Tesla Motors surprised the entire auto industry when it announced plans to share patents for its electric cars free of charge.
Tesla’s electronic cars travel three times farther on a single charge than most other electric cars on the market. The Tesla Model S travels 265 miles in one trip, while the Nissan Leaf, America’s most popular electric car, only travels 84 miles.
Technological innovations and several luxury features have led to high praise for Tesla. In 2013, the Tesla Model S was named “Motor Trend Car of the Year”.
Tesla currently holds more than 200 patents, with an additional 280 pending worldwide. In honor of the “open source” movement, the company has pledged to allow other manufacturers to use its patents in “good faith” without the threat of a lawsuit.
According to Tesla CEO Elon Musk, Tesla’s primary goal has always been to create a system of sustainable transport. By offering a free license to use its patents, the brand encourages other businesses to follow its example.
Critics argue that competing companies would have found ways around the patents eventually, so Tesla’s announcement is more self-motivated than generous. Without patent restrictions, the company will save millions that other companies spend chasing down and litigating patent infringers.
All car manufacturers are eligible if they act in “good faith”, but it is their choice. Even if nobody decides to build the cars, Tesla is giving everyone the option by releasing the patents.
Tesla is not making its designs public; it is offering a free license to use its patented technology. Tesla still owns exclusive rights to the designs; it is just allowing others to use them for free.
In business nothing is certain, but Tesla is not worried. The company has a distinctive and respected brand that they believe will survive the decision.
Tesla is an established luxury car, with the Model S costing anywhere from $60,000 to $70,000, and a performance model goes for more than $85,000.
The innovative car design boasts a quick, quiet acceleration from 0-60 mph in less than five seconds and internationally acclaimed safety features. There are almost no buttons inside the vehicle; instead, drivers use a 17-inch tablet to control temperature and make other adjustments. In 2013, it received the highest rating ever from Consumer Reports: 99 out of 100.
Tesla’s dedication to sustainable transportation is commendable, but its generosity will definitely impact the company’s profits. Car designs from competing manufacturers will create more competition in a previously isolated market, meaning Tesla will have to fight harder for its share.
If Tesla has its way, the auto industry’s combined efforts will create more affordable technology for typical car owners.
For example, charging stations need to be more widely available to accommodate the battery’s limited range. If other companies start making similar cars, they could be motivated to start putting up their own stations. Their contribution would only help Tesla make electric cars a viable transportation option.
An international corporation may be willing to forsake their patent, but smaller businesses have to work harder to compete. Patent infringement can cost you in lost sales, lost profits and lost consumer confidence. Fight back against infringers with an experienced lawyer on your side.
Klein Trial Lawyers has been specializing in business litigation for 25 years. Protect your patent by scheduling a free consultation with one of our skilled attorneys today.
[Did You Know: Tesla cars are inspected against a bamboo platform because “one can only see beauty framed against beauty”.]
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