Tesla Motors Inc (NASDAQ:TSLA) has been compared with Apple Inc. (NASDAQ:AAPL) countless times, and this time, we have a big difference to talk about. Tesla wants to share, while Apple probably never will. This same difference could be said of Tesla CEO Elon Musk and former Apple CEO Steve Jobs. While Jobs loved the patent system and vowed to destroy iPhone competitors using patent infringement lawsuits, Musk has taken the opposite approach.
Tesla goes open source
Last week, Tesla Motors Inc said that anyone who wanted to use its patents in good faith could use them to make electric cars. Musk said sharing their technology was better than just hoarding it and suing people who use it. He also said that while in the beginning they did utilize the patent system, they now see that they are competing with the entire auto industry and not just with electric cars. As a result, he hopes that by open sourcing their patents, big automakers will also become interested in seriously making electric cars.
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In the blog post announcing the decision last week, Musk noted that competitors are still lagging far behind Tesla Motors Inc (NASDAQ:TSLA). He also seemed to say that in order for the automaker to grow, the market must be more competitive. After all, consumers who start by buying a less expensive electric car from another company might be more likely to opt for one of Tesla’s premium EVs down the road.
Apple loves to sue competitors
The patent wars between Apple Inc. (NASDAQ:AAPL) and competitor Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) are extremely well-documented. The two companies have battled each other in courtrooms around the world. However, a post by Matt Asay on Readwrite says Apple should be taking notes from Tesla Motors Inc (NASDAQ:TSLA).
Many investors have begun to worry that Apple Inc. (NASDAQ:AAPL) has lost its innovative edge. However, Tesla Motors Inc (NASDAQ:TSLA)’s decision to open up its patents offers an interesting perspective. Instead of throwing piles of money at patent infringement cases, Tesla is taking a different tact.
Innovations rather than lawsuits
Asay says innovation protects far better than a series of patents and infringement suits surrounding them. Have to admit, this is something I wondered myself last week when thinking about why Tesla Motors Inc (NASDAQ:TSLA) would open all of its patents to its competitors. Could it be that the automaker has already secretly innovated so far beyond its current patents that those patents no longer matter?
Musk himself alluded to this in his blog post, saying that companies shouldn’t be relying on patents because it means they either aren’t innovating at all or they aren’t innovating fast enough. He said companies should innovate so fast that they invalidate their previous patents. In other words, it’s possible that they may have more to reveal in terms of battery technology when they open up that massive gigafactory they’re planning.
Innovate or die
Asay says Apple Inc. (NASDAQ:AAPL) could do what Tesla Motors Inc (NASDAQ:TSLA) is doing and innovate so fast that it invalidates its patents. He says Apple should be constantly pushing forward rather than focusing so much on “cashing in on old achievements.” He thinks the mobile industry would advance much more quickly if Apple opened up its patents and that Apple would still see its earnings rise, possibly even faster than they are now with the constant pending lawsuits overhead.
Clearly there’s something to learn from the open source model, and Asay thinks so too. He pointed to comments from Red Hat CEO Jim Whitehurst from “years ago” that by going open source, companies force vendors to “innovate or die.” He said that with open source, customers only buy subscriptions when software is being improved constantly and vendors “deliver real value.”
In other words, it may only be a matter of time before Apple Inc. (NASDAQ:AAPL) finds itself struggling because it doesn’t provide any innovations to back up that fancy Apple logo on its products.