Tesla - Harvard Case

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Daniel Penetar Professor Cummings MGT 509: Business Policy 28 June 2015 Tesla What implications do actions regarding patents taken subsequent to the case by Elon Musk mean for Tesla's organizational sustainability? And, for the electric auto industry? While most people, myself included, would think that patents are the bread and butter of the electric vehicle industry, it turns out that Tesla had a different way of thinking. After realizing that alone, Tesla could not produce enough electric vehicles to abolish the carbon crisis, they decided to make all of their patents open source. Patent trolls aside, Tesla’s decision seems contrary to the very purpose of a patent. Textbooks teach us that a patent rewards an inventor with a temporary monopoly on an invention that he or she might otherwise be tempted to keep secret. A definite patent term, which is usually 20 years, encourages the inventor to fully exploit the market for his or her intellectual property. Without this exclusivity, we are told, innovation would be discouraged. “Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.” (Tesla Motors) After reading this article, I honestly am blown away by the amount of foresight and bravery that Tesla is demonstrating in order to do what they think will better everyone, not just themselves. It is the finest act of unselfishness in a long time. Ironically, this has a lot of similarity to the Patagonia case. Tesla is looking to better everyone rather than solely focusing on themselves. Behind the scenes of this decision, which

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