It's Happening

Elon Musk won’t sue you for using Tesla’s trade secrets

We told you there was a strong chance something like this was about to happen.

Today, “in the spirit of the open source movement,” Elon Musk effectively set all of Tesla’s patents free. He announced in a post on the company’s website: “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

And investors don’t seem thrilled. Tesla shares were up strongly before the announcement, but have since taken a hit and are now in negative territory.

Musk, who has described the patent system as “farcical,” said Tesla only took out protections on its intellectual property for fear of being copied by big automakers.”The unfortunate reality is the opposite,” he wrote. “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.”

So what will this mean in practical terms? First, it’s worth noting that a blog post is not legally binding. And Tesla does not appear to be making its technology freely available to anyone who wants to use it; Musk seems to just be saying that he won’t sue anyone who reverse engineers it (or accesses it some other way).

I have previously argued that such a move wouldn’t be purely altruistic. Fostering an ecosystem around electric vehicles could, in theory, lead to more suppliers in that sector of the industry, which might drive down input costs for Tesla. Musk acknowledges this advantage: “We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform,” he writes.

Still, Musk’s is a refreshing change in attitude from the bickering over intellectual property so common in the technology industry. “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,” Musk wrote. “We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.”

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