Biting the Hand That Feeds You: Interpreting Tesla's Good Faith Patent Pledge
Laura K. Pedersen
Posted Saturday, July 16, 2016

In the summer of 2014, Tesla’s CEO and founder Elon Musk announced in a blog post that the company would not bring infringement suits against anyone who uses its patents. Other firms have made similar patent pledges, beginning in 2005 with IBM, Sun Microsystems, and Red Hat. But Tesla’s pledge is qualified: it only protects those who use its patents “in good faith.” “Good faith” is undefined.

Is Tesla’s patent pledge an enforceable contract? This Note argues it likely is not but can and should be. Specifically, courts should substantively define “good faith” as used in Tesla’s patent pledge to include all behavior except suing Tesla for infringement. This broad definition would mean that Tesla can only assert its patents against those who sue it for patent infringement but would allow other legitimate business activities. Constraining who Tesla can sue for infringement will be especially important given that widespread use of its patents could make it a de facto standard setting organization with considerable industry power.