On June 12, 2014, Elon Musk, the CEO of Tesla Motors (TSLA), announced that Tesla will “not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” Musk reasoned that, amongst other things, “too often these days [patents] serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.”
His strategy and opinions of the patent system earned rave reviews from various members of the media as well as detractors of the patent system. It also seems to have had a positive effect on Tesla’s stock, as on June 11, TSLA closed at 204.47, while on August 29, 2014, TSLA closed at 269.7.
Although Musk’s specific opinions regarding the patent system may be uniquely tailored to serve the immediate business concerns of Tesla and its investors, his generalization of the patent system couldn’t be further from the truth.
ONE OF THE PRINCIPLE BENEFITS OF THE PATENT SYSTEM IS THAT IT CREATES A RECORD OF HUMAN ACHIEVEMENT
One of the principle benefits of the patent system is that it creates a record of human achievement so that those uniquely brilliant enough to invent, or to think up an elegant solution to a complicated problem, will not die and take those ideas to the grave (similar to the ancient Egyptians and Mayans). The right to a limited monopoly granted by governments is purportedly to influence those to disclose these ideas. Once that limited monopoly expires, anyone is free to utilize the disclosed knowledge.
As a patent owner, Tesla and its shareholders can choose to utilize the limited monopoly rights granted by its patents as they see fit. But, to be a patent owner, one must first file a patent application. As long as Tesla continues to file patent applications to create a record of its technological achievements, than the developers, engineers, and inventors of the future can pick up wherever Tesla may leave off.
THE ABSENCE OF A PATENT SYSTEM WOULD STIFLE THE EXCHANGE OF SPECIALIZED KNOWLEDGE AND THAT WOULD TRULY BRING ANY NOTION OF PROGRESS TO A STIFLING HALT
I do not agree that this is a system that “stifles progress.” It is actually a system that ensures the continual exchange of substantial technical knowledge. Contrarily, the absence of a patent system would stifle the exchange of specialized knowledge and that would truly bring any notion of progress to a stifling halt. The continual exchange of discovered knowledge is far more important than the merely temporary obstructions Musk cites in his rational for disdain of the patent system. In my opinion, the patent system provides a perpetual lasting benefit to humanity that is more important than the temporary business concerns of Tesla and its CEO.