Tesla battery patents further proof of Elon Musk’s duplicitous views on patents

By Steve Brachmann
May 11, 2017

“Elon Musk Closing the 2016 Tesla Annual Shareholders’ Meeting” by Steve Jurvetson. Licensed CC BY 2.0.

The early spring has certainly been quite sunny for Palo Alto, CA-based automaker and energy storage company Tesla Inc. (NASDAQ:TSLA). On Monday, April 5th, The New York Times reported that Tesla had surpassed Dearborn, MI-based automaker Ford Motor Company (NYSE:F) in terms of market capitalization, pushing past Ford’s $45.6 billion market cap to hit a $51.2 billion market cap. The following day, shares of Tesla passed $300 per share after having gained 20 percent over the past few months alone. As of the writing of this article Tesla shares sit at an impressive $323.79. 

Analysts and financial journalists alike continue to point to tremendous upside at Tesla, which goes beyond the company’s ability to produce a high quality electric vehicle. On February 1st of this year, Tesla filed an 8-K with the U.S Securities and Exchange Commission (SEC) in which the company officially dropped the “Motors” from the Tesla name. The global economic magazine Quartz noted that this move follows a plan outlined by Musk in 2006 in which the Tesla CEO said the company would invest profits from car sales into solar electricity systems. This plan has unfolded in interesting ways over the past few years, including the company’s 2015 introduction of the Tesla Powerwall home battery as well as the $2 billion acquisition of rooftop solar developer SolarCity last November.

A couple of articles published by green energy news outlet Electrek identifies moves Tesla has made in recent years to protect its growing activities in the energy sector, especially where batteries are involved. One of the Electrek articles identifies U.S. Patent No. 9559532, titled Charge Rate Modulation of Metal-Air Cells as a Function of Ambient Oxygen Concentration. Issued this January, it protects a method of charging a metal-air battery pack mounted within an electric vehicle which more effectively charges batteries in extreme temperature conditions or in large battery applications. Another Electrek article discusses U.S. Patent Application No. 20170074918, titled Methodology for Charging Batteries Safely. It discloses a fault-detection apparatus for a charging system which charges a collection of interconnected battery cells in such a way that identifies the presence of a short circuit in a battery pack.

These intellectual property assets appear as though they cover some fairly valuable technologies, ones which will become even more important to Tesla as it moves away from vehicle production and towards energy storage solutions. One does have to fear for the jobs of these engineers, however. I mean, seeing as these innovators simply bought tickets to lawsuits, one would have to assume that Musk would want to tie off that risk and probably terminate those employees.

Yes, that’s an absurd line of thinking, but one which makes sense within the context of Elon Musk’s previous blather about patents. Musk himself thinks that patents are a legal liability, or at least that’s what he wanted the public to think in a post published in June 2014 on Tesla’s official blog:

When I started out with my first company, Zip2, I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors. After Zip2, when I realized that receiving a patent really just meant that you bought a lottery ticket to a lawsuit, I avoided them whenever possible.”

This comes in the same post in which Musk assures the public that, should they use Tesla’s patented technology to innovate in the electric vehicle space, Tesla would not assert those patents against the innovator. And yet, despite Musk’s assurances that he avoids patents “whenever possible,” Tesla continued to obtain patents in the year after that post went online. One doesn’t just trip and fall into a patent grant, it has to be actively obtained and the application filing and prosecution process isn’t cheap.

Why the misdirection? It’s not as if Musk doesn’t have the power at Tesla to actually cease all patent filing activities if he truly did believe that patents were just tickets to lawsuits, and he doesn’t seem like the masochistic type who treasures the thought of being dragged through court. Maybe it’s because it makes great business sense to give away something for free if it ensures a consistent customer later down the road. Musk’s patent free-for-all was designed to get people to produce more electric vehicles, vehicles which would probably use batteries produced by Tesla. It was a brilliant business strategy no doubt, but thinly veiled and duplicitous when he made it about patents instead of consolidating his empire. Tesla stands to reap billions from the sale of those batteries to other carmakers

So is this a case of an engineering team gone rogue within Tesla? That also doesn’t seem to be the case given the inventors listed on the IP assets. As the Electrek coverage notes, the ‘532 patent lists JB Straubel, Tesla co-founder and chief technical officer (CTO), as an inventor. The ‘918 patent application lists Kurt Kelty, director of battery technology at Tesla, as an inventor. It’s doubtful that people so high up within the organization are acting without the knowledge of Musk. 

