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.
A common complaint for closed source software-as-a-service is that it can just go away almost any minute -- leaving users abandoned without any immediate backup solutions. There might be alternatives to switch to, but the alternatives are not exactly the same, and this is why people complained so much when [GeoCities, Google Reader, FormsCentral, etc.] shut down. Users get accustomed to certain features that may be unique. Some companies are better at handling service shutdowns than others, but in the end, it's still really annoying.
After you've finished checking out those links, if you have some spare change (or more) and would like to support Techdirt, take a look at our Daily Deals for cool gadgets and other awesome stuff.
Even to those of us who are not experts in foreign policy, it is obvious that the security situation is deteriorating across a huge swathe of the Near East and Africa, as attacks in Afghanistan, Iraq, Syria, Yemen, Egypt, Libya, Nigeria, Cameroon and elsewhere multiply. Western analysts seem to be struggling to come up with a cogent explanation for this increasing success. That makes this short but illuminating post by John Robb particularly valuable. He describes what is happening across this vast area as the "open jihad." Here are its key characteristics:
Open jihad evolves (gets better) through massively parallel co-development. All of the groups in the open jihad, no matter how small (even down to individuals), can contribute. They do this by:
1. tinkering with tactics, strategies, and technologies that can be used to advance the open jihad.
2. testing the efficacy of these innovations by using them against the enemy. In other words, throwing them against the wall to see what sticks.
3. copying the innovations that work.
These are also some of the key features of open source -- hence the name "open jihad." Their appearance in the context of international violence is a reminder that they are not limited to the digital world, with things like open source, open access, open data and all the other "opens," but are a set of very general principles for producing extremely rapid innovation in any domain. That might provide a clue to governments struggling to deal with this growing threat to stability that they ought to try something similar, rather than resorting to traditional responses that are doomed to fail when dealing with a new kind of enemy.
Although Arduino has figured a few times here on Techdirt in the DailyDirt section, it's not very well-known outside the world of open hardware, where it was one of the pioneers (its reference designs are distributed under a CC-BY-SA license, and all of its software under the GNU GPL or LGPL). One sad sign that Arduino has arrived is that there is currently a falling out between some of the founders (original in Italian), partly over the rising monetary stakes involved.
The Italian company set up by one founder, Gianluca Martino, has been the main supplier of Arduino products for years -- the open hardware license allows others to make them, too, but not to claim that they are "official." Originally called Smart Projects, it has now renamed itself Arduino Srl, and taken on a new CEO with the aim of growing sales and taking the company public in a few years' time. That hasn't gone down too well with perhaps the best-known of the founders, Massimo Banzi, who oversees the development of the whole Arduino project, and heads up the Swiss-based company Arduino Sa, a subsidiary of the main Arduino Llc, registered in Massachusetts.
Alongside the original Arduino site arduino.cc, Martino's company has now created arduino.org, with a similar color scheme, and the motto "the adventure continues." Both Martino and Banzi say they are discussing partnerships with other manufacturers -- Martino with Bosch and Panasonic, Banzi with Intel -- with a view to selling more Arduino boards around the world (original in Italian). Inevitably, perhaps, the two factions are fighting each other in lawsuits.
However those suits are decided, it seems possible that there will be some kind of fork of Arduino, with the two rival camps claiming to be the true heirs of the original project. That's common enough in the world of open source software, but this will probably be the first time it has happened in the open hardware field.
We've written a few times about Elon Musk and Tesla's decision to open up all of Tesla's patents, with a promise not to sue anyone for using them. We also found it funny when some reacted to it by complaining that it wasn't done for "altruistic" reasons, but to help Tesla, because of course: that's the whole point. Musk recognized that patents frequently hold back and limit innovation, especially around core infrastructure. Since then, Musk has said that, in fact, rivals are making use of his patents, even as GM insists it's not.
