Tesla Strikes First Legal Blow In Patent Dispute

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Tesla Motors Inc (NASDAQ:TSLA) won’t wait around to be sued over a patent. It went ahead and filed its own court document first. The Recorder’s Chelsea Allison reports that Tesla has filed for a declaratory judgment stating that it doesn’t infringe on a patent owned by pointSET.

Tesla Strikes First Legal Blow In Patent Dispute

The Patent Tesla Is Accused Of Violating

PointSET apparently sent a letter to Tesla Motors Inc (NASDAQ:TSLA) at the end of April, proposing a licensing agreement. The company said it was offering a “one-time, fully-paid licensing flat fee of $500,000.”

The letter states that pointSET’s management wanted to wrap up a licensing agreement quickly, so it is extending the offer for a lower fee if the agreement is reached quickly. It also states that pointSET’s president and also Jerry Iggulden, who was one of its inventors, passed away recently, so the company has begun a review of its patent portfolio.

Tesla’s Declaratory Judgment Request

By seeking a declaratory judgment, Tesla Motors Inc (NASDAQ:TSLA) is filing to receive an official ruling which says that it does not violate any patent owned by pointSET. The patent in question relates to the technology which enables owners of Tesla’s vehicles to remotely adjust their vehicles’ temperatures.

Stanford Law School’s Mark Lemley told The Recorder that although it isn’t uncommon for companies to file for a declaratory judgment, what makes Tesla’s case different is that it is relying entirely on in-house counsel at this point rather than general counsel.

Eric Whitaker, the company’s previous general counsel, left Tesla in November, and the company has not yet named a replacement.  According to Lemley, filing for a declaratory judgment is riskier when relying only on in-house counsel like Tesla is.

Tesla’s Track History Regarding General Counsel

This isn’t the first time Tesla Motors Inc (NASDAQ:TSLA) has forged ahead with legal decisions without the use of general counsel. It went ahead with its initial public offering in 2010 without general counsel as well.

According to The Recorder, Tesla has focused historically on building its patent portfolio. Last year in its spring 2012 annual meeting, the company said it had received over 50 patents up until that time and that it had over 230 more patent applications that were still pending.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

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