Moral of the story: You cannot take what Elon Musk says about patents at face value.

Like so many other critics of the patent system, Musk seems to despise all patents except for his own. Of course, Musk never said he avoids patents altogether, just whenever possible. But if you look at his enterprises, including Tesla, it is hard to detect evidence of patent avoidance of any kind at any time. So when Musk speaks on patents it is nothing more than encouraging people to do as he says not as he and his companies do for themselves. I guess you might say that Elon Musk doesn’t like other people’s patents, but his are perfectly OK.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 25 Comments comments.

  1. Renier De Jager May 11, 2017 6:48 am

    From the Tesla website:

    “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. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.”

    Ever heard of patent trolls? By open sourcing the patents no troll can sue Tesla or prevent Tesla from using their own technology or no staff member can resign, patent technology and then sell it to a competitor ala Waymo – Otto – Uber.

  2. Night Writer May 11, 2017 8:03 am

    So, no patents as long as you cannot practice the invention without a $1 billion dollar factory, and as long as your inventions are incompatible with competitors.

    Come you Tesla defenders. You have come running to Elon’s defense before. Let’s hear your side.

  3. Valuationguy May 11, 2017 8:57 am

    Musk is at essence a REALIST in that he looks at the environment and gauges his actions based on what he sees.

    Yes, he is a expert con artist…but he correctly recognizes that CONNING people is they way to get ahead in today’s markets. (When corruption rules….the corrupt prosper.) His 2014 quote demonstrates that he understands that the courts have fundamentally changed and are not upholding the prior understanding of the patent contract between gov’t and the patent owner. Part of this is his education regarding efficient infringement by Prof Mark Lemley of Stanford….who has successfully preached his (paid for) message to all the Silicon Valley tech giants…and who in many respects comprise the circle of Musk’s core relationships.

  4. angry dude May 11, 2017 10:08 am

    As a public company Tesla must disclose the total value of patents and other IP in their balance sheet as intangible assets

    What dollar number do they list now ? Anyone ?

    It’s certainly not zero and it affects the stock price a lot

  5. AFAJFJAFAAF May 11, 2017 10:11 am

    “After Zip2, when I realized that receiving a patent really just meant that you bought a lottery ticket to a lawsuit, I avoided them whenever possible.””
    “And yet, despite Musk’s assurances that he avoids patents “whenever possible,” Tesla continued to obtain patents in the year after that post went online.”

    Because the very next sentence of his blog reads “At Tesla, however, we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. ”

    So Musk said, basically, “I avoided patents after Zip2, but at Tesla we do patent things for reason X.” And your grand criticism of his is: “TESLA IS PATENTING THINGS WHAT A LIAR!!”

  6. Gene Quinn May 11, 2017 10:14 am

    Renier @1-

    Thank you for your most ignorant comment! It is always wonderful to get one of Musk’s fanboys defending him without any knowledge of the topic whatsoever. Your blind loyalty is commendable!

    To educate you, Tesla doesn’t need to get any patents to stop others from suing them for patent infringement on what they do. America is a first to file country, which means if something is disclosed publicly before a patent application is filed then no one else can obtain a patent. So Tesla and Musk don’t have to get patents, they just have to publish the information on their invention and that would prevent anyone from ever getting a patent on those innovation. Now I realize Musk lies about this and claims he must get patents or he risks letting others patent his inventions, but that is simply false and if you have any interest in informing yourself about the truth it is easy to verify what Musk is saying is untrue. Furthermore, the fact that Musk and Tesla have patents would not help them if a patent troll were to come knocking because there would be nothing to countersue because a patent troll doesn’t make or sell anything. So Musk’s entire rationale for why he “must” seek patents is a lie. Either he is the most ignorant and uninformed billionaire in the world (which I don’t believe) or he is purposefully lying in order to misdirect the narrative. Sad that folks like you blindly follow his falsehoods without verification.

    -Gene

  7. Gene Quinn May 11, 2017 10:30 am

    AFAJFJAFAAF-

    Thank you for point that out. You are right. Musk’s position on patents are that other people’s patents are the problem, but that he has to obtain patents because they are necessary.

    Of course, that doesn’t explain why he has lied when he says that patents are necessary to prevent patent trolls and others from patenting his technology. That is simply false, as explained above.

