How disclosing your patents can be a gift to yourself

By sharing its patents, Californian electric car maker Tesla has caused quite a stir. There are quite a few who believe that this move is economic madness. But there’s more to it than you might think.

Imagine that a car maker suddenly discloses his valuable patents to all and sundry. Wouldn’t you too be inclined to think the company’s management has lost its marbles? Wouldn’t you also say that this may be a service to society as a whole, but disastrous for the company’s own business.

A car maker who does such a thing doesn’t necessarily have to be altruistic nor does he want to harm himself economically. On the contrary: By disclosing his patents, Californian electric car marker Tesla is pursuing purely economic interests. That’s because disclosing patents means opening up and enlarging the market for electric cars – with Tesla in an excellent starting position. The attention-grabbing news which Elon Musk launched via a blog entry soon had the whole world talking about the car maker’s good deed. This newly created market will not be quick to forget how it was established. Despite new competition, the car maker is certain to initially have a leading role thanks to many years of development work, so that this move was of huge marketing value.

That being said, this was not such a new idea: Creating markets through open systems has long since been customary in the IT sector. Spread your technology, save development costs and win new users by creating for yourself a new, bigger market by disclosing your source code. The term “Open Source”, which was originally introduced for marketing purposes, has now become an established practice.

Further development through co-operation with competitors

The principle of further development by involving competitors is a widespread occurrence in the IT sector that goes way beyond software business. Telecommunications giant Cisco, for instance, is now co-operating with strategic partners, customers and cloud providers in order to create the biggest public cloud platform for critical business and high-performance applications. Thanks to a huge network, the open, global OneCloud partnership programme offers service producers, educational institutes and public authorities ways and channels to quickly launch new cloud solutions.

Conclusion: It’s important to keep on developing. Companies that want to grow or succeed on the market must create new offers and be able to respond to changing customer needs – also and especially if they want to strengthen competition. If they fail to do this, they will not benefit for very much longer from some of the patents they have locked away.

Author: Andre Kiehne

Director Solution Sales, Microsoft Germany GmbH

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