Friday, June 13, 2014

Elon Musk - All Our Patents Are Belong to You?

In All Our Patents Are Belong to You Elon Musk explains why he is giving away the entire Tesla patent portfolio to grow the market for electric cars. It might be just the thing to grow a nascent market, but who knows. It is also less sweeping than it sounds as the dedication is conditioned on competitors acting in "good faith." Does that mean Tesla can still enforce the patents as long as it is sued first, that is, defensively? Whatever the case, this is a bold step as the Tesla patents I have read seem to be well written and on commercially important topics (i.e., valuable). One wonders why Tesla didn't simply license the patents for a zero fee for a certain time period.

Despite the hero worship in the comments to Mr. Musk's post, this "patent dedication" may not have the desired affect. How much of the automakers' decision to enter the electric car market is based on the barrier presented by Telsa's patents? My guess is this patent risk factor is far outweighed by current unfavorable economics. I hope we all drive electric cars in the future, but if you buy a Tesla and cannot tap into a free charging station let me know how much your electric bill increases.

Tesla's competitors may be able to freely use Tesla's patented technology, because of the doctrine of equitable estoppel. Furthermore, even if Tesla thinks it smart, what about the competitors? I guess they can take advantage as long as they act in good faith.

Copyright © 2014 Robert Moll. All rights reserved.