However, as some may recall, when Musk made the original announcement, the terms of freeing up the patents were at least a little vague. It said that Tesla "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." That "in good faith" claim had a few scratching their heads, and pointing out that still gave Tesla an out. We were a little disappointed that the company didn't make the terms entirely clear, believing that the "in good faith" line would likely scare away some companies from actually using the patents. However, recently, at the Detroit Auto Show, when questioned about this, Musk clarified that he really meant to make them completely free for anyone to use, no questions asked, no licensing discussions needed:
Around the three-minute mark someone asks how many automakers have taken Tesla up on the offer to use its patents, and Musk notes:
Musk: We actually don't require any formal discussions. So they can just go ahead and use them.
Reporter: Is there a licensing process?
Musk: No. You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them.
In other words, Musk is saying what most of us assumed all along was the point. Hoarding the patents and blocking others doesn't help him at all. Letting others expand the market does. And licensing discussions are unnecessary friction and a waste of time.
All good, right?
Well, no. It appears that clueless Wall Street types are absolutely flipping out over this (possible registration wall). Some outfit called "Technology Equity Strategies," which doesn't seem to understand the first thing about how innovation actually works, posted an insanely long and ridiculously misguided note on how this is horrifying for anyone invested in Tesla. The descriptions are hilarious, where you can almost hear these Wall Street types pulling out their hair over this idea of *gasp* actually letting others use Tesla's patents. First, it notes that Musk called them "open source" patents, and spends way too much time detailing the "official" definition of open source, and then says that the patents are now "public domain" (apparently not recognizing that public domain and open source are not the same thing -- though in this case it might not matter). Technology Equity Strategies is very upset about this.
The restrictions in the June 12 blog of "good faith" and "we will not initiate" are over with. They are finished. These patents are either in the public domain, or they have at minimum been rendered unenforceable against all users, "good faith" or not.
Why? Because in their non-innovation minds, all they care about is how do you best value the stock, and giving up patents is giving up an asset. The note first (mistakenly) argues that many areas of the tech industry rely on patents as barriers to entry and that's where their advantage comes in (rather than execution, which is the truth). And so, it thinks now some other company will just come in and eat Tesla's lunch:
Is it possible that the massive capital and labor needed to attain leadership might not be eroded in by imitators in Asia, by large companies with resources to buy market share, by companies whose strengths are manufacturing process, global footprint and scale?
If so, the embedded option on a leader in a new niche in the auto industry and on a shift in the competitive dynamics in the auto industry might indeed be a valuable option.
But Mr. Musk was not interested in that. He is happy to give away the advantages that actually provide great profitability in some sectors of technology. He wants to compete as an auto company, in the brutal and capital intensive way that auto companies compete. More fundamentally, he is willing to eliminate the possibility in the future of competing as a technology company, which depend on the IP protections of patents, copyright, and trade secrets.
Of course, the reality is that Musk recognizes what many in this sector recognize: that sharing the ideas helps speed along innovation, creating greater and greater opportunities, which you can realize by executing well. Musk is confident in Tesla's ability to execute and (as we noted earlier) recognizes that sharing the patents actually helps Tesla by getting more electric vehicles on the market, meaning more overall infrastructure that makes Tesla cars more valuable.
This is the ridiculousness of Wall Street: sometimes it simply can't understand the nature of a non-zero sum game. Giving up any "advantage" is seen as helping others, without recognizing that helping others can also help you out tremendously. Instead, these investor types believe in the myth of intellectual property, that it's patents that make a company valuable:
Intellectual property is an important foundation for valuation technology companies. Funds that own Tesla may not be the same institutions who own GM or Ford, but many will be familiar with Qualcomm and ARM.
IP goes a long way in explaining why Qualcomm has a market cap of $110 billion, and ARM has a valuation of 23 billion (18x trailing revenues) while Nokia and Dell were sold for less than two times revenues. Nokia and Dell did fine work for a while as manufacturers and product companies. There was a time when they too looked like winners based on product execution. But they didn't own core IP, and so when product cycles shifted, they were left with little value.
Yes, ARM and Qualcomm are both patent-focused companies (that dip their toes into trolling all too often). And, yes, companies that don't execute well can lose out in the end, but cherry picking a few companies that have flopped on execution, while pointing to a few trollish companies as success stories, doesn't make a very strong argument. It's basically saying "yes, invest in the companies that don't believe in their own ability to execute, who have a fallback as a patent troll." That's not exactly a strong endorsement. Tesla believes in its own ability to innovate -- and these Wall Street guys think that's a bad thing.
And then there's the rewriting of history:
Let's look at Apple. Apple and Steve Jobs learned the hard way. Some of us will recall that an early Apple (believing that IP wasn't important) opened up its IP to the basic Mac interface with a royalty free license to Microsoft.
This resulted in Microsoft Windows taking nearly the entire PC market from Apple, and nearly bankrupting Apple. In his second chance, Steve Jobs learned about the importance of IP. This is a lesson that Mr. Musk failed to absorb.
Except, that's totally incorrect. While Apple had licensed a few aspects of its UI, that licensing agreement became meaningless by the time of Windows 2.0. Then Apple sued Microsoft and lost, because it was trying to use copyright law to claim things that could not be covered by copyright law. And that's not why the PC took over the market. So this isn't a lesson that Musk failed to absorb, because it never happened.
The Grand Gesture shows the worrisome sincerity in Musk's repeated statements that he is primarily on a mission to get other companies to sell a lot of electric vehicles, not to make money.
A worrisome sincerity? No, it's showing that Musk recognizes that if the market for electric vehicles does not grow massively, then he won't make money. He very much wants to make money, and a good way to do that is to build out the overall market for EVs, allowing Tesla to thrive. And these Wall Street folks first mock the idea that Musk might first invest to grow the market, by then... claiming that Asian makers might do the same thing:
No doubt Mr. Musk believes that if the industry embraces EVs, then Tesla will succeed as part of it. But is this plausible, that everything will just work out for the best. Is it plausible that Musk can succeed as a manufacturer in the U.S. competing against manufacturers in Asia who may take zero margins to grow a business, using Musk's proven designs? U.S. companies have learned over and over that IP is necessary to get a sustained profitable return on their innovations.
Actually, no. Plenty of tech companies don't think that IP is "necessary" to get sustained returns -- they think the opposite. Patents get in the way of profitability. They require lots of lawyer time and threats of lawsuits.
Frankly, Tesla opening up its patents seems like a move that shows how confident it is in its execution abilities, and makes the company a lot less likely to rest on its laurels and become nothing but a "licensing" company down the road. The fact that people who don't understand what a mess patents are and how they slow down innovation are now jumping in making ridiculous claims like Tesla's decision is why Apple can now jump into the EV car market just shows how little some people understand patents. The "myth" of patents as a powerful tool of innovation is still out there, and that's a shame.
Back in 2011, we wrote about the fascinating culture of "shanzhai" production -- Chinese companies manufacturing counterfeit goods that ignore intellectual monopolies like patents. The post drew on insights from the open hardware hacker Andrew "bunnie" Huang, who has been following this world closely, drawing on his first-hand experiences of visiting and using shanzhai companies. In 2013, Huang gave the shanzhai approach to sharing -- like open source, but not quite -- a name: "gongkai". In a long and fascinating new post, he explains the background to the term:
["Gongkai"] is deliberately not the Chinese word for "Open Source", because that word (kaiyuan) refers to openness in a Western-style IP framework, which this not. Gongkai is more a reference to the fact that copyrighted documents, sometimes labeled "confidential" and "proprietary", are made known to the public and shared overtly, but not necessarily according to the letter of the law. However, this copying isn't a one-way flow of value, as it would be in the case of copied movies or music. Rather, these documents are the knowledge base needed to build a phone using the copyright owner's chips, and as such, this sharing of documents helps to promote the sales of their chips. There is ultimately, if you will, a quid-pro-quo between the copyright holders and the copiers.
