During the last stages of imperial Russia, in the days leading up to the Russian Revolution, a supposedly holy man attained a role as a trusted advisor to the family of Tsar Nicholas II. Many people in the Russian elite at that time believed that Grigori Yefimovich Rasputin was a holy man and a healer; many others thought he was a religious charlatan. The subject of an assassination attempt by those who disfavored his political influence, Rasputin turned out to be more legend than substance and his only lasting influence on today’s society is an absurdist caricature of the man in the movie Anastasia, which this writer believes to be the greatest animated musical of the 1990s.
Elon Musk may not have a wisecracking bat voiced by Hank Azaria as his sidekick, yet in many ways he resembles the historical figure who was murdered by Russian nobles in 1916. Musk is seen by many as a visionary who is bringing us to a new future of alternative energy, driverless cars, space travel and underground public transit. Musk could probably offer to sell world peace and still raise hundreds of millions of dollars from shareholders despite missing his own deadlines and breaking promises. How many other CEOs can berate their shareholders in an investor call, continue to miss production goals and then win a vote of confidence from shareholders just a few short months later? Musk, like Rasputin, does not die easy. His success defies explanation, and his stock price is the very definition of irrational exuberance.
Musk also continues to be exposed by news headlines. Twice Musk has delayed his own deadline to reach the 5,000-per-week production goal he has set for Tesla’s Model 3. He’s broken promises not only to his shareholders but also his workforce, 9 percent of which he recently laid off in an attempt to make Tesla into a profitable company. At the time of this writing, Tesla shares were in the $310 price range despite predictions from major investment bank Goldman Sachs that Tesla may need to raise up to $10 billion in capital over the next two years to remain in operation. In late July, The Wall Street Journal reported that Musk asked some of Tesla’s suppliers to refund payments made by the company going back to 2016 in order for Tesla to reach profitability. This news caused a major surge in Tesla credit-default swaps, which now indicate that the company has a 42 percent chance of missing a debt payment in the next five years. Forget meeting production deadlines, Tesla might not have enough cash to keep its doors open within a few short years. Somehow it just doesn’t matter. It is almost as if the more Musk fails the greater his legend grows, and for reasons that make little sense the higher his stock price soars.
In the world of intellectual property, Musk has shown a similar penchant for dishonesty. In a June 2014 blog post on Tesla’s website, Musk claimed that he has avoided patents ever since he left he left Zip2, his first business venture. Just to remind our readers of this fallacy presented by Musk, which remains unchanged on the Tesla blog:
“When I started out with my first company, Zip2, I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors. After Zip2, when I realized that receiving a patent really just meant that you bought a lottery ticket to a lawsuit, I avoided them whenever possible.”
Recent news reports indicate that Tesla has bought itself yet another lottery ticket to a lawsuit, and has once again not avoided patents as its CEO proclaims is his alleged preference.
The U.S. Patent and Trademark Office recently published a patent application filed by Tesla. U.S. Patent Application No. 20180162199, titled Infotainment System With Air-Vent Control, covers an air vent assembly for a heating, ventilation and air conditioning (HVAC), the assembly comprising a cover member having an inlet allowing a flow of air to enter the cover member and a vent extending from the inlet towards a fore side of the cover member, the vent having a first and second vent portions having different sets of flow guiding vanes which are independently movable with respect to each other with the use of an actuating mechanism operatively coupled to the vanes. The claimed invention provides an air vent assembly through an infotainment system with improved control which reduces the amount of dashboard space taken up by the assembly.
No, Musk isn’t named as an inventor on the patent, but if he truly is the CEO of Tesla, then he would have a say over the company’s research and development activities. If he really thought that patents are just lottery tickets to a lawsuit, he wouldn’t spend money filing patent applications; he would simply have the research published online for the whole world to see. Instead, this is yet another example of Musk’s hypocrisy on patents which continues to grow at both Tesla and its subsidiary SolarCity.
And for those Musk fans who will inevitably, and incorrectly, say that Tesla seeks patents so competitors cannot obtain patents and block the company, that is simply not how the patent system works. Yes, that is what Musk has said, but that is only further proof of his say-anything approach to business. In a first to file patent system, like the United States, all one has to do is publish or otherwise disclose an innovation in order to prevent anyone from obtaining a patent ever. If the disclosure occurs prior to the filing of a patent application the competitor simply could not obtain a patent, period. So, the only reason to obtain a patent is to obtain exclusive, proprietary rights.
Of course, facts will not matter to Musk fans. They will convince themselves that Musk avoids patents despite the fact that Tesla clearly obtains patents whenever possible.
The idea that Musk could be a CEO who is out of touch with the day-to-day operations of his company is not inconceivable given his company’s inability to meet his own production deadlines. But the truth of Elon Musk’s absolute unwillingness to tell the truth about his views on intellectual property is laid bare by U.S. Patent No. 8579635, titled Funnel Shaped Charge Inlet and listing Musk as lead inventor. The patent was issued in November 2013, nearly 15 years after Musk left Zip2 and less than a year before Musk would proclaim to the world that he has avoided patents since leaving Zip2. It can’t be any more clear: Musk’s position on patent is dishonest.
And yet, despite broken promise after broken promise, which continue to be ignored by Wall Street, this Alfred E. Neuman of Silicon Valley continues to be the beneficiary of government contracts. Recently, Chicago mayor Rahm Emanuel announced that Musk’s Boring Company had been selected to build an underground transit system connecting O’Hare International Airport to downtown Chicago. Musk even offered to shoulder 100 percent of the financial burden, which is interesting given his ability to build billions in personal net worth through government subsidy.
“Ah, but he’s a visionary.” “He’s a miracle worker.” “He can see the future.” “His words don’t meet his actions, but he’s a powerful man who must be respected.” Do these statements describe the early 20th century figure of Rasputin, or the current day South African-born Silicon Valley magnate? Or does the difference not even matter? Only time will tell.
Image Source: Deposit Photos.