Tesla reaches settlement with Chinese “trademark troll”

| Aug 14, 2014 | Trademark Law

Electric car manufacturer Tesla has recently settled a lengthy legal battle regarding the trademark of the company’s name with the owner of the trademark, a Chinese businessman. As part of the settlement, the owner agreed to waive his right to the Tesla name (a de facto pass to allow Tesla use the trademark without restriction for marketing and sales purposes), and Tesla agrees to withdraw claims against the owner seeking compensation. 

The Chinese trademark system is different from the American one in many ways, the most telling being that, in China, trademarks are registered on a “first-come, first-served” basis. That approach means that trademarks are often given not to those with the most vested interest in the name, phrase, title or product at issue, but those who were fastest getting the registration submitted. Other big name companies like Apple and Microsoft have faced similar difficulties with Chinese trademark holders. 


Now that the trademark dispute appears to be settled, most auto industry and business analysts suspect that China will become a booming market for Tesla’s electric vehicles. The Chinese government has publicly admitted its plan to dramatically reduce the amount of smog and pollution developing as a result of the country’s rapid economic growth in recent years, and electric cars will fit nicely into their efforts.

At the moment, the only thing standing in the way of a full-scale Chinese roll-out of Tesla products is the lack of infrastructure. Many areas of China were, until recent years, agrarian in nature, and they lack the type of power grid necessary for charging numerous electric vehicles. Even so, Tesla is optimistic about the impact that their vehicles will have on the nation, and remain confident about the economic success of their brand in China.

Source: SF Gate, “Tesla sees brisk China sales after settling name dispute,” Bruce Einhorn, August 7, 2014.