TodayApril 16, 2022

A patent lawyer on open sourcing patents

Open Source Tesla’s patents

David Cabello is a partner at Wong Cabello Lutsch Rutherford, an intellectual property law firm. Cabello has been named Texas Super Lawyer in Intellectual Property Litigation for the last three years.

He also owns a Tesla.

Cabello talked to John Batchelor, host of the John Batchelor radio show, and Lou Ann Hammond, CEO, Driving the Nation about Elon Musk opening up Tesla Motorsports patents.

Some of Cabello’s thoughts on the Tesla open sourcing its patents were:

What do you think, as a patent lawyer, of Tesla open sourcing their patents?

That depends. Tesla hasn’t released the details or the terms under which the patents will be made available.

Tesla’s patents are a company asset that was acquired through significant investment by the company.

Tesla like any other patent owner should receive a return on that investment.

Tesla must keep it’s shareholder’s interests in mind as it moves forward with this program.

A royalty-free license would give Teslas shareholders no return on that investment.

Moreover, a royalty-free license may jeopardize the long-term viability of the Tesla supercharger stations.

Tesla has committed to building a network of supercharger stations and has further committed to charging Teslas free of charge.

Tesla will, therefore, make a significant capital investment in the network of supercharger stations and will have a long-term “energy” expense as more and more owners of Teslas stop to charge their batteries. If the owners of non-Tesla cars can charge their batteries free of charge (because the technology is open to them), Tesla will have an expense for which there is not a corresponding and offsetting revenue. The long-term expense of super-charging stations can jeopardize the long-term viability of the super-charging stations and consequently the availability of free “charges” for Tesla owners.

What are the pros and cons of open sourcing patents?

The pros are that Teslas leading technology becomes a standard in the industry. But standards need not be royalty-free. A standard can develop as long as it is offered on reasonable, non-discriminatory terms. At the bottom, if Tesla wants a standard to develop around it’s the technology it simply needs to tell the world that it is willing to make it available. I think that’s been done. What follows next, is at what cost? If the industry sees the cost as reasonable, then there is no need to develop competing technology.

The corollary here would be a gasoline dispenser nozzle that only supplied gasoline to Ford products. The industry would be poorly served if everyone had a proprietary nozzle. Certainly, there’s much more to charging but the concept is the same.

Listen to Cabello, Batchelor and Hammond talk about Tesla and its patents:

Lou Ann Hammond

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a founding member of the Women's World Car of the Year #WWCOTY, and board member of the Women in Automotive.