Chinese Man Holds Tesla Motors, Inc Trademark Hostage; Rejects $2m Offer

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By Chris Hillman on July 28, 2014 Technology & Software

A frivolous lawsuit would not hinder Tesla from entering the Chinese markets, but would raise unnecessary time costly issues.

A Chinese businessman, who stated that it filed the Tesla Motors Inc (NASDAQ:TSLA) brand in 2009, filed a complaint against the American manufacturer of electric vehicles.

American electric vehicle manufacturer Tesla recently established in China, has protested Wednesday against a complaint from a Chinese businessman for “copyright infringement” and accusing him of having him simply “stolen” his name . Zhan Baosheng, who presents himself as the founder of a website based cosmetics in Guangzhou (south) in 2009 registered and trademarked the name “Tesla” with the Chinese authorities, according to financial newspaper Diyi Caijing.

Zhan Baosheng was offered 2 million yuan ($323,000) to surrender the trademark which he refuses. [Source: Sina.com.cn]

Corporate Trademark Hostage

This new lucrative practice effectively holds famous brand hostages, and participants hope for a quick settlement so that foreign companies can avoid expensive lawsuit fees. These quick settlement funds are minor to the foreign companies, and cheap compared to the expensive lawsuits they otherwise have to go through, but the payday for the perpetrator could feed an entire family for up to a generation where the average salary is 28,000 yuan ($4,755) a year.

Tesla offered 2 million yuan ($323,000) to buy over the rights since Chinese laws are always difficult and more sympathetic to the citizens within their borders. Tesla knows what they are up against and in 2013 asked the SAIC to cancel the trademark, which is still pending.

Mr. Zhan has also attempted to file the design of a logo in the shape of a “T” and the term “Tesla Motors”, but these requests are still pending, according to the newspaper. Considering only have the use of the mark ‘Tesla’ rights, Mr. Zhan has filed a complaint against the American manufacturer of the same name at a Beijing court, demanding that the firm group in China stop its exhibition spaces, loading stations and there continues its sales and marketing activities. The businessman also claims Tesla 23.9 million yuan of “compensation” (2.8 million euros), said Diyi Caijing.

His filing came three years after Tesla has already been established.

Tesla who has started in the spring in China to promote its Model S electric-battery and has protested Wednesday against the lawsuit by Zhan Baosheng, claiming that themselves have filed two complaints against the businessman. “Nobody can legitimately challenge the fact that Tesla was created and used these brands very long before Mr. Zhan,” said Tesla in a statement. “It follows that the complaint is without merit,” said he said, adding that two Chinese authorities had already canceled previously Zhan right to control the name of Tesla.

According to the manufacturer, its activities are not disrupted in China – the number one automobile market in the world, but that sales of electric vehicles are still in their infancy. Tesla had to face the fury of some of its customers after some delays in shipments of controlled vehicles. Desiring to promote an increase in the production of electric cars in the world, Tesla took the initiative in June to share its patents with its competitors – a rare decision in this industry.