    So I guess our conclusion remains correct, huh? Musk’s position is that patents should be avoided at all costs unless you need strong property rights. But wait, that’s the reason to get a patent and why investors demand them, huh? Duplicitous seems perfectly fitting for Musk’s position on patents. Sorry you don’t like that, but it is what it is.

  8. Gene Quinn May 11, 2017 10:35 am

    Another thought to all the Musk fans…

    Not sure why even Musk’s most ardent fanboys can’t understand his views on patents are at least irrationally erratic if not duplicitous. If he felt compelled to obtain patents because of the larger car companies then why did he open his patent portfolio up and pursue open sourcing? Spending all that money on obtaining a patent portfolio only to then open the portfolio up is a huge waste of shareholder resources.

    Obtaining patents is not necessary to prevent others from obtaining patents, as Musk has incorrectly stated in the past. All you have to do is publish the information and no one can obtain a patent. So either: (1) Tesla and Musk have some other plan and they are not being honest (likely); or (2) they are extraordinarily ignorant and completely unfamiliar with the law and are pursuing a business strategy that is wasting shareholder resources.

  9. SMK May 11, 2017 11:14 am

    @8 Gene:

    I’m not familiar with the details of Musk’s filings and “opening up” his portfolio, but what is the jump in time worth? Publication happens at ~14month after filing or in a more extreme case at issue if a non-pub request is filed.

    Could it be that those time frames enable Tesla to promote a double standard when it comes to patents? In other words, “oh we don’t get or enforce patents” but they block others from doing so and do it in a way that “buys” time? If he simple published the information, straight up, others would be able to react in near real-time. Numerous examples in the last 10 years show that a year or two can make all the difference in the world in cornering market share and advancing technology. His/their calculus could be that the money spent on a headstart is not wasting shareholder resources (particularly not when every schmoe in America is willing to invest in the company, driving up the available resources of the company with an utterly insane market cap).

    Just a thought.

  10. Stanley May 11, 2017 11:16 am

    “Moral of the story: You cannot take what Elon Musk says about patents at face value.”

    Close, but not quite. The real moral of the story is that you cannot take ANYTHING Elon Musk says at face value.

  11. AFAJFJAFAAF May 11, 2017 11:18 am

    “Of course, that doesn’t explain why he has lied when he says that patents are necessary to prevent patent trolls and others from patenting his technology. That is simply false, as explained above”

    Gene, as a practicing patent attorney you are certainly aware that examiners search patent databases much more thoroughly than non-patent literature. If something is published as a patent or patent application, it is much more likely to be uncovered during prosecution than non-patent literature. Yes, technically Tesla could file things in non-patent literature and shouldn’t have to worry. But practically, it is much more effective to disclose as patent applications so that patent examiners will be likely to uncover it. You know this.

    Now, they could get patents and not pay the maintenance fee, which is how some other major automotive companies handle IP.

  12. Gene Quinn May 11, 2017 11:56 am

    AFAJFJAFAAF-

    Take a look at third party submissions please. If Musk and Tesla wanted to prevent others from obtaining patents there are MUCH cheaper ways to do that than filing and obtaining patents. Spending many tens of thousands of dollars to prepare, file and obtain a single patent, and then spending another $10,000 or so for the life of a single patent to maintain it, is wasteful if you are going to open source your patents. It is wasteful, that is, unless there is another agenda altogether.

    If Musk/Tesla are interested in making sure others don’t receive patents on their technology they should hire me and my firm. I’d be able to stop that for a small fraction of what he is wasting on obtaining and maintaining his patent portfolio. By publishing information and providing it to the patent office he could easily accomplish what he says his goal is. He doesn’t follow those known, easy, cheap paths. Therefore what he says obviously cannot be taken at face value. Either he is lying or he is horribly uninformed.

    You say: “they could get patents and not pay the maintenance fee, which is how some other major automotive companies handle IP.”

    That comment together with your previous comments suggest you really don’t understand the issues. Why get a patent in the first place? You claim that examiners search patent databases much more. Why not just file patent applications then to make sure that the information is in the patent database and then expressly abandons the application? That would save all the attorneys fees associated with prosecuting, and all the government fees associated with obtaining and maintaining a patent.

    You see, if you really understand patent practice you know there are better, cheaper ways to do what Musk says he wants to do. He doesn’t pursue those paths, so again the conclusion must be either he is lying or he is horribly ignorant.

