By on August 23, 2013

Chinese businessman Zhan Baosheng’s “Tesla” web site

Tesla Motors faces trademark issues in the United States and China as it tries to expand its lineup of cars and countries where it is sold. According applications found at the U.S. Patent and Trademark Office’s web site, on August 5th, Tesla filed three trademark applications for use of the name “Model E” in three categories, “automobiles and structural parts therefore,” automobile maintenance and repair services, and apparel. With merchandise sales being an important part of car marketing today, additional filings to cover apparel and similar logoed items are standard practice. Last year, Tesla CEO Elon Musk hinted at a Model E in an interview with Jalopnik, “There will definitely be more models after the S and X. Maybe an E :).”

Tesla may run into problems using Model E, though. Thirteen years ago, Ford Motor Company sued a company called the Model E Corp, claiming that it would cause confusion with Ford’s trademark on the name Model T. That case in a Michigan court was dismissed for lack of standing. Records at the USPTO show that Ford subsequently cancelled or abandoned applications for a trademark on Model E. Initially, when the news broke about Tesla’s applications, a Ford spokesman said that the Dearborn automaker would likely not challenge Tesla’s use. However, a later statement from Ford said that the company will review Tesla’s application and have no further comment on the matter at this time.

Tesla is also having difficulty entering the Chinese car market because a local Chinese businessman already secured rights to use the name Tesla in the world’s largest car market. Tesla Motors had hoped to open a company owned showroom in Beijing by the beginning of 2014, but that plan has now been delayed while they work out the intellectual property issue. The Tesla showroom has posters of the Model S, but no brand signs. A Tokyo-based Tesla representative said that the company had begun taking reservations for the Model S in China.

The “Tesla” trademark was registered in China to a Guangdong businessman named Zhan Baosheng in 2006, according to a trademark agency representing him, in both English and Chinese characters. Zhan also owns the domain name (and similar domain names) where he appears to promoting his own electric cars. Not only is he using the Tesla name and a Chinese-language slogan ‘Te Si La, Live For Electricity’, he’s also using the T shaped Tesla logo. Experts familiar with Chinese trademark issues say that Tesla may have no other choice than pay Zhan for the use of the name. According to published reports, the EV maker offered him $326,000, but Baosheng is holding out for $32 million. Last year Apple Inc. paid $60 million for the Chinese rights to the name iPad. As a backup plan Tesla has registered the name Tuosule, which phonetically reproduces their brand name.

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25 Comments on “Tesla Faces Trademark Issues With “Model E” In U.S. and “Tesla” in China...”

  • avatar

    I can’t escape the feeling that Tesla, like Fiat’s Jeep and Ford’s Lincoln, are trying to get into China about two decades too late. China’s amazing growth couldn’t last and has now been faltering, the country’s legal and financial transparency are non-existent, and most troubling, the new President is talking up a return to Maoism. In Wall Street speak, Ford, Tesla, and Fiat may be investing at the top of the market.

  • avatar

    If international copyright law was a fair and just place, US Tesla could go to court and point out that they were founded in 2003 and smack Chinese Tesla in the face for infringement, but unfortunately it doesn’t work that way… That could be a really bad thing, honestly. With the record safety thing just coming out, and all the praise that US Tesla gets for their vehicles, Chinese Tesla could easily just piggyback on that success and pretend like they’re the same thing while building a far inferior product. I forsee some headaches for Mr. Musk if they can’t get control of what is rightfully his brand name.

  • avatar

    It would some sense to name their vehicles after a scientist or engineer whom had significance in the development of electricity. Say a Tesla Maxwell, Tesla Faraday, or a Tesla Coulomb. Too bad Volt, Ampera, and Hertz are already taken.

    It would also set the stage for a Tesla Edison. Both would be turning in their graves…in the direction of the right hand rule. (groan)

    • 0 avatar

      Tesla/Westinghouse, so that we know had the IP contract stayed in place he would have been a billionaire in the age of millionaires…

      • 0 avatar

        In the world record for corporate screwing, Tesla has to be in the top 3. I’m hard pressed to think of anybody who’s vision changed the world as much as his work.

        Thomas “Edistone”, you know the guy who invented the candle and who bet on DC, was wrong and Tesla was right.

  • avatar

    I do wish Tesla the best. Especially since they hold a very unique position in the market place and also since they are an American car company.

    The only electric luxury automaker in existence. And on top of that they make a very cool car.

  • avatar

    I think it’s too easy to get wrapped up in the supposed value of a brand name. Some products have their primary value in their intellectual property and are easily stolen or reverse engineered. But a good automobile has quality that is not easily copied. A person who wants a genuine Rolex watch knows what they’re buying and why they’re paying $10 to $20 thousand: for a product, not a name. The same is true of a Porsche or a Bentley or a Ford F-150. Whether Tesla can use the same name in China seems of minor importance as long as their customers know what they’re buying.

