During an interview with Ron Baron last Friday, Tesla CEO Elon Musk very briefly mentioned for the first time that he believes companies are now using Tesla’s patents:
“I think actually there are a number of companies using our patents.”
Musk’s comment was in response to Baron asking why companies are not taking advantage of Tesla’s technology considering it is “free” and that the company is achieving higher safety and emission standard than the competition.
Though the reason it took so long has probably nothing to do with the quality of Tesla’s patents, but instead with Tesla’s “good faith” clause in its “Patent Pledge”, which ultimately will have implications on Tesla’s relationships with the undisclosed automakers using its patented technology.
According to Tesla’s Patent Pledge, the way it is opening its patents is by pledging not to sue any party using the company’s patented technology for electric vehicles, if such party is acting in “good faith”.
Tesla’s definition of “acting in good faith” depends solely on three things a party wanting to use Tesla’s patents for free can not do:
- asserted, helped others assert or had a financial stake in any assertion of (i) any patent or other intellectual property right against Tesla or (ii) any patent right against a third-party for its use of technologies relating to electric vehicles or related equipment;
- challenged, helped others challenge, or had a financial stake in any challenge to any Tesla patent; or
- marketed or sold any knock-off product (e.g., a product created by imitating or copying the design or appearance of a Tesla product or which suggests an association with or endorsement by Tesla) or provided any material assistance to another party doing so.
In other words, if a company wants to use Tesla’s patents for free, they cannot sue Tesla for infringement of their own patents, which has some interesting implications since a legal action is the main, if not only mean to enforce intellectual property rights.
That means that Tesla could safely use the patents of a company using its own patents, even if said company didn’t “open-source” them since they couldn’t sue Tesla for infringement based on their agreement to use Tesla’s patents in “good faith”.
Even though to most people it would seem like a fair trade-off, such a requirement is enough to scare away plenty of corporations, especially established companies with an extensive patent portfolio. Though it would be an easier decision for smaller companies with little intellectual propriety since they would get access to an important collection of patents while giving Tesla access to only a small portfolio or even nothing.
Musk didn’t confirm which companies are currently using Tesla’s patents, but it would be interesting to know if they are established automakers or startups and to see if not only new electric vehicles utilizing Tesla’s patents will come out in the future, but also if Tesla will be able to access new patented technologies for future implementations through the Patent Pledge agreement…
Tesla’s patent wall before and after going open-source: