Tesla Cars, Space Technology, and BitTorrent: Why Monopolies Suck

This week's most exciting news in technology was undoubtedly that Tesla Cars declares that all their patent monopolies are free for anyone to use. What does it mean? Let's compare to BitTorrent.


When Bram Cohen created the BitTorrent protocol, he had the legal option of filing for a patent monopoly on any computer program that used this protocol. (The mere existence of such an option is a very bad thing, but we’ll be returning to that.) Mr. Cohen chose to not monopolize the BitTorrent protocol in that way. Let’s examine what implications that would have had for the technology.


If the BitTorrent technology would have been protected by patent monopolies, it would have been effectively limited to Mr. Cohen’s original BitTorrent client. Have you used that client? Do you know anybody who has used it? Didn’t think so, and neither do I. Instead, there is an enormous plethora of clients and servers that use the protocol today, and Mr. Cohen’s BitTorrent Inc. is valued at eight-digit dollars. Not to mention the fact that BitTorrent Inc. was subsequently able to buy one of the most prolific BitTorrent clients out there, µTorrent, which would not have existed had the technology been monopolized in the first place. I think most of us have used µTorrent – I know I have.


This shows exactly why it makes so much sense for Tesla Cars to release all of their patent monopolies into the wild, and why the patent monopoly system as such is enormously harmful (the only industry to make a net profit from it is the pharma industry, and that’s because they’re heavily subsidized with taxpayer money). Tesla Cars relinquishing their monopolies means they see this mechanism, and that they realize they need an ecosystem to flourish around their technology – the electric car technology – in order to remain viable themselves. Put another way, it’s not about the size of the pie slice: monopolies are preventing the pie itself from growing exponentially, as they do with any new technology poised to disrupt the old ways.


Just like BitTorrent.


Patent monopolies are far worse than the copyright monopolies we deal with (and all break) on a daily basis. Imagine for a moment if copyright monopoly vultures didn’t care if you had made an actual copy, that you would be just as guilty of infringement even if you had never seen or heard of the original? That’s how patent monopolies work, and that’s the key difference between patent monopolies and copyright monopolies: the latter protect a specific expression against copying, the former protect an idea or a form from being utilized anywhere, even independently. It’s also why patent monopolies are much, much more harmful than copyright monopolies (and that’s saying a lot).


But as the Tesla example shows, patent monopolies don’t stop at not making sense as a whole. They also don’t make sense to a single company in isolation, as they prevent an ecosystem taking shape. It’s one of the worst cancers in the economy, as investors describe them today.


It’s easy to argue that patent monopolies don’t hit ordinary families in the same way that copyright monopolies, that patent monopolies have not sued families out of their homes merely for taking part in society’s culture. But that’s about to change with 3D printing, where rapid fabrication becomes available to the masses. It is – unfortunately – a safe prediction that people will soon be sued out of their homes merely for manufacturing their own pair of slippers, because it violated a design patent monopoly somewhere. Such a notion may seem ridiculous today. Then again, so did everything else we’ve seen with the copyright monopoly so far, and patent monopolies are guarded far more harshly.


The BitTorrent legacy doesn’t just show us how to break the copyright monopoly in a specific case. It gives us a blueprint for how to disrupt old ways in general by ditching legal monopolies, a blueprint that Tesla Cars is now choosing to follow.


The patent monopoly wars are coming, right on the heels of the copyright monopoly wars, as were they merely a logical extension. That’s why it’s so encouraging to see our tip-of-the-spear entrepreneurs denouncing and releasing their own monopolies right ahead of these battles with corporate lawyers.


As a final note, it’s noteworthy that Tesla Cars isn’t the only company that Elon Musk is running. He’s also at the helm of SpaceX. Space technology has been ridiculously proprietary up until now, nothing cooperating with anything else and everything being custom-built single-use. That’s why it makes me enormously excited to see an entrepreneur who understands the damages of monopolies at the forefront of space technology today.


It holds a promise of standardized, interoperable space technology. As in, “for all of us”. Like BitTorrent.