  13. Gene Quinn May 11, 2017 12:01 pm

    SMK-

    My personal opinion of Musk is he is an extremely skilled businessman. His patent strategy is very smart. I did a quick search and found about 300 patents in the patent database, and that wouldn’t account for any patents Tesla might have bought after the fact. So obviously Tesla is not against patents, and neither is Musk.

    There are all kinds of reasons to get patents, and Musk seems to like the exclusivity, which is exactly what a patent is supposed to provide. The problem I have with him is he talks out of both sides of his mouth and his fans just take at face value all the incongruous things he says. If he wants to stop others then publish, don’t patent. If you are still concerned monitor patent publications and filed third party submissions. If you are still concerned then file applications so they get into the patent application database and then expressly abandon. Instead, he applies for and maintains patents, which based on what he says is his strategy is a clear waste of money. So there is a hypocritical disconnect. I have no problem with him getting patents and wanting exclusivity. My problem is with him misleading with respect to what he does, which hurts the patent system because people believe him and think patents are not necessary. Obviously, Musk thinks they are necessary. His actions do not match his words.

  14. AFAJFJAFAAF May 11, 2017 12:21 pm

    Gene,
    First, third party submissions are a US mechanism, while the US patent database would be searched worldwide. Further, as you know, third party submissions require constant monitoring of all published applications, some from companies that Tesla probably isn’t even aware of. There is no way a company in a space as big as Tesla’s would catch every application from every Joe-schmoe that may be in its field. Third party submissions are in NO WAY an effective replacement for defensive patents. Surely you can agree with this?

    Who says Tesla is going to pay tens of thousands in maintenance fees over the lifetime of each of these patents? They may just let them expire without paying the fees, a practice which is pretty common in at least one other major automotive company that gets defensive patents and generally doesnt pay maintenance fees for exactly this reason.

  15. Curious May 11, 2017 8:56 pm

    Like so many other critics of the patent system, Musk seems to despise all patents except for his own.
    A great line — worth repeating again and again and again. Of course, the line doesn’t apply to just Musk, as the line itself states.

  16. Jeff L. May 12, 2017 12:00 am

    If Tesla were simply trying to publish information to reduce the risk of others getting patents on the same, they could do what many large companies do and publish disclosures at IP.com for a pittance. That database is searched my many search authorities, not just the USPTO. Further, they could also publish copies of those documents on their own website for good measure. No need to pay tens of thousands of dollars to prosecute patents.

  17. SV Inventor May 12, 2017 12:08 am

    If we step back from Musk’s patent position, we see a founder whose strategy has been to line his pockets with public subsidies. He has taken the tax dollars of all to sell cars and space travel to the rich. The taxpayer dollars put into Tesla and SpaceX now exceed $5 billion, much of it through NASA.

    Through that lens, it makes more sense how Musk sees USPTO–not as a means for every inventor and founder to profit off their intellectual property, but for him to game the system. It remains to be seen whether he has done that by building a portfolio of defensive patents and saying he won’t defend them against anyone who wants to spend $1 billion to retool their factory and make imitation Teslas. How altruistic of someone who took $5 billion in public subsidies that should have been better spent by government.

  18. Adam jones May 12, 2017 9:06 am

    Think about it like this: Do you want Musk to have the patent or someone else who is less committed to open-source technology? It could be the case that Musk is securing patent rights only so that he has the exclusive right to indemnify any user of lawsuit risk. If I want my own technology out in the open and I want it to flourish, I had better get the patent then make a public commitment to open-sourcing that technology.

  19. Anon May 12, 2017 10:53 am

    Adam,

    You are not paying attention. The ability to remove the threat of a patent suit by another simply does not require one to obtain a patent oneself.

    Even if you do not know anything about patents, this clarity has been put forth several times now. If you care enough to comment, then you should care enough to comment after being just the slightest bit informed. Otherwise, you are likely to induce (and justify) the “fanboy” ad hominem.

