Tesla’s Patents are Your Patents

Tesla Motors has notified has granted a public and free license to its patent to anyone who uses their technology “in good faith.”:

Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

http://www.teslamotors.com/blog/all-our-patent-are-belong-you

The idea is partially a philosophical bent, but it is also business – Tesla feels that it needs real competitors in the zero-emission auto market in order to truly grow the market.

Christian Hicks, Co-Founder of Elysium Digital sent the following note regarding the likelihood that Tesla’s patents have already served their purpose for Tesla in its early-stage development:

No matter what, Tesla has benefitted from its patent program, because it prevented others from claiming what Tesla patented and used. At the same time, Tesla’s patents may very well have been valuable back when they were raising VC money, but they are obviously past that now.

Interesting perspectives.

70 thoughts on “Tesla’s Patents are Your Patents

  1. At link to teslamotors.com there is an apparent altar being built to Elon Muck [sic] of Tesla Motors that clamors applause for his patent liberation efforts.

    Slipped into the Elon lovefest comment stream is a particular quote of considerable interest.

    Let the future tell the truth, and evaluate each one according to his work and accomplishments. The present is theirs; the future, for which I have really worked, is mine.

    — Nikola Tesla (1856-1943)

    Two great messages here:

    Evaluate [and give to] each one NOT according to their need, but to their work and accomplishments – in striking contrast to what many of the lovefest seem to be clamoring for (and is emblematic of one of the philosophies that loves to attack the patent system).

    [the real Tesla] has really worked [through invention] for the future, and therein is the truth. A patent is a promise – for the consideration of sharing the invention – a guarantee for a particular exclusivity for a limited time stretching into the future. It is not “an entitlement” as some have tried to mislead, as an entitlement does not ask for consideration, a quo for the promised quid.

    1. The anti-patent crowd is making a lot of hay over this one. But, again, this is coming from a company that is flush with free money from the fed.

      1. And check out the CEO’s “understanding” of how new innovation should invalidate your own prior patents… (yes, he really said that!): see below at 12.1.1.1.1.6

        1. Undoubtedly he meant “made obsolete” [since he is not a patent attorney].
          Many patents do become rapidly obsolete, especially where an entire technology becomes rapidly obsolete. E.g., the huge and previously very valuable patent portfolios of EK and Fuji Photo on improved photographic film materials, patents on automobile carburetors, etc.. The obsolescence rate is evidenced by the large numbers of patents left to expire early because their maintenance fees were not paid.
          Of course some basic or pioneer patents with good claims will apply to later improvements. But considering how long R&D and patenting has been done on electric cars from long before Tesla Motors, it may not be surprising that I have not seen any reports of fundamental or pioneer inventions in its applied technology? Has anyone else?

  2. Would a court looking at this blog post consider this a true license? And what is “good faith” anyway.

    Would you advise your client to deliberately use a Tesla patent, based on this? Because I would not.

    1. Well, not the blog post, but the press release, yes, it is a license. Tesla should be estopped from bringing any action.

      1. A license for what exactly, J?

        Does that license define the essential terms? Are you sure Tesla should be stopped from bring any action, or just those actions not against “good faith?”

  3. This really comes down to doing something about the lack of infrastructure to support electric vehicles in the US. Tesla needs a critical mass of participants in the marketplace in order to induce (for example) gas station owners to start providing battery-swap or quick-charge services across the nation. Part of this is encouraging a standardized way to perform battery swaps or quick-charge batteries, to avoid balkanization of the technology (so that you don’t have to look for a “GM-supported” charging station or some such). Allowing other market participants to use Tesla’s technology means that Tesla’s standards will likely become *the* standards.