This contrasts with the Western approach, where explicit permission to use every patented invention or extract of copyright material must be obtained in advance before progressing further. The resulting "patent thickets" and copyright analogs are a growing problem for complex digital products that depend on multiple technologies built out of small incremental advances, most of which are patented, and which therefore require separate licenses and negotiations. The more flexible gongkai approach offers an interesting alternative. Huang goes on to explore the important differences between what he calls "this fuzzy, gray relationship between companies and entrepreneurs" and the way things work with the Western system:
The West has a "broadcast" view of IP and ownership: good ideas and innovation are credited to a clearly specified set of authors or inventors, and society pays them a royalty for their initiative and good works. China has a "network" view of IP and ownership: the far-sight necessary to create good ideas and innovations is attained by standing on the shoulders of others, and as such there is a network of people who trade these ideas as favors among each other. In a system with such a loose attitude toward IP, sharing with the network is necessary as tomorrow it could be your friend standing on your shoulders, and you’ll be looking to them for favors. This is unlike the West, where rule of law enables IP to be amassed over a long period of time, creating impenetrable monopoly positions. It's good for the guys on top, but tough for the upstarts.
This "network IP" results in an elevated rate of product innovation:
Chinese entrepreneurs ... churn out new phones at an almost alarming pace. Phone models change on a seasonal basis. Entrepreneurs experiment all the time, integrating whacky features into phones, such as cigarette lighters, extra-large battery packs (that can be used to charge another phone), huge buttons (for the visually impaired), reduced buttons (to give to children as emergency-call phones), watch form factors, and so forth. This is enabled because very small teams of engineers can obtain complete design packages for working phones -- case, board, and firmware -- allowing them to fork the design and focus only on the pieces they really care about.
The fact that many of those products fail, or are "whacky", misses the key point here: that the gongkai system, with its low barriers to entry, allows experimentation and improvement to be iterated so rapidly that bad ideas fall quickly by the wayside, to be replaced by better ones, until a winning combination is achieved. As patent thickets and copyright maximalism tie up Western companies in fruitless and debilitating legal battles, the shanzhai companies and their nimble gongkai culture may soon emerge as the true heirs of the innovative startups that created Silicon Valley and the Internet before intellectual monopolies started to throttle both.
Back in June we wrote about Google's "End-to-End" project to enable full (real) end-to-end encryption in email via a Chrome extension. For years now, we've been among those arguing that Google should actually offer end-to-end encryption by default (which would make the company unable to read your emails). This isn't going that far, but making it much easier for individuals to truly encrypt their own emails (without any backdoors for the email provider) is definitely a big step forward. So it's good to see that the company has now moved the project to GitHub, and that Yahoo's Chief Security Officer, Alex Stamos, has been contributing to the project as well. Having two of the biggest webmail providers working together on an open source system for better encrypting emails end-to-end is a huge win for privacy and security. The project is still in its early days, and Google warns that it's not yet ready to release the extension in the Chrome Web Store, but it's great that things are moving forward. Of course, for those of you who can't wait, there already some extensions like Mailvelope that are pretty easy to use (though, some worry are not quite as secure as other options).
One of most important ways of helping to promote open access is for major research organizations to make it a condition of their funding. Two of the pioneers in this respect were the Wellcome Foundation and the Howard Hughes Medical Institute, which made open access a requirement in 2006 and 2007, respectively. Here's another major funder joining the open access club:
The Bill & Melinda Gates Foundation is committed to information sharing and transparency. We believe that published research resulting from our funding should be promptly and broadly disseminated. We have adopted an Open Access policy that enables the unrestricted access and reuse of all peer-reviewed published research funded, in whole or in part, by the foundation, including any underlying data sets.
Specifically, the CC-BY license, one of the most open, has been adopted:
All publications shall be published under the Creative Commons Attribution 4.0 Generic License (CC BY 4.0) or an equivalent license. This will permit all users of the publication to copy and redistribute the material in any medium or format and transform and build upon the material, including for any purpose (including commercial) without further permission or fees being required.
Now, this is the Bill & Melinda Gates Foundation making this announcement, not Bill Gates, but it's hard to believe he doesn't know about and approve of the move. After all, it represents a very high-profile boost for the idea that making things freely available for anyone to "transform and build upon" is better than locking things up so that neither of those is possible. So the natural question is: when will Gates admit the same is true for software too?