  20. Gene Quinn May 12, 2017 11:23 am

    Adam-

    The problem with your comment is you are blindly taking everything Musk says about patents at face value and as if his comments are true. They are not. As I’ve explained over and over, Musk and Tesla do not need to obtain patents in order to prevent others from obtaining patents. I realize Musk disagrees with me, but he is wrong. There is no legitimate debate to be had here. Musk is wrong. All he has to do is publish the information about his inventions and no one could obtain a patent. As I’ve also explained, if he is worried the examiners might still grant a patent because the information is not in the patent database he could file that as a patent application and then abandon the application after it has published. That way he incurs no additional fees post filing, no additional attorneys fees, no issue fees, no maintenance fees. So if Musk is only getting patents to prevent others from getting patents he is unquestionably wasting precious shareholder resources.

    As I’ve said over and over in articles about Musk, I’m available to consult with him and Tesla to set up a far more cost efficient regime to effectuate his articulated strategy. Of course, we all know he would never seek out me or anyone else who could help him do that because his articulated strategy is not he real strategy. And that is why we continue to portray his positions as hypocritical.

    Either Musk is a hypocrite on patents or he is the most uninformed billionaire in the world. I personally think Musk is brilliant and an exceptional businessman, so I believe the former (i.e., hypocrite) not the later (i.e., ignorance).

  21. Trev May 14, 2017 8:59 pm

    Not a patent attorney but does the following hold any weight?

    1. Tesla patents and open sources. Condition being that any improvements by 3rd parties have to be disclosed and not further patented. Enforceable as it was a term of you using the patent.

    2. Doesn’t patent but discloses. 3rd party improves on design and patents their improvements. Tesla can’t do anything about it.

  22. Night Writer May 17, 2017 8:14 am

    @21

    The problem with 1 is getting people to agree to the “terms” of practicing the invention. Remember, the whole deal with a patent is that you disclose what you did to the public. So, everyone knows how to do it.

  23. Matt May 25, 2017 9:45 pm

    There may be a third thing that you are missing from running a corporation with a budget. There is obviously a patent attorney on staff with Tesla. Some people have to justify the line-item expenditure in their budgeted department. Or, as you suggest, he could open source an attorney to represent him on every little improvement on every single widget that is built for his car. He could contract with a law-firm each time one of these widgets is planned, evaluated, and implemented in the supply chain, which would be a horrible way to do business.
    I surmise that this may be a way of the patent attorney keeping himself on the payroll during a slow period rather than Musk having some nefarious plan to bilk the government by applying for patents.
    This article is a little too scatterbrain for me. Patent technology, being the head nefarious liar of Tesla, masquerading as the environmental guy while he is the antithesis of it…..because he has a rocket company is a little much to swallow in one article.
    Perhaps you don’t think Boeing or Lockheed are bilking the government out of billions either with their classified contracts with the government. Or would those CEO’s doe something like that?

  24. Gene Quinn May 26, 2017 10:13 am

    Matt-

    The difference between Boeing and Lockheed is that their CEOs do not talk negatively about the patent system and then keep applying for patents, which is what Musk does. Those CEOs also don’t misrepresent their patent strategies. As pointed out above, Musk is inaccurate when he says that Tesla must obtain patents in order to keep others from obtaining those patents. That is simply false, which means either Musk is uninformed but yet speaking about issues he doesn’t understand (which is the definition of ignorant) or he is misrepresenting for some other purpose.

    Two more thoughts. First, while Musk fans seem to think that we only point out his hypocrisy, we have spend much time pointing out the patent hypocrisy of Google, a company that is among the top 10 in acquiring patents in the world but which vigorously lobbies for policies that weaken the entire patent system including all of the assets they have paid many tens of billions to acquire and maintain. We also point out hypocrisy in many other places.

    Second, I have said over and over that I think Musk is a brilliant businessman. His patent strategy is very wise. He patents whatever he can so he can control the exclusive rights. When he opened up his portfolio it wasn’t because of any altruism, it was because Toyota had decided to stop buying his batteries so he needed other customers to fill orders for his battery manufacturing facility. It was genius to open his patents, but it was strictly a business play, not the altruism and anti-patent position that his followers made it out to be.

    -Gene

  25. Donald Martin June 11, 2017 6:31 pm

    Elon Musk’s whole statement is that he will open up his patents to anyone who will reciprocate. In other words, if Ford or GM want to use his electric car patents, they had better cross license their patents to him as well. Elon doesn’t want to be tripping over patents on small mechanical or electrical trivia like a trunk latch or automatic headlight dimming algorithm. All he is saying is that the automotive industry will be like the semiconductor industry with cross licensing agreements between major players. He just stated it in a way that makes him seem magnanimous.