    1. I disagree. Gas stations will provide charging stations or what ever when there is a critical mass of vehicles that want to be charged. There is no reason those cant be Teslas. Elon is under a lot of stress, trying to run too many companies on the bleeding edge and has gone off the deep end…

      1. Well, I can tell you that even once Tesla comes out with their $35k car (which is a bit more in my price range than their previous vehicles) I probably won’t be interested unless I can charge up or swap out almost anywhere in the country (and not just in my garage or during my commute). And that’s likely to be the case for a lot of the potential market, because with a gas vehicle, you can pretty much assume that there’s a gas station around somewhere.

        Without enough charging stations, people won’t buy the vehicles. And without people buying the vehicles, other people won’t set up the charging stations. It’s a chicken-and-egg problem, and Musk considers that enforcing Tesla’s patents would serve as a hindrance to solving that problem.

        1. Well, he spends a lot of time bragging about how many Super Charger stations he has already set up. And, if that were the issue, then he could have just released patents related to charging. There’s no need to release the whole portfolio, which I assume covers other aspects.

          Anyway… I’m not crazy about the swapping idea. I don’t wanna swap my brand new battery pack for someone else’s 5 year old pack…

          1. “There’s no need to release the whole portfolio, which I assume covers other aspects.”

            Except for the part about him wanting to increase the overall number of elec vehicles to boost the rate of independent creation of charging stations. And before you continue telling us that there is no reason all the elec vehicles can’t be teslas, yes, actually there is a set amount of production he can accomplish with just his capital/production capabilities in a given time. Not to mention that the teslas may not appeal to all market segments (due to o, price, style, etc).

            This really isn’t that hard to grasp les. He made exactly the right move to accomplish what he wants to accomplish. Specifically, adoption of more electric vehicles, faster.

            1. “Except for the part about him wanting to increase the overall number of elec vehicles to boost the rate of independent creation of charging stations. And before you continue telling us that there is no reason all the elec vehicles can’t be teslas, yes, actually there is a set amount of production he can accomplish with just his capital/production capabilities in a given time. Not to mention that the teslas may not appeal to all market segments (due to o, price, style, etc). ”

              Nonsense. No one else has facilities to make the extra volume you allege he thinks is needed either. If more factories need to be built, as I banker, I would rather loan money to the guy that has been successfully making these kinds of cars (and has the patents) for years, that I would to someone who only knows internal combustion and has to get copies of someone else’s patents to learn how to make them.

            2. Les, are you accusing Tesla of having patents that are not enabling! For shame! Everyone knows that one of ordinary skill could read those patents and perfectly replicate a Tesla vehicle!

            3. Alex,

              I think he was expressing a preference.

              And probably a sound one at that, as you know, patents are not engineering documents – nor are they meant to be.

            4. “No one else has facilities to make the extra volume you allege he thinks is needed either”

              Yeah we know, and that’s why he’s doing this.

              “If more factories need to be built, as I banker, I would rather loan money to the guy that has been successfully making these kinds of cars (and has the patents) for years, ”

              Well many factories I’m sure can be converted or already existing production lines can be ramped up.

              Again. He doesn’t necessarily want to have to do it all himself or have his company doing it all. He wants other market participants. He wants the whole thing to be entirely mainstream with everyone making them and everyone buying them. I really don’t see how this is so hard for you to understand. And, perhaps he isn’t thinking of only carmakers that need to borrow money or he is thinking of people that have different bankers than the ones you use.

              Maybe you’re also simply forgetting to keep in mind he did not make tesla to make a billion dollars or a big huge successful company. Or were simply ignorant of that. He made tesla to make electric cars more mainstream faster to help with pollution by creating sustainable transportation.

              “Tesla Motors was created to accelerate the advent of sustainable transport.”

              The slower elec cars are adopted, due to o say, patents or anything else, the worse in his view.

            5. Tesla is opening up its patents — even on its batteries and chargers — for fair use. In a conference call on Thursday announcing the move, CEO Elon Musk said he believes a company’s relying on patents is a sign of weakness: “It means they’re not innovating,” he said. “They’re not innovating fast enough. You should be innovating so fast that you’re invalidating your prior patents.

