Tesla Motors and the Rise of Non-ICT Patent Pledges

Guest Post by Professor Jorge L. Contreras, Associate Professor of Law at American University Washington College of Law.

This week, electric car developer Tesla Motors made news by publicly announcing that it will no longer “initiate patent lawsuits against anyone who, in good faith, wants to use our technology”. Tesla’s pledge has met with both praise and cynicism, with some applauding the company’s ostensible desire to spur the development of eco-friendly technology, while others have dismissed the announcement as a mere publicity stunt lacking in real effect.

Whatever the merits of Tesla’s patent pledge, it is only the most recent in a growing series of voluntary public commitments made by patent holders to refrain from exercising their patent rights to the fullest extent of the law. To date, most of these pledges have been made by companies in the information and communications technology (ICT) sector. For example, in 2004-05, a handful of firms publicly announced that they would not assert patents against use of the open source Linux operating system. Some large patent holders have issued blanket assurances covering substantial portfolios of patents and products, including IBM’s public commitment not to assert approximately 500 patents against open source software products, and Google’s more recent “Open Patent Non-Assertion Pledge“. As I have written elsewhere, these pledges are intended to assure the market that the pledged patents will not be used to disrupt or hinder the adoption of market-wide interoperability standards or open technology platforms.

But, as the Tesla pledge demonstrates, patent pledges are also becoming popular outside the ICT sector. Below are examples of a few recent patent pledges made by companies in non-ICT industries ranging from GM seeds to household electrical meters.

Company Patents Pledge
Monsanto Patents claiming genetically-modified seeds “It has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seed or traits are present in farmer’s fields as a result of inadvertent means.”
Myriad Genetics Genetic diagnostic patents Myriad will not “impede non-commercial, academic research that uses patented technology licensed or owned by us… Myriad will continue its practice of not interfering with laboratories conducting genetic testing on patients for the purpose of confirming a test result provided by Myriad.. Myriad will continue to offer financial assistance programs and free testing to help patients with the greatest need..”
Southern California Edison US 11/626,810 (Method of communicating between a utility and its customer locations) SoCal Ed will grant anyone a non-exclusive royalty-free license under any patent issuing from this application covering basic “smart metering” technology.
Tesla Motors All patents Tesla will not “initiate patent lawsuits against anyone who, in good faith, wants to use our technology”

 

The full text of (and hyperlinks to) these commitments, as well as patent pledges from many companies in the ICT sector, can be found in the Non-SDO patent pledge database maintained by the Program on Information Justice and Intellectual Property (PIJIP) at American University’s Washington College of Law. As always, we welcome additional contributions to the database.

20 thoughts on “Tesla Motors and the Rise of Non-ICT Patent Pledges

  1. A countervailing view:

    A letter from James Dyson to the editor of the Wall Street Journal.

    Patents are Fair and Protect Innovators

    Patent are put in place to allow the patentee to recoup his time, expenses,
    creativity and risk

    Elon Musk’s move to open source Tesla’s patents (“Tesla Releases Its Patents to Rivals,” Marketplace, June 13) may be a necessary step for the electric-car industry, which could benefit from a jump start, but in many ways it is a step backward for the talented engineers he aims to attract and motivate. Patents are put in place to allow the patentee to recoup his time, expenses, creativity and risk. When patents are upheld, vulture companies are forced to develop their own ideas. The result is real choice for consumers. Remove that barrier, and these companies are able to copy successful commercial products developed by others.

    We are taught in school that copying the work of another is cheating. Yet some courts believe encouraging copycat companies spurs competition. This view is shortsighted. Intellectual property is enshrined in law to protect those who have created it, at least for a limited time. If patents are offered up to competitors, why would they bother to invest in developing new technology? They will merely wait until the creator company has taken the massive risk for them, invested to make a product a commercial success and only then climb aboard the bandwagon. This doesn’t breed a competitive marketplace-it creates knockoffs from which the world’s most talented engineers will surely shy away.

    James Dyson
    Founder and Chief Engineer Dyson
    Malmesbury, England

  2. ““It has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seed or traits are present in farmer’s fields as a result of inadvertent means.””

    Well that is good to hear.

    1. LOL – read that quote in the context of the case in which it appeared – its meaning is far more limited than what is being implied here.

  3. link to en.wikipedia.org

    The story of the IBM PC is remarkable. The only thing unique to the IBM PC was its BIOS. That was functionally copied using clean room techniques, and, in addition, MS Dos became the universal OS. Soon, IBM was following, not leading.

    Had it enforced its patents rather than licensing them, the story might have been different.

    1. Does anyone want to ask why IBM chose to license its patents instead of use them against competitors?

  4. Back in its early years, Seagate had somewhat the same philosophy as expressed by Tesla — it didn’t enforce it patents. Instead it gave away its technology in order that its rivals standardize on Seagate designs, from heads to disks and to disk drive design. Seagate was largely successful in achieving common disk drive designs as the ST506 and ST412 interfaces because industry standard.

    The whole objective here was to lower costs of making a disc drive, which at the time was very expensive. As well, by introducing designs that others had to adopt, Seagate stayed ahead of the market.

    I think Tesla is adopting the same approach.

    1. The whole objective here was to lower costs of making a disc drive

      Note that these sorts of practical considerations which indirectly benefit consumers are completely alien to that class of entities which exists solely to “monetize” patents.

  5. Pledges like this do not form a binding agreement and are therefore not enforceable. These pledges are merely a public announcement stating the company’s current intention, which may change in the future. For example, it is possible that some of the companies will later become litigious once its technology is widely adopted. The company’s patents would still be enforceable, regardless of any public statement regarding its non-enforcement.

    1. Anon, I am sure if GM or BMW, for example, came knocking with a patent of their own, that Tesla would reserve the right to countersue GM in order to level the playing field.

    1. Perhaps there are none for SpaceX. I can’t locate any tagged with Elon Musk or SpaceX. According to his comments he’s changed his opinion on how patents should be used since his Zip2 days. It would not come as any surprise that there are no patents pending or assigned to SpaceX

      1. Yes, you appear to be correct. According to this ( link to uspto.gov ) he prefers to rely upon trade secret protection for SpaceX. Perhaps he’ll be dedicating those trade secrets to the public — or not?

    1. Different anon, nay, you are misapplying the Jane reference as pertains to patent activities.

      If one with a patent wants to do whatever with it – including donating to the public (btw, NOT what Elon actually did), or even pull a marketing stunt and dedicate his property to “Fair Use” or “Good Faith,” then more power to him.

      It is when you attempt to co-opt others’ property and their ability to enjoy the Quid Pro Quo of the patent system and the intellectual property thus created do we venture into the Jane zone.

    2. Donating it to the public is pretty easy… put it on sale and don’t ask for a patent…

      Well, at least before the first-to-file system. Now donating one’s inventions to the public is much more complicated, isn’t it?

      1. Donating it to the public is pretty easy… put it on sale and don’t ask for a patent… Well, at least before the first-to-file system. Now donating one’s inventions to the public is much more complicated, isn’t it?

        How so? If you’re the first to invent something, it’s still pretty easy to create a bar for everyone else. In some respects, it’s even easier, since a late filer can’t swear behind your disclosure.

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