Tesla Motors: Copy Us if You Want (2014)

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TESLA MOTORS: COPY US IF YOU WANT

EAN

-F

RANÇOIS

OURNAULT AND

EAN

-S

ÉBASTIEN

ODRIGUEZ

AQUETTE

ROBIC,

LLP

AWYERS

ATENT AND

RADE

MARK

GENTS

On June 12th, Elon Musk, CEO of the Tesla Motors automaker, issued a release on

the company's website announcing the “freeing” of Tesla patents in order to allow

competitors to use them.

More specifically, the high-end electric automaker will retain its patent rights, but will

commit to not initiate court proceedings against potential competitors. In return, these

competitors will have to agree with the “open source” vision of Tesla Motors by

freeing their own patents.

In his release, Mr. Musk mentioned that Tesla Motors was created with the mission to

accelerate the advent of sustainable transport and to clear a path to the creation of

compelling electric vehicles. However, according to Musk, in order to carry out this

mission, the company must avoid using intellectual property assets to create barriers

for those who are following in its footsteps.

This announcement led some to question the reasoning behind investing in a patent

only to allow competitors to use the patented technology for free. In other words,

would it not have been better to save money by not patenting the technology in the

first place?

To answer this question, it is worth remembering that a patent can be used not only

as an offensive weapon against those who copy or use the protected technology, but

can also be used as a defensive weapon to counterattack in case of a potential

prosecution from competitors. This is why Tesla Motors will maintain ownership of its

patents, although the company claims that it will not use them against its competitors.

In addition, some sources indicate that Tesla uses its patents as a leverage to obtain

financing. Tesla's patents could also be used as a bargaining chip in negociations

surrounding a lawsuit.

It appears that this highly publicized decision has two distinct aspects. On one hand,

it demonstrates that the company and its CEO are losing faith in the U.S. patent

system which, according to Mr. Musk, interferes with its primary mission by slowing

From ROBIC,

LLP

a multidisciplinary firm of Lawyers, and Patent and Trade-mark Agents. Published

in the Summer 2014 (Vol. 18, no. 1) Newsletter of the firm. Publication 068.177E.

ROBIC,

LLP

www.robic.ca

[email protected]om

ONTREAL

1001 Square-Victoria - Bloc E - 8

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Montreal, Quebec, Canada H2Z 2B7

Tel.: +1 514 987-6242 Fax: +1 514 845-7874

UEBEC

2828 Laurier Boulevard, Tower 1, Suite 925

Quebec, Quebec, Canada G1V 0B9

Tel.: +1 418 653-1888 Fax.: +1 418 653-0006

down technological progress, entrenching the positions of giant corporations and

enriching lawyers.

On the other hand, this strategic choice could be a wise business decision. By

allowing its competition to adopt its technology, Tesla Motors is hoping that its

revolutionary charging technology will become the standard in the electric car

industry. This way, the Californian company will be sure that none of its competitors

will develop a new standard capable of pushing Telsa Motors out of its own market.

In other words, Telsa Motors may have learned from errors made in the past by other

standards-related companies, such as Beta-Max and HD DVD ,which were replaced

by the VHS and Blu-Ray standards.

Is this the beginning of a new era for the freedom of use of patented technology? It is

still too early to draw any conclusions, but we hope that this announcement will give a

strong boost to the electric car market!

ROBIC,

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1001 Square-Victoria - Bloc E - 8

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Montreal, Quebec, Canada H2Z 2B7

Tel.: +1 514 987-6242 Fax: +1 514 845-7874

UEBEC

2828 Laurier Boulevard, Tower 1, Suite 925

Quebec, Quebec, Canada G1V 0B9

Tel.: +1 418 653-1888 Fax.: +1 418 653-0006

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