Tesla’s opening sourcing of its patents

June 17, 2014


Tesla’s Elon Musk opened Tesla’s patents to his rivals on June 12, 2014.  In a blog post [http://www.teslamotors.com/blog/all-our-patent-are-belong-you], Musk said “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” While the announcement seems revolutionary, in reality, several companies have opened their patents in various forms in the past.

On May 29, 2002, Red Hat issued a non-assertion promise under GNU General Public License to its software patents [http://www.redhat.com/legal/patent_policy.html].  The promise, however, did not extend to “any party who institutes patent litigation against Red Hat with respect to a patent applicable to software.”

On January 11, 2005, IBM pledged open access to key innovations covered by 500 IBM software patents [http://www.ibm.com/ibm/licensing/patents/pledgedpatents.pdf]. The pledge applied to “any individual, community, or company working on or using software that meets the Open Source Initiative (OSI) definition of open source software now or in the future.”  [https://newsroom.ibm.com/] IBM’s desire was to establish an industry wide “patent commons” to establish a platform for further innovations.  IBM has since added patents to its pledge [http://www-03.ibm.com/press/us/en/pressrelease/21846.wss].

On January 25, 2005, Sun Microsystems issued what was at the time the largest single release of patent innovations to an open source community.  Sun opened the door to 1,600 patents associated with the Solaris operating system. 

On September 12, 2006, Microsoft issued an Open Specification Promise [http://www.microsoft.com/openspecifications/en/us/programs/osp/default.aspx].  The document, revised in 2007, provides that “Microsoft irrevocably promises not to assert any Microsoft Necessary Claims against you for making, using, selling, offering for sale, importing or distributing any to the extent it conforms to a Covered Specification….”  Microsoft identified the specifications covered by the promise and informed the public that the promise would not apply to any party who participated in a patent infringement lawsuit against Microsoft.

On April 17, 2012, Twitter announced its Innovator’s Patent Agreement [https://blog.twitter.com/2012/introducing-innovators-patent-agreement]. In its press release, Twitter informed the public of its commitment that its patents “can only be used for defensive purposes.”  Twitter informed the public it would not “use patents from employees’ inventions in offensive litigation without their permission.”  That control then flows with the patents.

On March 28, 20113, Google issued its Open Patent Non-Assertion Pledge [http://www.google.com/patents/opnpledge/pledge/].  Google pledged “the free use of certain of its patents in connection with Free or Open Source Software” based on terms set out on its website.  Google listed a set of patents on its website [http://www.google.com/patents/opnpledge/patents/] and claimed “it may supplement this list of patents from time to time in its discretion.”

Tesla’s issuance of its open source statement is the latest in several statements issued by companies that they would not assert their patents. Why would companies give up their valuable intellectual property?

Tesla has made it clear that the move is to allow other companies to enter the electric car market and increase the traction of these vehicles in the industry. Electric cars currently account for less than one percent of all vehicles sold in the United States, with fewer than 220,000 on the road (According to Electric Drive Transportation Association). High prices ($70,000 for a Tesla Model S) and a lack of charging stations are also dampening the industry. Tesla believes that by leveling the playing field, they will be able to drive down costs and truly compete against gasoline cars.

Just because another company can utilize Tesla’s patents doesn’t mean they have access to trade secrets and processes, which should protect Tesla’s uniqueness in the future. The real test: will other companies take the bait? 

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