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Tesla announces patent sharing initiative

Written by Muhammed Poswall on 20 June 2014

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Tesla specialises in designing and manufacturing electric cars and it has been at the forefront of producing electric cars and charging stations. It may be surprising that in a world of constant patent litigation and the protection of a business’ IP rights, Tesla boss Elon Musk announced that Tesla would be sharing its patents. Tesla confirmed that it will ‘not initiate patents lawsuits against anyone who, in good faith, wants to use our technology’. This is contrary to the approach taken in the smart phone wars between Apple and Samsung, which has resulted in lateral litigation across the globe.

Tesla’s shares were up 8% on the news and it is hoped that by removing the need for entrepreneurs to invest in expensive research and development, the electric car market can be developed at a much faster rate, opening up the electric car market to the masses.

It is no doubt a risky strategy, when you consider that many consider IP rights to be the core element of a business, but it is not a new approach. Google have allowed anybody to use its android operating system which has created an apps market specifically for Android devices. The fear is that by allowing competitors to use your patents, with the additional funds they have, they may take the lead in the market and then seek to protect their rights. Take for example the mobile phone market. The GSM standard was launched with several European telecom firms cooperating together. Only then for the likes of Apple and Samsung to use the system and become the market leaders with former telecom giants such as Nokia and Ericsson now playing catch up.

Now doubt this is a risky strategy for Tesla and we will have to wait and see whether other car giants will swoop in and take advantage of this opportunity.

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