              How many LEGAL things are wrong with this statement?

              (Yes, 6 – LEGALLY wrong – not wrong because anon said so)

            6. “How many LEGAL things are wrong with this statement?”

              I don’t see any, but feel free to send him a letter! I’m sure he’ll be delighted to hear from our local OCPDer about how wrong he is.

    2. I agree with Les – to an extent.

      This does not seem to be a pure play for the “resource” of having stations. The well developed gas station network already developed alleviates much of that.

      Instead, this appears to be much more like the VHS/Beta format war. The link I posted earlier had this to say:

      More trouble for CCS standard, pay-per-use charging networks?
      Of course, this could also be bad news for the new Combined Charging System (CCS), which has been adopted by U.S. and German automakers but has been very slow to deploy. Today in the U.S., it remains far fewer than the CHAdeMO fast-charge systems (Nissan, Mitsubishi, Kia) that are relatively common on the West Coast and in some other electric-car hubs.

      It is typically thought that Beta was the better format, but lost for marketing reasons. Here too, marketing may be the driver (so brush away the rhetoric) and take a gander at just who is behind the curtain.

  4. Frankly, this sort of thing brings us one step closer to what the Lemleys of the world really want: an open source, patentless world. A world that smacks of Bolshevism. And in my opinion, in such a world the living would come to envy the dead. Without patents there can be no innovation and without innovation there is no life, just existence.

    1. Really? Seems like you are the actual Bolshevik advocate. What you’re saying is that Elon Musk shouldn’t get to decide what do to with his patent property.

      Musk isn’t saying no patents. He’s not even saying he won’t sue. It’s a very limited statement he makes. It’s not enforceable so it’s worth nothing until interpreted but mostly he’s saying he would not use his own patents to extract royalties from others who are trying to fairly move the industry forward. Doesn’t sound anti-patent or anti-competitive to me. Musk has a bigger picture, which he clearly states. He is competing against gas powered vehicle manufacturers and their lobbyists. He wants other electric vehicle investors to collaborate with him. Entirely competitive. Entirely capitalist. Entirely in his own and his shareholder’s interests.

      1. TJ,

        I think you misunderstood the conversation.

        What Elon wants to do with his patents is purely up to him (Him, in the corporate sense).

        But what he says about patents in general – or if he were to force his viewpoint on all others, well, then THAT would be a very real problem.

      2. Moderation filter REALLY NEEDS TO BE CHANGED.

        TJ,

        I think you misunderstood the conversation.

        What Elon wants to do with his patents is purely up to him (Him, in the corporate sense).

        But what he says about patents [typically] – or if he were to force his viewpoint on all others, well, then THAT would be a very real problem.

          1. It’s a blog post in quick reply.

            Did you have a problem understanding what I meant?

            Do you need me to quote Prof. Crouch on the approach here that he takes (hint: it is not the level you appear to want to have).

            Do you need me to explain the legal role that Elon operates in when he makes a statement – as the CEO, or do you just want to be pedantic and misunderstand the conversation, but kick dust over someone else’s post?

            Um, you do understand why it appears that you misunderstood the conversation, right?

    2. Dogs and cats, living together. Mass hysteria!

      Sorry, it had to be said, especially considering your nick choice.

  5. Folks use the term “open source” as if there are no strings attached. If Elon really wants to ensure that IP doesn’t block innovation, he should heed the license agreement attached to open source mechanisms and ensure that future IP builidng upon Tesla’s are also open source. Of course, to have a license agreement, you need the IP, so pleasse Elon/Tesla, don’t abandon or avoid filing patent applications.

    1. This is pure speculation of course, but one possibility might be an aftermarket parts manufacturer that makes parts that infringe Tesla’s trademarks (e.g. by using Tesla’s logo) or falsely claims that Tesla endorses their products. Tesla might add patent infringement claims to a trademark infringement or false endorsement suit, arguing that the technology had not been used in good faith but rather as part of a larger illegal scheme.

