Richard Branson on Why Patents Kill Innovation

Business.com / Strategy / Last Modified: February 22, 2017

Patents stifle innovation- according to entrepreneur Richard Branson. Reflecting on Musk's recent decision, he explains why patents kill...

Richard Branson knows a thing or two about breaking barriers. At just 16, he began his first business, a magazine called The Student, from which he launched another business, Virgin, just a few years later. Frustrated with the high prices of records, the 20-year-old Branson sold records by mail at reduced prices, a move that would lead him to disrupt the entire music industry. This same spirit has made him one of the world's most well-known billionaires, and an advocate for the entrepreneurial spirit.

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In a recent blog post, Branson took a stand against restrictive patent laws, citing Elon Musk's ground-breaking decision to allow other electric car makers to use Tesla's cutting-edge technology in order to help the industry grow and flourish. Originally created in order to keep innovators safe from copy-cats, patents can sometimes be more of a curse than a blessing. Established to "exclude others from making, using, offering for sale, or selling" a company or individual's invention, Branson argues that patent laws stop brilliant ideas dead in their tracks (Tweet This!)

Branson says that companies like Tesla, which make electric cars, are changing the world for good, but they can't do it alone. "As it stands, it is impossible for Tesla to build electric cars fast enough to make a major positive impact upon carbon emissions," he notes. So instead of monopolizing the market and keeping innovation at bay with patents, Musk is encouraging other innovators to utilize Tesla's technology and effectively join a movement towards more sustainable transportation.

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Breaking down patent law boundaries in other industries is just as important, Branson says, "if we are to use business as a force for good, then we should welcome competition and relax fixation on intellectual property." Likewise, Musk asserts that it's not the intellectual property that determines a "winner," but a given company's ability to "attract and motivate the world's most talented engineers."

Both of these revolutionary businessmen agree that removing stringent patent laws from the equation also encourages some healthy competition, which, Branson argues, keeps everyone on top of their game. Indeed, when Branson began his initial foray into music, he was intent on changing the industry for the better. The same can be said of Musk's aspirations for the automotive industry.

In his blog post from June 12, 2014, Musk explains that the patents once thought to protect Tesla have done so from a non-existent, though perceived threat. "The unfortunate reality is [that] electric car programs...at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales," he said. The assumption that a major car company could use Tesla's technology to overwhelm their success was an understandable one, but the reality is that the demand for these vehicles exists, yet few manufacturers are doing anything about it.

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Most recently, Tesla announced their newest addition to their line-up of vehicles, the Model 3. With a price tag of around $30,000 as opposed to the Model S's $70,000 sticker, Tesla is getting closer to bringing their electric vehicles mass market. Still, there's a way to go, but hopefully their landmark patent decision will help get more drivers behind the wheel of an electronic vehicle in years to come. Even so, Musk's revolutionary move has paved the way for less bureaucracy and more innovation, entrepreneurial spirit, and continued evolution for the good of all.

Illustration based on a photo by David Shankbone. The original photos is licensed under the Attribution 3.0 license, which means it can be used and modified for any purpose only if the author is properly credited where it is used.

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