Tesla, Who Famously ‘Freed’ Its Patents, Sues For Patent Infringement (But… It Kinda Makes Sense)

People accuse me of unfairly bashing Elon Musk, but I’ve always highlighted the things he’s done that I thought were smart as well, and a big one was his decision nearly a decade ago to free all of Tesla’s patents. The company put out a blog post, saying that anyone could use its patents, and that Tesla would never initiate a patent lawsuit. We’ve been happy to see him continue to stand by this position over the years.

Musk’s rationale for doing so was exactly correct: patents tend to hold back innovation in many cases, especially in innovative and emerging markets, such as electric cars. That’s because whoever gets to the patent office first might not actually be the best at building a product that users want, and to really drive the market forward, letting everyone try to build better products for users is the most important driver of innovation and overall consumer welfare.

Patents stop that, by saying only whoever made it to the patent office first is allowed to innovate.

Obviously, Tesla has held a somewhat commanding lead over the EV market over the last decade, but with a bunch of new EVs coming on the market, combined with Musk’s seeming infatuation with suing others, I wondered if the pledge would stand. So it caught my attention when I saw that Tesla had sued an Australian supercapacitor company, Cap-XX, for patent infringement. The patents came to Tesla when it purchased Maxwell Technologies a few years back.

So, at first I worried that this was Musk going back on his word. However, the company claims that this is actually a response to Cap-XX’s own patent lawsuit against Maxwell that goes back to around the time of Tesla’s purchase of Maxwell. Remember, the Tesla promise was simply that it would not initiate infringement lawsuits. If it’s just suing a company that is already engaged in a patent infringement lawsuit against it, the situation is a bit more understandable and reasonable, and is more akin to the frequent belief in Silicon Valley of mostly using your patents defensively, rather than offensively (basically collecting patents to say that if someone sues you for patent infringement, you’ll sue them right back, in hopes of deterring the initial lawsuit).

That said, it’s not clear why Tesla waited around four years to hit back with this lawsuit, and it will be interesting to see if Cap-XX tries to use Tesla’s patent pledge in court against the company. Some could argue that a full patent disarmament would entail never suing over patents at all, but given the circumstances, I think this move is mostly understandable.

However, it’s still worth watching to make sure Tesla doesn’t go back on the full patent pledge in the future.