— Jessica Gutierrez Alm, Attorney
Last week, a press release announced that Ford would “Open [its] Portfolio of Patented Technologies to Competitors to Accelerate Industry-Wide Electrified Vehicle Development.” Media outlets were quick to report that Ford was joining Tesla in opening its patent portfolio, referencing Tesla’s widely publicized promise last year not to enforce its patents. But Ford’s announcement is not quite as revolutionary as many media sources would have us believe.
Tesla was heralded last year for announcing an open source plan for all of its patents (“All Our Patents are Belong to You”). With its announcement, Tesla promised to allow anyone to freely use its technology in “good faith.” Tesla’s purported goal was the “advancement of electric vehicle technology.” Earlier this year, Toyota jumped on the bandwagon and announced at the 2015 Consumer Electronics Show that it would grant limited free licenses for several of its hydrogen fuel-cell technology patents. With this apparent trend of automobile manufacturers giving away patented technology, it’s no wonder many assumed Ford’s press release signaled the same.
Below are a few of the early media responses likening Ford’s announcement to Tesla’s earlier move:
- Engadget: Ford Joins Tesla in Opening up its Electric Car Patents
- DC Inno: Ford Follows Tesla: Makes Electric Car Patents Open Source
- Industry Leaders Magazine: After Tesla, Ford is Opening Up its Electric Vehicle Patents for Free to Competitors (The author of this article seems particularly confused, stating that Ford’s patents will be freely available to competitors… for a fee)
- and my favorite, Globe and Mail: Why Electric Vehicle Intellectual Property is Worthless
These and other headlines leave us with an impression that Ford is casting aside its greed-fueled patent rights in favor of a more communal approach for the betterment of all. Unfortunately (or fortunately, depending on your take), it’s not true. A closer look at Ford’s announcement reveals that the company is not at all following in Tesla’s patent strategy footsteps. Instead, Ford is offering a fee-based licensing system, which is exactly the way many companies leverage their patented technology. Citing lofty goals of innovation and industry-wide advancement, Ford is merely marketing the fact that it has electric vehicle patents available for licensing fees. While it is perhaps a step forward that Ford is explicitly offering to license its electric vehicle technology, rather than keeping it entirely off limits from competitors, and the company suggested that fees will be relatively low, the move is nothing akin to Tesla’s open source plan. If an unauthorized individual or company attempts to practice Ford’s patented electric vehicle technology, Ford will surely take action.
Much of the misconception in the media seems to stem from another false perception—that patented technology is secret. It’s understandable, given how secretive companies often are when it comes to new tech. But let’s be clear: patents are publicly available. The American patent system was developed on the notion that in order to receive a patent, an inventor must tell the world exactly how his new invention works. The very purpose of requiring a disclosure of the invention is to teach the world how to design around it, and thus promote innovation. Issued patents and published patent applications are available for free from the U.S. Patent and Trademark Office. They’re even searchable on Google. Anyone, including Ford’s competitors, can already access Ford’s patents and published patent applications. There may also be some confusion surrounding the difference between the patent document, which describes Ford’s patented technology (freely available) and the technology patented (Ford can exclude others from, or charge a license fee for, practicing its invention). While a competitor cannot make, use, or sell the patented invention without a license, competitors are free to design around the patented invention, or build on the invention with non-obvious improvements.
Later headlines reported a more accurate depiction of the announcement:
- Fortune Magazine: Why Ford’s Patent Announcement is Overhyped
- Techdirt: Ford Pretends to Open up Its Patents like Tesla, but Doesn’t; Media Falls for It
Indeed, as Fortune Magazine’s Kirsten Korosec suggests, the most striking aspect of Ford’s announcement may be the very last line of the press release. Slipped in almost as an afterthought, the announcement states that the automaker intends to hire 200 electrified vehicle engineers this year, signaling what may be a shifting focus for the company.