Telsa Opens Patent Portfolio to Spur Electric Rivals--2ed Update

By Dow Jones Business News, 
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Telsa Opens Patent Portfolio to Spur Electric Rivals -- 2nd Update


By Mike Ramsey

Tesla Motors Inc. is offering the proprietary technology at the heart of its Model S electric car to any company that wants to build vehicles, and its chief suggested BMW AG already is interested in sharing certain patents.

Chief Executive Elon Musk said in an interview on Thursday the offer is intended to help spur wider development of electric vehicles. Mr. Musk said one topic discussed with BMW executives was sharing Tesla's technology for rapidly recharging batteries, part of the company's "supercharger" stations.

The Palo Alto, Calif., maker of $71,000 and up luxury electric cars decided to offer open access to Tesla patents out of frustration that electric vehicles remain less than 1% of new cars and light trucks sold each year.

BMW couldn't be reached for immediate comment.

Mr. Musk also hinted at another reason for the offer: achieving greater economies of scale. For example, Tesla's patents for its vehicle Supercharging stations could be shared with other auto makers, which could help Tesla spread costs and more quickly make more stations available.

More manufacturers should use small battery cells, as Tesla does, Mr. Musk said. "That would be one thing I would recommend." He has outlined plans to build a large battery factory, which he calls the gigafactory, to produce more battery packs in the U.S.

Tesla has "several hundred" patents related to all areas of its electric vehicles, Mr. Musk said, including batteries and electric control systems. Tesla isn't worried a competitor could use its patents to undercut the company, he said.

"We wouldn't someone to mimic our car to...trick people into thinking it's our car when it's not," Mr. Musk said. The company expects to continue to file patent applications, but won't enforcing its patents.

"If a company is truly relying on patents it means they aren't innovating, or not innovating fast enough," he said. "But this can be of some modest help to others."

Mr. Musk said he initially received some "wide-eyed looks" from members of his board of directors and other managers. He said open sourcing its technology can help attract top engineering talent who want to see their inventions spread and not just be bottled up into one company.

"This is actually good for Tesla and the electric vehicle industry. I really do believe that," he said.

Mr. Musk teased Thursday's announcement as a controversial move. But after promoting his decision, he described it on Thursday as "a modest thing." Patents, he said, shouldn't be so important. "You want to be innovating so fast [that] you invalidate your prior patents."

The auto industry has had its share of epic intellectual property fights, including a battle in the industry's earliest years over who held patent rights to the idea of the automobile. During the 1970s, General Motors Co. shared its breakthrough in developing the catalytic converter, which scrubs smog-forming pollutants out of exhaust.

Write to Mike Ramsey at michael.ramsey@wsj.com

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This article appears in: Technology

Referenced Stocks: TSLA

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