Trademark Barriers for Tesla in China

By Joseph Mandour on August 14, 2013

Chinese FlagLos Angeles – Electric car manufacturer Tesla Motors, Inc. hit a roadblock in its attempt to trademark its name in China, when it discovered that the trademark for “Tesla” has already been registered.

Started by Elon Musk, the founder of PayPal, Tesla has grown dramatically due to the success of its luxury line of electric cars.  Its goal is to expand internationally, which includes introducing a flagship store in Shanghai.

Zhan Baosheng obtained the trademark for “Tesla” in 2009, specifically for vehicles, ranging from passenger cars to planes and marine transportation vehicles in twelve different classes.  As a result, Tesla’s application to trademark its name for its innovative electric cars was rejected by Chinese officials in light of Zhan’s prior registration.

Tesla has reportedly offered to buy the “Tesla” trademark from Zhan for $326,000, but he has demanded more than $30 million for the rights to the name.

The electric car company has the option to challenge Zhan’s trademark due to lack of use for the last three consecutive years.

Tesla has already settled a trademark dispute over the trademark for “Tesla Motors” in China, which was originally held by Qiao Weiwei.  The California-based car company was able to purchase the rights to this trademark from Qiao on May 6.

While this registration covers trains, planes and ships, it does not include automobiles.  Tesla would still need to expand protection for this trademark to cars so that it could begin to distribute its all-electric automobiles in China.

The luxury car company is also having difficulties obtaining a domain name for use in the Chinese market.  Both website names, Tesla.com.cn and TeslaMotors.com, have already been registered by others in China.

This is not the first time a major American company has been blocked from obtaining a trademark registration for its name.  In 2010, Apple faced a similar fight in China for rights to  the name “iPad,” and ended up settling with Chinese electronics company, Proview, for $60 million.

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