Yesterday, Harvard Business Review published a click-bait article entitled “Elon Musk Doesn’t Care About Patents. Should You?” Needless to say, this title grabbed my attention (the click-bait mission accomplished). The content of the article is just as nonsensical as its title. The article proposes that legal ownership of intellectual property is an antiquated concept. The authors argue that instead of securing and enforcing their IP rights, tech companies should “lean into ambiguity.” At one point, the article asserts that “legal clarity is not always that important.” Clearly, the authors have never been involved in litigation. As patent attorneys on the frontline of the technological boom, we can confidently assert that, in 2021, patents are more valuable than ever.
Elon Musk does care about patents
First thing’s first: the title of the Harvard article is factually wrong. Elon Musk does care about patents. In fact, we recently wrote an article about how, during early startup stages of Tesla, Elon Musk relied on Tesla’s patents to secure the retail space for Tesla’s iconic first showroom. Furthermore, in direct contradiction to the absurd notion of “embracing ownership ambiguity,” just a few months ago, Tesla sued its competitor Nikola for trade secret theft.
Moreover, a quick Google search reveals that Tesla Motors has amassed an expansive patent portfolio. Our managing partner–Anton Hopen–often lectures university students and fellow attorneys about the value of design patents. Tesla’s design patent strategy is one his favorite examples. Finally, in addition to patenting its own innovation, Tesla often licenses patented technology from other companies (including our clients). Simply stated, patents matter, even to the world’s most value automotive company.
Intel hit with a $2.2 billion patent infringement verdict
Next, the Harvard Business Review article asserts that legal ownership of intellectual property is unimportant. NPX Semiconductors and VLSI Technologies would strongly disagree, to the tune of the $2.2 billion judgement they received this week. In that case, Intel infringed two semiconductor patents that were purchased by VLSI Technologies from other semiconductor companies. So, legal ownership of patents does matter. Indeed, successful patent infringement lawsuits can yield damages awards unthinkable in any other type of litigation.
Amazon makes patent enforcement affordable
Finally, there is a perception that patent enforcement is an extremely expensive and prolonged endeavor. Although this may be true for traditional litigation, alternative patent enforcement methods are a gamechanger for smaller companies. For example, Amazon Neutral Patent Evaluation process enables patent holders to quickly and efficiently shut down infringing Amazon listings. Thus, our clients who operate in the consumer-product sector effectively uses their patents to eliminate knock-offs from Amazon.
Sad to see a respectable publication like Harvard Business Review go down the click-bait path. But facts do not care about opinions of click-bait journalists. As patent attorneys, we can confidently say that legal ownership of IP assets matters and that “leaning into ambiguity” is an excellent strategy for running a tech company into the ground. There is a reason why intellectual property accounts for almost forty percent of our nation’s GDP. The golden age of IP is just beginning.