his patents free-but for most businesses it's a terrible idea

Think twice before buying the Tesla founder's open-source idealism.


Elon Musk with SpaceX logo

SpaceX CEO Elon Musk unveils the company's new manned spacecraft, The Dragon V2, during a news conference in May 2014. (Kevork Djansezian/Getty)

Say what you will about Elon Musk, but the man puts his money where his mouth is.

Less than a year after making public his concept for a "Hyperloop" high-speed transportation system -essentially saying, "have at it, developers"-the erstwhile PayPal co-founder, current CEO of Tesla Motors and SpaceX, and general poster boy for successful geeky entrepreneurs has made another bold declaration of his laissez-faire attitude toward intellectual property.

In a blog post with the nerd-bait title " All Our Patent Are Belong to You " (he knows his video-game literate audience), Musk announced that Tesla will let anyone who wants to use its patented electric-car technology "in good faith" do so freely, with no fear of legal action. He backed it up with the bold symbolic gesture of clearing the wall of patents that once graced the lobby of Tesla's headquarters. "They have been removed," he wrote, "in the spirit of the open source movement, for the advancement of electric vehicle technology."

READ: The Hyperloop may be far-fetched, but the impossible is Elon Musk's specialty »

Patents, Musk went on to argue, are ineffectual relics that "history has repeatedly shown to be small protection indeed against a determined competitor" and that "serve merely to stifle progress." In their absence, he reasoned, brilliant technology like Tesla's can get to market much more quickly and effectively, because additional players will be able to work on the end goal without fear of recrimination.

It was, as the kids say, a baller move. Almost immediately, the Internet lit up with laudatory odes. "This is beyond outstanding!" wrote one commenter. "Impressive is not a strong enough word," another chimed in. Richard Branson- himself something of a Musk fanboy -blogged that he was "very impressed" by the decision, adding, "I hope many other entrepreneurs follow [Musk's] spirit of ingenuity and initiative."

Let's hope they don't. While someone of Musk's stature and wealth has the luxury of not having to worry about the ill effects of would-be copycats on his business, the garden-variety entrepreneur struggling to bring a brilliant idea to market isn't so lucky. For these aspiring moguls-and there are thousands and thousands of them in Canada-mimicking Musk's idealism is a terrible idea.

That's because the spirit of collaborative innovation Musk so admires amounts to little more than a platitude in the business environment in which most people operate. As with all utopian ideas, there is much to admire about it, at least in the abstract, but the reality is far grittier.

READ: How to Protect Your Intellectual Property »

In the real world, smaller companies that don't sufficiently protect their intellectual property are vulnerable to having their ideas plucked by predatory competitors with sharp eyes and loose scruples. Without patents locked down, they'll struggle to get the funding and grants needed to commercialize their products and services-things Musk doesn't need to worry about. And they'll expose themselves to the litigious behaviour of non-practising entities, a.k.a. "patent trolls," mercenary firms whose entire purpose is to buy old patents and then threaten to sue the pants off unprotected businesses with similar ideas.

Patent trolls have been common in the U.S. for years, and they're now taking hold in Canada . Last year, one such company, Dovden Investments, launched at least 35 lawsuits against Canadian organizations-including a school for gifted children in Alberta and a pair of individual developers of free public-transit apps-that ostensibly stole the obscure intellectual property in its portfolio. If patent trolls have no qualms about shaking down benign operations like these, just imagine the damage they can do to revenue-driven operations.

READ: Patent trolls invade Canada »

Securing patent protection is no one's idea of a good time. It takes too long, involves too much tedious paperwork and costs too much. There's a compelling case to be made for a serious overhaul of the process to make it more useful to businesses, especially smaller ones. But patents aren't frivolities to be discarded on an idealistic whim. At least, not for those among us who are still working to make their millions.

More stories from Canadian Business

Connect with Canadian Business

Scroll upScroll down

Recently recommended stories

advertisement