      Another possibility might be if Tesla’s competitors start using its patented technology, then collude to shut Tesla out of the market. Tesla could add patent infringement claims to an antitrust suit.

      I would imagine that any company investing significant amounts of money in this area of technology will ask for a formal license from Tesla that spells out the details. I suspect this is just the PR version.

      1. I think is something worse than that. Why did he take the patents down from their lobby walls? What does being proud of your accomplishments have to do with enforcement? I think Elon is being blocked from doing something by someone else’s patent and he has gone over to some sort of “patents are bad” dark side.

        1. While patents might have been good in the past, Musk argued, they too often today serve to stifle progress, entrench giant corporations, and pad lawyers’ pockets. ‘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.’

          From link to autos.yahoo.com

  6. Total conjecture on my part because I’m not familiar with Tesla’s portfolio, but I’m guessing this is a pretty smart business move. Try to encourage broader adoption while having a headstart on battery production because of the Gigafactory in the works. And who knows how much of the supply materials for the batteries they have locked up (I recall reading somewhere that the supply materials were somewhat limited).

    And the promise is not a contract. Good PR but they retain the ability to go after bad actors, whatever that means.

    1. Probably is a contract. And this is one of those bizarro cases where a company that makes very little money is loaded with cash because of the free money the fed has been pumping into the market for the rich. If Elon had to earn his money, then we wouldn’t see this type of behavior. So, Elon is saying this free money from the fed makes it so I don’t need capital to fund my innovations from patents so I am going to use my patents for marketing. It is true that this stock market voting that makes some small marginal companies insanely rich is an alternative to patents. But, let’s be clear that this is a company that is funded by the stock market and the fed.

      One should be a bit skeptical of this give away. Elon has a long history of being good at exploiting situations to his advantage (and playing hardball.)

  7. Could this be a case of Tesla trying to preempt a declaratory judgement action (hence the good-faith qualifier)?

  8. Do the Tesla shareholders have a cause of action against the company for giving away corporate property?

    1. The ability to disclaim comes with the property.

      Your question is moot, as the authority to do with the property what the company wants to do is part and parcel of their governing authority.

      I think you are instead inquiring into the wisdom of the move. That is likely not an actionable item for the shareholders. There is a viable business reason for this action – the expedition of market development. Perhaps a follow-up is to check what is in the pipeline for Tesla. This public donation may be less generous than it appears to be on its face (and yes, in deference to Blindman, the pipeline of Tesla might not even be capable of being checked if the pipeline is following the trade secret route).

      As I have pointed out in the past, the AIA confers a new submarine-style blessing on trade secrets, and it would probably be malpractice for patent attorneys to not discuss trade secret options in any intellectual property portfolio protection discussion.

      1. “Your question is moot, as the authority to do with the property what the company wants to do is part and parcel of their governing authority.”

        So, Elon could transfer sell Tesla’s main factory to one of his kids for the last half of a Snickers bar as the authority to do with the property what the company wants to do is part and parcel of his governing authority?

        Kewl!

        1. Les,

          You mistake authority for an egregious and ridiculous strawman proposition that is well beyond the discussion. As I ALSO noted, there are pragmatic business aspects to this decision which limit the degree to which you might make a REASONABLE counterpoint to.

          You don’t get to throw in a clearly unreasonable example and try to make authority into absolute authority. Do I need to teach you basics like a reasonable man theory or an objective theory of contract basis in order to talk about normal business transactions?

          Try to stay reasonable, ok?

      2. “Your question is moot, as the authority to do with the property what the company wants to do is part and parcel of their governing authority.”

        Then why am I asked to vote to accept or reject offers to purchase companies of which I own stock?

