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Previous posts (here, here, and here) discussed Tesla’s trademark troubles in China.
As it sought to expand into the Chinese market, the electric car maker encountered a businessman named Zhan Baosheng who owned registrations for the TESLA (or “Te Si La” transliterated) trademark in China in both English and Chinese.
While Zhan’s trademark rights initially blocked Tesla from using the mark there, in early 2014 the company announced that it had resolved the matter though a court decision granting it the right to use the TESLA mark in China.
So Tesla seemed to be in the clear until Mr. Zhan, apparently unsatisfied, decided to sue Tesla for trademark infringement. He seemed to be in it for the money: the lawsuit demanded that Tesla stop all sales and marketing activities in China, shut down showrooms and charging facilities, and pay him 23.9 million yuan ($3.85 million) in compensation.
It appears that Zhan finally got his pay day. Tesla recently said it resolved the dispute – this time via a direct settlement with Zhan rather than relying on the Chinese court system. The Bloomberg report says a Tesla spokeswoman “declined to discuss financial terms” relating to the deal.
Zhan agreed to settle the dispute “completely and amicably” including consenting to cancellation of his Tesla trademark registrations and applications. He will also transfer his domain names, including tesla.cn and teslamotors.cn to Tesla.
This is not the first time a U.S. clean tech company has faced IP difficulties in China – American Superconductor has been involved in major copyright and trade secret litigation with Chinese wind turbine maker Sinovel. Also, Apple and Burberry Group had difficulties with securing their trademark rights in China.
It would be interesting to know why Tesla’s initial Chinese court victory was inadequate and left the door open for Zhan’s subsequent lawsuit. One clear and timeless lesson we can draw from Tesla’s Chinese trademark troubles is that in China, as in legal and business disputes everywhere, money talks.
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