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Tesla opens up all its patents

12 June 2014

Tesla Motors CEO Elon Musk announced in a blog post that the company is opening up access to its patents; Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use the company’s 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.

…At Tesla, however, we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. We couldn’t have been more wrong. The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales.

At best, the large automakers are producing electric cars with limited range in limited volume. Some produce no zero emission cars at all. Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis. By the same token, it means the market is enormous. Our 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.

We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform. Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.

—Elon Musk

June 12, 2014 in Brief | Permalink | Comments (25) | TrackBack (0)

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" We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard."

WOW

Wrong move.  Tesla should have contributed its patents to a pool free for use, but made any carmaker who wanted to use them contribute their patents also.

What is not to like about Tesla as a company and Musk as their leader? I certainly like them. They offer the best hope yet for some real change for the better in the automotive industry.

I am still surprised about this decision to open up for all of their patents so early. Nevertheless, I guess Tesla feels confident enough that they now are in a position where they cannot be overwhelmed by the still much larger players simply because these other players are so far behind Tesla in their plans to make long-range BEVs and compelling PHEVs. Tesla is well on their way to take 10 to 20% of the global market for private cars costing over 70,000 USD. They need to sell over 100k units per year to get to that point but it seems that they are sure they will get there. They will get to 4k unit per month (48k annualized) by December this year and they should be able to double that number by the end of 2016. When they get to 100k units per year for their 70,000+ USD cars they are too large to be overwhelmed by others in that segment of the market. At that point patents might not matter so much at deterring competition and the benefits of attracting worker talent and appraise car customers from their open patent strategy is probably much more important than the extra competition that open patents will bring.

@EP

Note the words "in good faith". Tesla can still sue companies using their patents that do not act in good faith. For example, I would say that a company that sues Tesla for violating their patents, if that company also use Tesla's technology in their own cars, is not acting in good faith and can therefore be sued back by Tesla for using Tesla's technology.

For the purpose of speeding up the adoption of electric vehicles, perhaps there are other ways to achieve it faster than freeing up Tesla patents. The reason is that in order for others to use Tesla's patents, it would take others quite a while, years, to build up the manufacturing design and tooling. Furthermore, concentrating solely on BEV's cannot realize rapid growth of PEV's due to the bottle-neck in battery manufacturing facility and raw materials, because BEV's requires too much battery capacity in comparison to PHEV's and HEV's.

However, if Tesla would offer to sell its batteries in compact packaging of 10-20 kWh capacity to other major manufacturers for the purpose of making PHEV's, then Tesla would make profit out of the sale, while PHEV's using Tesla's battery technology will offer light-weight and internal space and sale prices on par with existing ICEV's and HEV's and will accelerate the sales of PHEV's greatly.

Either that, or Tesla can enter joint-venture agreements with major ICEV manufacturers to produce a PHEV chassis and drive train incorporating Tesla's battery and electrive drive with a 1-liter 3-cylinder turbocharged ICE for incorporating into various models with different badges, similar to previous JV's between Ford and Mazda, Toyota and GM, Toyota and Sterling, Mitsubishi and Chrysler...etc and the world will greatly benefit from these JV's to produce PHEV's.

It will be the affordably-priced PHEV's with weight and internal space competitive with existing ICEV's that will accelerate the growth of PEV's.

Patent rights/protection and all the multi-million $$ legal fights it generates is the worst example of legal trade restriction in general use today.

Instead of protecting creators it slows down production of essential low cost drugs and technologies required to reduce fossil fuels consumption and GHGs.

Eon Musk is a true leader, not hiding behind 10,000+ 'à la GM' patents, to slow progress and compete.

Tesla are trying to establish high speed charging standards. The easiest way to do this is to eliminate any Tesla patent barriers, hence their actions.

Don't get me wrong - I applaud their actions.

@Roger, I am with you on the PHEVs, IMO they are the way to go. You could sell cars with 5, 10, 15, 20 KhW of batteries, just as they sell bhp now.
You could size the battery to your commute (+ a little), The odd long range ICE trip is not a killer, especially if you can do the odd supercharge when they present themselves.
Else fill up with gas and keep moving anyway.