    2. Another comment snagged for moderation – what possible word is triggering the snag is beyond me (but it might be helpful to provide a link to a list of “blogging profanity”)…

  9. Fool’s Gold? Has Tesla expressly abandoned Tesla’s patents? As of this morning, No. Does Elon Musk have authority from Tesla’s Board to expressly abandon Tesla’s patents? TBD… Mr. Musk has granted a public covenant not to sue under Tesla’s patents, but not without qualifications. First, the covenant applies only to “anyone who…wants to use” the patented technology. Does the covenant apply to anyone who actually uses it? Second, the person must do so “in good faith.” What does that mean? Be careful…

    1. I think Steve that he is keeping in reserve the ability to sue a company that takes one of his cars and copies it in Vietnam.

    2. From the CNN article:
      Musk said that Tesla will continue to file for patents in the future, but only to prevent other entities from patenting Tesla’s innovations
      You don’t need to file for patents to prevent other entities from patenting Tesla’s innovations. If they were truly against patents, all they would need to do is publish all of their research on an ongoing basis — enough to establish prior art. If you have no intent to assert your patents, then anything else spent on patent attorneys is wasted money.

      However, I suspect that they are like Google — speaking out of both sides of their mouth at the same time. While Google has been publicly bad mouthing patents they have been spending like drunken sailors on shore leave buying up patent portfolios and massively ramping up their own in house patent acquisition operations.

      This is about PR and throwing a bone to the anti-IP crowd. If push comes to shove and Tesla has to protect their IP to stay in business, they will. In the meantime, they’ll throw out ambiguous statements like “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

      1. “You don’t need to file for patents to prevent other entities from patenting Tesla’s innovations. If they were truly against patents, all they would need to do is publish all of their research on an ongoing basis — enough to establish prior art. If you have no intent to assert your patents, then anything else spent on patent attorneys is wasted money.”

        While technically accurate, there is always a chance that the examiner wont find your publication and allow the competiotors application to issue as a patent.

        Then you could be sued for infringement, even though you are the true inventor. Sure, if the jury can understand the patent and your publication, you might win the law suit, but patent litigation is expensive. It wouldn’t take too many suits before patent prosecution looks like cheap insurance.

        1. While technically accurate, there is always a chance that the examiner wont find your publication and allow the competiotors application to issue as a patent.
          Then pointing out to them that their claims read on your published prior art should make them go away. Patents that read on prior art need only be feared by the little guy who doesn’t know any better.

          Then you could be sued for infringement, even though you are the true inventor. Sure, if the jury can understand the patent and your publication, you might win the law suit, but patent litigation is expensive. It wouldn’t take too many suits before patent prosecution looks like cheap insurance.
          Really? What patent attorney is going to want to sign up for Rule 11 sanctions after opposing counsel sends them the published disclosure as prior art? We are living in a world where getting attorney fees are much easier. If I’m a litigator, I’m scared of good prior art.

          Also, why should it even make it to litigation? Reexamination is also a good route if you’ve got good prior art. It is cheap, the burden of proof is less, and the USPTO loves to issue rejections. You’ll spend a lot less on attorney fees for the very few instances of this happening than it would be to continue to get patents — if you truly aren’t interested in protecting your inventions with patents.

          1. “Really? What patent attorney is going to want to sign up for Rule 11 sanctions after opposing counsel sends them the published disclosure as prior art? We are living in a world where getting attorney fees are much easier. If I’m a litigator, I’m scared of good prior art.”

            If that were true, there would be no “patent troll” problem. Its only when “trolls” try to assert “bad” invalid patents that anyone complains, right?

            1. If that were true, there would be no “patent troll” problem. Its only when “trolls” try to assert “bad” invalid patents that anyone complains, right?

              Car keys please.

            2. If that were true, there would be no “patent troll” problem. Its only when “trolls” try to assert “bad” invalid patents that anyone complains, right?
              I’m not sure if you are being sarcastic or not.

