Car maker Tesla sued in China for trademark infringement

SHANGHAI Tue Jul 8, 2014 5:23am EDT

A Tesla Motors logo is shown at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014. REUTERS/Robert Galbraith

A Tesla Motors logo is shown at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera, California May 8, 2014.

Credit: Reuters/Robert Galbraith

Related Topics

SHANGHAI (Reuters) - U.S. electric car maker Tesla Motors Inc (TSLA.O) is being sued in China for trademark infringement, a surprise development that casts a shadow over CEO Elon Musk's ambition to expand rapidly in the world's biggest auto market.

Tesla said in January that the trademark dispute between it and Chinese businessman Zhan Baosheng - long seen by analysts as a barrier to Tesla's entry into China - had been resolved. The car maker began delivering its Model S sedans to Chinese customers in April.

But Zhan, who registered the "Tesla" trademark before the U.S. company came to China, is now taking Tesla to court, demanding that it stop all sales and marketing activities in China, shut down showrooms and supercharging facilities and pay him 23.9 million yuan ($3.85 million) in compensation, his lawyer Zhu Dongxing said on Tuesday.

The Beijing Third Intermediate Court will hear the case on Aug. 5, according to a statement on the court's website. Tesla China declined comment. Zhan declined to be interviewed.

The case underscores one of the thorniest problems faced by foreign firms in China. Global companies including Apple Inc (AAPL.O), Koninklijke Philips NV (PHG.AS) and Unilever NV (UNc.AS) have all been embroiled in trademark disputes in the country in the past.

Zhan, who claims ownership of the "Tesla" trademark, has long been a headache for the Palo Alto, California-based car maker and in part contributed to Tesla's belated arrival in China.

Based in China's southern province of Guangdong, Zhan registered the trademarks to the Tesla name in both English and Chinese in 2006. He had in the past sought to sell the label to the U.S. company but negotiations collapsed.

In January, Veronica Wu, head of Tesla's China operations, told Reuters the company had resolved the trademark dispute that had prevented it from using "Te Si La", the Chinese name best known among Chinese consumers, which Tesla wanted to use in China.

Zhan's current lawsuit, however, brings new uncertainty to Tesla's fate in China, which the firm had expected to become its biggest global market next year.

Apple IncĀ was embroiled in a similar case for years before reaching a $60 million deal last year for the rights to use the iPad trademark in China.

(Reporting by Samuel Shen and Adam Jourdan)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (11)
willich6 wrote:
Extortion – pure and simple.. Next China will ‘steal’ the Tesla technology.. The country is a ‘bottom feeder’…..

Jul 08, 2014 9:20am EDT  --  Report as abuse
GreaterGood wrote:
Let me get this straight…. Someone in China is suing someone else for trademark infringement. In a country where foreign IP is openly stolen, some clown seems to think that the world should respect his trademark squat (call it as you see it)? Walk away Elon. You’re better off not allowing your technology into a country where they will merely re-engineer it.

Jul 08, 2014 9:35am EDT  --  Report as abuse
wims80 wrote:
Some sort of patent troll. Not exactly exclusive to China

Jul 08, 2014 9:46am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Track China's Leaders