Look at it this way, Musk wants to build a new $5 billion battery factory and would like customers that buy by the millions a month. Volt, Leaf, Spark or all the others combined are not going to do that at the present adoption rates even IF they used the batteries.

NOW we have a land rush for Tesla technology in "good faith" meaning they will put it into production and who do you think they will buy the batteries from? I would guess that $5 billion factory that can make them at a better price and greater quantity than anyone else.

LOL I love this!

And I also love SJC's cynical/pragmatic view of it...it makes perfect business sense to look like the "good guy", actually do some good for the industry and build yourself a loyal customer base for your new GigaFactory batteries!!!

What a hoot.

Reminds me of Howard Hughes in his golden years.

What's really sobering is that there are some innocents that will swallow this.

"At best, the large automakers are producing electric cars with limited range in limited volume. Some produce no zero emission cars at all."

I think he realizes there are plenty on the fringe that are willing to believe that only Tesla is in the business to sell what the EVs the public wants; all other 50 plus car manufacturers (including Toyota and Nissan) are in business to kill the electric car and perpetuate the ICE, out of malice, nostalgia (and kindness, I suppose).


Yes TT.... all Oil people, all repair shops, many posters and many vehicle manufacturers want to perpetuate the ICE mostly out of self interest (their job and/or their pocket book?).

Mr. Elon Musk calls their bluff and does the opposite. He creates jobs and wealth with BEVs and batteries not with ICEVs, oil, gas, diesel, car sales garage clicks etc.

His lower cost extended range (Model EEE?), with improved lower cost batteries, will sell worldwide by the million from 2018 and onward.

His multiple quick charge stations will become a major business endeavour and could make more profits than the BEVs and battery factories combined by 2020 or so. Picking up a quick charge will not be free forever.

If he gets it right, he will combine Ford Motor with Standard Oil by providing the cars AND the energy. For too long the auto industry has been totally dependent on the oil industry, $4 gasoline in 2008 showed them this.

Does anybody know whether Tesla patents are actually worth anything? I have never heard anyone say that these patents are limiting the industry.
Batteries: none of importance.
E-motor: nice design but there are many other good designs
vehicle integration: easy to get around
Supercharger: as mentioned by others, this is a tactic to get the standard adopted. TEPCO did the same with the CHAdeMO patents; open to anyone.
Please DO correct me if I'm wrong on these points... I think Tesla is a great company but its patents do not seem to me to be especially important, like the ones owned by Toyota on hybrid powertrains, U of Texas and Hydro Quebec on some battery chemistries, etc.

If you do a Google patent search for Tesla Motors, in just the first few pages you see a dozen patents and half a dozen patent applications. I don't know the exact number nor how important they are to the car industry, but like all patents they act as "land mines" waiting to go off. They limit innovation.

Here is a list of 249 Tesla Motors patent applications.
http://stks.freshpatents.com/Tesla-Motors-Inc-nm1.php

No Harve .... all the Oil people and repair shops, and the many posters and vehicle manufacturers cannot stop EVs nor perpetuate the ICE any more than YOU are responsible by not making millions of EVs yourself.

And where does this screwball idea about patents being a worthless impediment come from?

Most mature people know that many rules and laws have pros and cons and some thought to the pros is in order ...

Wait, maybe the answer to my question can be found in the first 3 words in the sentance above.

It is difficult to discredit Tesla's management just because they do thing differently, not the OLD fashion way.

Patents have became lawyers' oversized pay checks. It is time to do without them because they limit and slow progress, unduly raise prices and create useless non-productive legal jobs.

The 'No Fault' car insurance system is a much better solution to get rid of costly useless legal battles.

There was a reason for patents in the beginning, but now it has become a perverted and twisted game who can sue whom. There are patent trolls that accumulate patents, never actually creating anything who sue everyone they can..all perfectly legal but a tremendous risk burden to business.