              People will complain about patent “trolls” regardless of the validity of the underlying patents. It is easier to paint all actors (good and bad) with the same broad brush than it is to address the particular facts of whatever patent is being asserted.

              Even if patents were 100% valid, to some, there would still be a patent troll problem.

          2. “Also, why should it even make it to litigation? Reexamination is also a good route if you’ve got good prior art. It is cheap, the burden of proof is less, and the USPTO loves to issue rejections. You’ll spend a lot less on attorney fees for the very few instances of this happening than it would be to continue to get patents — if you truly aren’t interested in protecting your inventions with patents.”

            If the patent isn’t an exact copy of the published invention, then everything is a judgement call. “Obviousness” is in the eye of the beholder.

  10. Hint, Hint…..>>>they’ve given up on the patent system, and have gone to the “dark side”…… and will now rely on “Trade Secrets” only…….

    In case you haven’t noticed, they’re not alone…….

    1. It’s hard to have trade secrets in a car. You can simply take it apart and determine how it works. You might be able to have trade secrets for the software, but even there you can determine a lot via reverse engineering.

      When I was a corporate counsel, we kept anything that couldn’t be reverse engineered as a trade secret. But we also made things, and once those things were in the market, they could easily be reverse engineered. We patented those.

    2. There are very few parts of an automobile that can be protected by trade secret law, because, as with most other products, once it is in the hands of any member of the public on a non-confidential basis, all trade secret protection automatically ends. [It is an urban myth that trade secret protection can be widely or easily substituted for patent protection.] [The rare exceptions would include some software or a rare part or chemical compound made by a commercially advantageous secret process that cannot be detected or back engineered from the publicly sold part itself. The fact that a part would have to be removed from the car and tested does not make it a trade secret.]

      1. paul, I find your post to be rather naive, given the amount of software controls in vehicles today. Rare? what century are you living in?

        Further, trade secret is NOT just about hardware, which is the only thing that could easily be reverse engineered from the “product in your hand” view.

  11. Patent counsel, you’re fired!

    Neither Telsa nor any successor in interest to any of the patents or patent applications now or at anytime hereafter owned by Telsa shall be asserted against any person or entity, and Telsa shall not bring an action of any nature asserting any patent before the ITC, or before any legal, judicial, arbitral, administrative, executive or other type of body or tribunal that has, or claims to have, authority to adjudicate such action in whole or in part against any potential infringer, or any product that may include any apparatus or method in covered by any Telsa patent, whether in the United States or any other jurisdiction, worldwide.

    Is that correct, Elon Musk ???

    1. He means build your own production and not copy. But come one. Tesla is an example of a company that is floating on money from the fed. Tesla is an example of one of the many market distortions caused by the free money to the rich. However, in this case, it is fueling innovation, but let’s be clear that Tesla can afford to be generous (there is a good argument that this is nothing but a marketing ploy and PR ploy) due to the federal reserve giving them billions of dollars.

      1. Right – they’re generously giving away other people’s money.

        Let me tell you, I can be real generous with the dough in NWPA’s wallet – my own, not so much!

        1. lol, b-b-b-but they want to give it away according to the people’s needs – doesn’t that make it like, really awesome and such?

          (a light jest – relax my social leaning friends)

            1. Thanks second anon – yes they CAN do – or not do – what they want, as the patent is indeed what is called a negative right.

              One can rightfully even not practice and block anyone else from practicing anything within the scope of the patent.

              Some people tend to forget about that. Some people get fixated on the infringer needing to be excused because he is “making product.” Some people get fixated that an “end user” is “using by golly” and should not be held acountable to a law that has not changed in the respect that “use” as infringement is strict liability and MAKES NO DIFFERENCE that the user is a merchant, a supplier, or your neighbor. Use is use – period. Some people tend to forget that there is NO innocent infringer. Some people tend to forget and want to being in copyright notions like “Fair Use” that do not exist in patent law.

              Some people…

Comments are closed.