Alongside the disturbing revelations of indiscriminate, global surveillance carried out by the NSA and its Five Eyes friends, leaked documents have shown another side of modern spying: the high-tech gadgets created for the NSA's Tailored Access Operations group, discussed by Techdirt at the end of last year. As its name suggests, these are targeted operations, and with many of the serious concerns about the use of blanket surveillance removed, it is hard not to be impressed by the ingenuity of the devices. Of course, a natural question is: could the rest of us have them too? According to a detailed and fascinating article in Vice's Motherboard, the answer turns out to be "yes".
The report discusses the work of Michael Ossmann, a long-time hardware hacker. Unlike most people, he was not surprised by many of the NSA spying devices found in a 48-page catalog from the Advanced Network Technology (ANT) division, revealed by the German news magazine Der Spiegel:
Most of the document was fun for Ossmann, rather than actually revelatory. “We" -- as in the global community of radio hackers -- "already knew how to build most of this stuff,” he told me recently.
But the ANT toolkit also included another more unusual class of devices known as "radio frequency retroreflectors.” With names like NIGHTWATCH, RAGEMASTER, and SURLYSPAWN, these devices were designed to give NSA agents "the means to collect signals that otherwise would not be collectable, or would be extremely difficult to collect and process."
These devices work by reflecting back radio signals beamed at the target systems containing them. Suitable designs allow information to be transmitted to surveillance teams without the need for on-board power supplies. This means that they can be extremely small -- fitting inside a USB plug, for example. Inspired by the ANT catalog, Ossmann and a group of like-minded hackers set about creating a collection of surveillance gadgets they called the NSA Playset:
Every tool in the NSA Playset has been designed on top of open-source hardware and software so that anyone can build their own, often in no more than a few hours. Over a dozen engineers are involved in the project, Ossmann said, but anyone is invited to join and contribute their own device. The first requirement: a silly name riffing on the original NSA codename. "For example, if your project is similar to FOXACID, maybe you could call it COYOTEMETH," says the NSA Playset website. (A separate website, NSA Name Generator, is designed to help.)
As well as being open, the NSA Playset is also very low cost:
One device, dubbed TWILIGHTVEGETABLE, is a knock off of an NSA-built GSM cell phone that's designed to sniff and monitor internet traffic. The ANT catalog lists it for $15,000; the NSA Playset researchers built one using a USB flash drive, a cheap SDR [software-defined radio], and an antenna, for about $50. The most expensive device, a drone that spies on WiFi traffic called PORCUPINEMASQUERADE, costs about $600 to assemble. At Defcon, a complete NSA Playset toolkit was auctioned by the EFF for $2,250.
The article goes on to explore some of the implications of making these advanced surveillance technologies available so cheaply. As well as the obvious use for research purposes -- for example, coming up with countermeasures -- there's another interesting aspect:
the work Ossmann is doing is helping many of the government's engineers resolve a catch-22 that's emerged in the wake of the Snowden revelations: government security researchers who didn't have access to the ANT catalog when it was classified aren't legally permitted to read it or transmit it now, even though everyone else can. Arguably, that leaves the public sector at a disadvantage next to the private sector -- or to spies in, say, Beijing or Moscow.
Amongst other things, the NSA Playset is a great example of how hackers are doing the authorities a big service, by helping government experts get around stupid rules introduced without thinking through the negative consequences they would have for national security and thus public safety.
Crowdfunding wallet designs and various gadgets may be fun and bring about some innovative products that might not normally get funding, but a lot of popular crowdfunding campaigns are relatively straightforward development projects and shouldn't be all that risky for backers. Crowdfunding actual scientific ventures adds a bit more risk for backers because no one can really say how an experiment will turn out -- unless the experiment has been done before. Adding to the challenge for scientific crowdfunding is the jargon and scientific understanding necessary for a backer to know what a particular project is actually trying to do. If you want to support some science, here are just a few science-related projects to check out.
