Tesla Gives Up Patents to Spur Innovation

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Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use their technology.
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Electric carmaker Tesla announced it was giving up its patents to "the open source movement," to help spur electric vehicle technology. The unusual move comes with Tesla enjoying huge success, but against a backdrop of multiplying legal squabbles among technology firms over patents.

In a blog titled, "All Our Patent Are Belong To You," Tesla chief executive Elon Musk laid out the details Thursday.

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"Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology."

Musk, an entrepreneur who made a fortune with the PayPal online payment service and also heads the space travel firm Space X, said he does not want patents to halt growth of an important environmental technology.

"We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform," he wrote.

He said when Tesla was launched, "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."

But he said this turned out not to be the case. "We couldn't have been more wrong," he said.

"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 one percent of their total vehicle sales."

Musk added that Tesla "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology."

Brian Love, a Santa Clara University law professor, said he has seen a "very positive reaction" to Tesla's decision. "There is an ongoing debate in this country about the costs and benefits patents bring to small companies," Love told AFP in an email. "In his statement, Elon Musk explains that, while he originally thought patents were worthwhile, he has since come to believe that they generally do more harm than good."

But Love said it is not clear if Tesla is in fact ceding all its rights. "Rather, it seems to be simply promising not to proactively sue those who enter the electric car market and use similar technology," he said.

Robert Stoll, a former US patent commissioner who practices law in Washington, said that Tesla "must have a good business reason for wanting to freely share its electric car patents with others."

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Stoll told AFP: " Tesla might be planning to distinguish itself from the competitors it helps by producing a better product from its longer history in this industry or by inventing and patenting better electric cars than are available today." He added that the move is not unprecedented and that the US Patent Office has a mechanism to allow companies to cede their patent rights.

Tesla earlier this year unveiled plans for a so-called "Giga factory" for advanced electric car batteries as part of a plan to move from niche manufacturer to mass market carmaker. The company says it hopes to bring the cost of production down and produce 500,000 cars a year.

Tesla, which makes a $75,000 sedan in heavy demand from well-heeled buyers, saw shares quadruple last year on expectations of surging growth. Shares in Tesla dipped 0.46 percent to end at $203.52. The company's market value is above $25 billion, a figure which suggests investors expect huge growth from the California firm.

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