2014 Tesla Model S in China
Tesla is once again facing copyright issues over its name in China, up against a trend the industry knows as "trademark trolls".
When Tesla first made plans to sell cars in China, it came up against a businessman called Zhan Baosheng.
Zhan had trademarked the Tesla name for automotive back in 2006, three years after Tesla formed in the U.S. The trademark was granted in 2009, for a period of ten years.
He also set up a website, and trademarked the Tesla logo--hoping to profit from Tesla's inevitable decision to sell in the country.
For a time, Tesla considered using the phonetic name Te Su Le to sell its cars.
Baosheng eventually lost his trademark battle when a Chinese regulator sided with Tesla's claims that his trademarks were invalid.
Now, Bloomberg reports that Zhan is appealing that decision, and has filed a lawsuit requesting that Tesla cease operations in the country, shut its showrooms, service centers and charging facilities, and pay him $3.9 million in compensation.
Website of 'Tesla Motors China', Aug 2013
Tesla joins companies such as Apple and Burberry in being a victim of "trademark trolls", according to Hong Kong-based technology law partner Paul Haswell remarks.
These are people who watch brand development in Western nations and register their names and logos in anticipation of the brands eventually moving into Eastern markets.
The company actually contacted Zhan in 2012 with interest in buying the trademarks, for $50,000. It raised this offer sixfold in 2013, but Zhan rejected both offers.
Under Chinese law, trademark rulings become official when appeals end--so if Tesla wins its case this time around, Zhan will have to drop his case.
Chinese media reports suggest Tesla has sold around 1,300 cars in the countries in the quarter ending June 30. Tesla sales began in the country in late April.