Ford Pretends To Open Up Its Patents Like Tesla, But Doesn’t; Media Falls For It

As you probably know by now, last summer, Elon Musk announced that he was freeing up all of Tesla’s patents. He pointed out that he didn’t believe patents made any sense, and they especially didn’t make sense in the electric vehicle space where they were clearly holding innovation back. Because some investors still couldn’t comprehend this — and assumed (for months!) that there must be some sort of catch, earlier this year Musk clarified that, yes, he really, really meant it, and Tesla’s patents were totally free. No need to obtain a license. No need to pay a fee. No need to talk to or tell Tesla about it — just go and innovate.

Earlier this week, Ford made an announcement claiming that it, too, was opening up its patents — but the details show that this is a lot more hype and PR than substance. First, unlike Tesla, it’s not all of its patents, but rather a specific portfolio of electric vehicle patents. Second, and much more importantly, it’s not open. At all. You still have to license them and you still have to pay. This is just Ford announcing “Hey, we have patents, come pay us to use them.” That’s not opening up those patents. It’s marketing the fact that you need to license them. This is the opposite of what Musk did with Tesla’s patents.

To access Ford’s patents and published patent applications, interested parties can contact the company’s technology commercialization and licensing office, or work through AutoHarvest – an automaker collaborative innovation and licensing marketplace. AutoHarvest allows members to showcase capabilities and technologies, then privately connect with fellow inventors to explore technology and business development opportunities of mutual interest. The patents would be available for a fee.

And yet, nearly all of the press coverage worked exactly the way Ford intended: claiming that Ford was doing the same thing as Tesla. Here’s just a sampling:

That last one is particularly hilarious. The title doesn’t reference Tesla, but early in the article it does — and again falsely claims that Ford’s program is free:

If, as basic economic theory teaches, something is worth only what someone or group of people is willing to pay for it, then it seems the intellectual property associated with electric vehicles and hydrogen fuel cells is worthless.

Ford Motor is the latest car company to make this case. Today Ford joined Toyota Motor and Tesla Motors in making a vast range of patented electrification technologies available to its competitors. All free for serious EV developers.

Second, that’s not what basic economic theory teaches at all. It’s what ignorant armchair economists think it teaches. I know we have to go through this every few years, but price is not a measure of value. Price is determined by the intersection of supply and demand, and can be influenced by a number of different factors unrelated to value. The value to the buyer plays a role in determining the demand curve. Because if the price is less than the value derived, then that’s when the buyer is likely to buy. But giving something away does not, in any way, mean that something is worthless.

And, again, this article misses the basic fact that Ford is not giving these away for free.

And people wonder why news publications are struggling to hold onto readers.

Permalink | Comments | Email This Story

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s