US company Tesla sued for trademark infringement

China

Tesla Motors Inc, a US company with a principal place of business in Palo Alto, California, manufactures electric cars. Tesla has recently been sued in China by Chinese businessman Zhan Baosheng. The basis for the complaint filed against Tesla is Baosheng’s allegation that he is the owner of the TESLA trademark in China.

Baosheng had registered the TESLA trademark in China in 2006, before Tesla entered the Chinese market. Baosheng then unsuccessfully attempted to sell these registered trademarks to Tesla. Nonetheless, Tesla believed that there was no dispute, and entered the Chinese market in April, delivering Model S sedans to customers in China.

Baosheng is demanding that Tesla stop all sales and marketing activities in China. In addition, he is requesting that all showrooms and supercharging facilities be shut down. Finally, Baosheng is demanding that Tesla pay him $3,850,000 in compensation for trademark infringement. This case will be heard by the Beijing Third Intermediate Court in August.

This is not the first time that a foreign company has had this type of problem when entering or attempting to enter the vast and ever growing Chinese market. Most notably, Apple had a similar issue with a Chinese party that had registered the IPAD trademark in China. In that case, a settlement agreement was reached for $60 million in 2012. 

It is hoped that Tesla will not run the same fate and will not have to pay a third party for the right to use its own trademark in the Chinese market.

Cristina Arenas Solis, Ferraiuoli LLC, Puerto Rico

Get unlimited access to all WTR content