Epiq Systems, Inc.
Intellectual Property

Tesla patent pledge clears way for shared infrastructure

Electric car manufacturer Tesla Motors’ recent move to allow other companies to use its technology in good faith makes sense, given that the products can only become more widespread if the infrastructure is shared, says Toronto patent lawyer Aaron Edgar.

In a recent blog post, Tesla’s CEO Elon Musk, wrote, “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.”

Musk said it’s impossible for his company to build electric cars fast enough to address the carbon crisis, and Tesla’s “true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”

Edgar says it’s important to note that Tesla hasn't necessarily released its patents to the public domain.

“They have just stated that they are not going to initiate patent litigation against others who want to use their technology in good faith. This is what is commonly referred to as using patents defensively, and it is what most active technology companies do,” says the patent lawyer.

“For electric vehicles to become more widespread there needs to be shared infrastructure (e.g charging stations or batteries) that is available to vehicles from all manufactures,” says Edgar. “This public statement that Tesla will not initiate patent litigation is just a recognition that Tesla wants to work with other EV manufacturers to develop this shared infrastructure.”

While the manufacturer’s announcement is positive, Edgar says it isn’t groundbreaking.

“Tesla has really just made a public statement and has not made any changes to its patent holdings,” he says.

“They have not divested themselves of their patent rights, and this still leaves it open that Tesla will initiate patent litigation against those who want to use the technology in bad faith. Bad faith could just mean that someone isn't willing to pay the licensing fees that Tesla is offering for use of its patents.”

Edgar says, “Tesla would have to answer to their shareholders if they really put their technology in the public domain; Tesla patents are likely considered a very valuable asset of the company.”

The reasoning behind such an announcement is likely because the success of the electric vehicle is going to depend on using commonly available standards, says Edgar.

“Tesla has invested a huge amount of capital in battery manufacturing. Having open standards for batteries and charging will open the battery market up for Tesla, and they will likely be the prime beneficiary if there are open battery standards used by all vehicle manufacturers,” he says.

“Tesla also recognized that they built their patent portfolio out of fear that larger vehicle manufacturers would copy their technology. This ended up not being the case for Tesla but the reasoning still stands that startups need patents to protect themselves from the entrenched market players.”

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