SHANGHAI, July 8 U.S. electric car maker Tesla
Motors Inc 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
, Koninklijke Philips NV and Unilever NV
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
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
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 Inc 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.
($1 = 6.2010 Chinese Yuan Renminbi)
(Reporting by Samuel Shen and Adam Jourdan)