Elon Musk asserted that he doesn't have a problem releasing patents for public use, however, he will go to great lengths to protect his companies' trade secrets.
The Tesla tycoon, Elon Musk, is in the news this week, not for any expansion into new technology but for his opinion on patents. He is quoted in an interview that “Patents are for the weak.” In a more profound conversion, he explains that patents only serve to stifle progress, and he believes by releasing Tesla’s patents, he can help get the progress moving again.
Earlier this month, Musk announced he had released all of Tesla’s patents stating that anyone who would like to use them will not be in the firing line for a lawsuit from Tesla as long as they are used in good faith. This isn’t the first time he has released Tesla’s patents. In 2014, he made the patents available for anyone to use for free, stating that “patents do not define technology leadership.”
What are Patents?
Patents are a government document in which the inventor agrees to disclose the details of the invention in exchange for limited exclusive rights to market and sell the invention. When disclosing information on the creation, anyone can improve that invention or design around it and patent that advancement. Within the exclusive period, no other person or company can make, use, sell or import the invention without permission from the inventor. So patents, in theory, do not stifle creativity or technological advancement.
Elon Musk’s Valuation of Trade Secrets
While Musk does not value patents, he does value trade secrets. He likes trade secrets so much that Tesla bought battery manufacturer Maxwell Technologies for $218 million to learn its trade secrets for dry electrode batteries. Musk’s company is notoriously tight-lipped on their trade secrets and will protect them as far as the law allows, including suing various employees.
However, unlike patents, trade secrets stifle innovation and any advancement in technology. A trade secret is a secret only known to the inventor on how the invention works. Since nobody else knows the secret, no one can improve on it.
Trade secrets have become the preferred protection for various tech multinational companies. By hiding behind trade secrets, they act as protection against the threat of creative destruction. It is the reason why these international companies lobby for strong trade secret laws and weak patent laws, which is clearly shown in Elon Musk’s low opinion on creating patents and his high opinion on trade secrets.
People like Elon Musk, who choose to opt for trade secrets above patents, are bad public policy as it stifles creativity, innovation, and growth and consolidates profits, markets, and power to a small percentage of massive corporations that become immune to the threat of creative destruction.
Elon Musk is a technological genius and a very successful businessman, but also wacky and aloof. By saying he promotes creativity and forward-thinking, helps save the world with his electric vehicles, and then uses trade secrets above patents, it shows that these multinational companies think about only themselves. They do one thing for good marketing but are doing something else that’s self-serving—just another day in the hypocritical world of Elon Musk.