Harvey,
Patents allow people and corporation to freely post and share ideas without afraid of their ideas got stolen and exploit by others without paying royalty.

In ancient times before establishment of patent office, people tend to keep secret new ideas, new techniques, skills etc. (trade secret, Ancient Chinese secret etc...) and advancements proceeded very slowly. Masters were reluctant to pass on ideas to students, and selected very few of them...Good ideas often failed to catch on.

With the patent system, you are forced to fully disclose how to make and use your invention so that others can learn about it and can design better ideas around it and file new patents around it and hopefully can get patented around the previous patent...humanity is undoubtedly much better served. After 20 years lifespan of a patent, the patent's claimed subject matters will be free for everyone to use, and all potent secrets are disclosed for the world to see.

Now you can look on Google Patent and find out how Thomas Edison design and built all his inventions, and everyone is free to make and sell Edison's inventions. Without the patent system, all Edison's greatest ideas may be lost forever, especially when his lab burned down and he refused to disclose his idea to anyone for fear that they will steal his ideas!

Even "patent trolls" offer good and new ideas to the world so that others can learn from to arrive at even new and better ideas. If the idea is no good, then, all the patent troll has done was to enrich the US patent office with a lot fees paid to get the patent to examined, issued, and maintained, perhaps tens of thousands of dollars per patent, also in attorney's fees.
Helps the economy by ensuring jobs for patent clerks, patent examiners, patent attorneys, paralegals, invention promotion firms...etc, and of course in case of lawsuits, jobs for the attorneys, clerks, judges, etc..

Major corporations have legal departments, though increase the cost of doing business, help more people employed in a civil society. In a civil society under the rule of law, lawyers and lawsuits are necessity to maintain the rules and orders. The alternative of this rule of law was that, in more primitive societies, was rules by iron fist, by force, extortion, intimidation, violence, execution (assasination) etc...

Roger,

They don't care about fees, a few thousand dollars is nothing if it can bring them millions in court. Those "companies" buy patents from defunct companies, they have tons of them. They never take anything to market and are nothing but bottom feeders. Talk to a patent attorney and find out.

Don't worry, SJC, before a company would develop a new idea, they would first do a patent search to see who have any patents that are even remotely related to their new idea, then their patent attorney would look to see if their new idea would infringe upon any previous existing patents. If the new idea is likely to infringe on existing patents, then they will likely contact existing patent holders to negotiate a deal. This can avoid future patent lawsuits. The reasons that lawsuits happen sometimes are due to murky areas like the Samsung v Apple lawsuit in which infringements are not clear cut. In this case, the court will help make a decision, and it did. No major problem and no impediment to technological progress for existing patent system.

That is just guess work on the part of attorneys, they call it a practice because they keep on practicing. If it were that clear cut Apple and Samsung would never have been in court for years.

It is never that easy. My point is the patent system needs to be COMPLETELY restructured from top to bottom. Patents would be harder to get, they would last a shorter time and if you did not take the product to market, you would LOSE the patent.

Yes, the patent system is imperfect but it serves a need.

Private industry pours billions into research.

The patent allows them to recoup the development cost so they will continue to create.

If software developers and pharmaceutical companies were required to sell CDs or pills with their product at cost ($0.20), they would stop developing new product.

It is not obvious that simplistic changes would make things better.


@SJC,
One potential reform to the current US patent law should be that no patent should be used as a way to prevent the manufacture of any item that can benefit society. An example would be how Cobasys sat on their NiMh patents to keep others from manufacturing large-format automobile NiMh batteries.

A way around this would be that if a patent holder is unable or unwilling to manufacture their invention, or unwilling to keep profit of said manufactured invention to within reasonable limit, and if others are interested in manufacturing the same, upon request for licensing, the patent holder must license the patent for others to manufacture the item for a royalty not exceeding 2% of gross revenues from the sale of said item represented in said patent. This will prevent large corporations from buying patents from potential competitive but better products and keep them from the market.

A legal precedence and legal theory to support the above would be in the anti-trust law and anti-competition law designed to maintain sufficient competition to keep free-market economy functioning.

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