Is Tesla's Open Patent Policy Encouraging Innovation?

Back in June, electric car manufacturer Tesla Motor’s CEO Elon Musk “opened up” Tesla’s patents to other car manufacturers. Now that the dust has settled, was this really the game-changing move that analysts and news outlets had predicted? And how will it affect Tesla’s recently unveiled Model D?

What Tesla’s Announcement Really Means

To explore the real reason behind Musk’s seemingly bold decision, we need to examine what the phrase “opened up” actually means in this context. Musk has stated in a blog post on Tesla’s website that he will not pursue litigation against anyone who wants to use the technology disclosed in Tesla patents in “good faith.” See All Our Patent Are Belong to You.” There is nothing in this promise, however, that is legally binding.

Patents, by design, are already “open” to the public. The United States Patent and Trademark Office publishes patent applications and granted patents. Companies can, and do, review all of the technology disclosed in a patent. So there are no secrets to “open up” or to “give away.”

Moreover, Musk’s “good faith” requirement creates a legal loophole, giving Tesla full discretion to determine whether another manufacturer is indeed using Tesla’s technology in good faith.  The promise appears to boil down to a PR move that gives Musk the ability to enforce Tesla’s IP rights without breaking his promise to the public, while maintaining the company’s status as a benevolent innovator.


The electric vehicle industry is in its infancy— without any direct competitors manufacturing electric cars, Tesla’s main concern is ensuring that market for electric vehicles continues to grow so it can stay in business.  By encouraging other car companies to utilize its technology, Tesla is positioning itself to become the industry standard for the manufacture and support of electric vehicles. This becomes particularly apparent when taking into account Tesla’s massive battery manufacturing operation.

It also doesn’t hurt that this PR move paints Tesla as a company that strives to make the world a better place through innovation.

How Will This Affect the Model D?

Although it is unlikely that Musk’s patent decision will result in competing manufacturers producing Model D copycats, it could have an indirect impact on future sales. If car companies set aside their reservations and take Musk’s promise seriously, they may begin to produce more electric vehicles and the accompanying infrastructure, possibly leading to an increase in the electric car market. A more robust market may make the idea of purchasing automobiles like the Model D more palatable to consumers.

Will Others Follow Suit?

Could a company like Apple, who is notorious for its IP protectionand enforcementstrategies, take a page out of Tesla’s public relations book? Unlikely. The mobile and tablet industries face steep competition, and patents are a well-established tool to keep competitors at bay.

Want to be the first to know if Musk breaks his promise? Use Docket Alarm’s Federal Court Case Alert Tool to create an email alert for all new patent cases involving Tesla.

Docket Alarm is an advanced search and litigation tracking service for the Patent Trial and Appeals Board (PTAB), the International Trade Commission (ITC), Bankruptcy Courts, and Federal Courts across the United States. Docket Alarm searches and tracks millions of dockets and documents for thousands of users.

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