Tesla Motors Inc (NASDAQ:TSLA) has been aggressive when it comes to building its company over the last 10 years to the point where it is free of government debt and is the darling of Wall Street and financial media. And not to mention those who have been advocating alternative-energy cars for the last few years. While electric cars are still in their infancy in a relative sense and thus stil very expensive to produce – never mind the hybrids – Tesla has been aggressive in its research and development to produce cars that go as much as 200 miles on a single charge. And word is there is still more of this innovation on the way.
In the process of its R&D work, Tesla Motors Inc (NASDAQ:TSLA) has developed a modest but important portfolio of 50 patents, and has applications pending more more 200 additional patents. But patent litigation can be very difficult, time- and money-consuming. And can you imagine going through some of this difficult and complex cases without a general counsel and relying on in-house attorneys to file your lawsuits and establish your defense? Based on other aspects of the company’s business model, Tesla is not afraid of being unconventional, and that certainly applies to patent cases, including one that Tesla is placing itself into – by being the first to file suit, not the one filing the response.
Tesla Motors Inc (NASDAQ:TSLA) received a letter from pointSET that was offering a licensing deal for a patent involving the ability for drivers to control the temperature of their cars by remote control. PointSET, which claims possession of the patent, offered in the letter to sell the license to Tesla for $50o,000. What is Tesla’s reaction? To file a lawsuit against pointSET, effectively saying that not only will the company not pay the licensing fee, but it will challenge the validity of the patent itself, saying that its technology does not match the pointSET patent “either literally or under the doctrine of equivalents.”
Global IP Law Group, the firm which posted the demand letter to Tesla Motors Inc (NASDAQ:TSLA), asked Tesla about its theory that it would use to prove noninfringement. The company refused to give it up. David Berten of Global IP said, “Hey, if you’ve got a good noninfringement argument, we’ll withdraw the letter. Our positions on this are pretty transparent. It’s a little bit of a head-scratcher why Tesla decided to do this.” A case-management hearing on this lawsuit is scheduled for September. What do you think about this approach by Tesla Motors Inc (NASDAQ:TSLA)? Do you think this can work out for the company in the long run, or is this too risky for a long-term legal strategy? Give us your thoughts in the comments section below.