  • avatar

    It can’t cost more than $326k to take out some Chinese guy, can it?

    Serious question though, why, at least to this laowai, does China seem to have a business culture built upon dishonesty and IP theft? What caused this?

    • 0 avatar

      China’s business strategy built on theft and copyright violations is no different than the Japanese or the Koreans. When you place conformity over individualism what you end up with is a group of people who cannot innovate as easily as they copy. They are extremely good with details and can easily copy all day long. Innovation has always been a Westerner thing because we are in direct competition with each other to improve or be phased out.

      I think the funniest thing for me was when I sold computers/cameras in Best Buy during college years and I noticed that the Chinese people never ever wanted to buy any product that was made in China. Americans really didn’t pay any attention to where things were made. The Chinese would go out of their way and spend as much money as possible to get products that were either made by Japan or made by America.

      • 0 avatar

        Mexicans with money are the same way, preferring made in America to hecho en Mexico wherever possible. We may have largely de-industrialized and sold off American nameplates to foreigners, but the American reputation for quality lives on in some places.

      • 0 avatar

        While to some extent you are correct, you are also grossly wrong; China became the empire it was BECAUSE of innovation. Gunpowder was unheard-of prior to traders making the long trek to China and seeing fireworks for the first time. Other products, too, came from China that had never been seen before in the rest of the ‘civilized’ world. Unfortunately, when the Communist Party took over the government back in the late 19-teens/early ’20s, nearly everything that had made China great was destroyed or off-limits. China–and to a more extreme extent North Korea–fought to suppress individuality and originality–except where it could be used to further their own platform. China is now emerging from that, not as a butterfly from a chrysalis, but rather a moth–ugly in its way, but still able to fly. Right now China reminds me more of the Bagworm–the males making a handsome moth while the females never grow wings of their own. (I’m not making a gender argument here, only pointing out that the Communist rule is still suppressing many of its people and that there are those who are “more equal than others.”) When–IF true equality ever comes to China, I believe we would again see original products coming from that country.

      • 0 avatar

        America did not just foster innovation and ingenuity out of thin air. We blatantly ignored European patents and trademarks during the Industrial Revolution. A good chunk of the space and nuclear programs was from Nazi research.

        No different than China, Korea, or Japan when the basis of much of our scientific and economic prowess stemmed from flat-out stealing other people’s ideas.

    • 0 avatar

      If you look at China’s communist history (from the mid’40s on), they haven’t been able to do much in the way of technology on their own. Not that they can’t, but that it is much, much easier (and cheaper) to copy what already exists. Nearly every one of their combat aircraft is a copy of a Soviet–or rather Russian-built fighter or bomber. The vast majority of their automobiles are ‘counterfeits’ of Japanese, Russian or American cars–or were until they decided to actually start importing them or having the brands actually manufacture there. The same is true for the majority of their other products too–either cheaper copies of products made for the rest of the world in China, or the real products now sold in China.

      They’re too new to the ‘modern’ Capitalist era to offer any product of their own on a competitive basis–yet. Their capitalization is currently one century behind the rest of the world as far as management is concerned. Labor unions that now protect workers in most of the modern world from management abuses simply cannot exist in China due to their still Communist government refusing to permit political gatherings of any kind, even when in protest to poor working conditions. In many ways China is a very unstable nation as it is experiencing a massive shift in its capital and political environment.

      For the moment, theft is simply easier than doing something original on their own. In some ways their environment is similar to that of Japan immediately after WWII, when the Allies put strong controls over what Japan could manufacture. Or rather, when many of those controls were finally lifted in the late ’50s. The difference is that they already had a manufacturing base to support themselves where China’s manufacturing was centered more on military products after the war. With the effective disappearance of their primary political rival–the Soviet Union–they no longer needed to focus on military manufacturing and those builders needed something–ANYTHING–to keep going. It became a game of copy or collapse.

      Now, add the fact that for the moment Chinese manufacturing labor is among the cheapest in the world AND the fact that much of American and other global manufacturing has been moved to this low-cost market, and you can see why continuing this ‘copy or die’ policy is so prevalent If someone even hints at a new idea anywhere in the world today, somebody in China will claim that trademark or patent in Chinese court. I would not be surprised that many of these documents are back-dated to pre-date the global trademark/patent, but there is little to prove that it is happening. It’s a suspicion that can neither be confirmed nor disproven. The only way around it is to simply avoid that market or attempt to fight the claims. Or, of course, pay off the thief. Since the Chinese courts tend to support their Chinese citizens, it’s pay off or move out. Or side-step them as Tesla appears to have done here.

      • 0 avatar

        There are news that Chinese manufacturing labor isn’t among the cheapest in the world any more or will not be soon. Many Chinese CEOs are aware of this. Some have already moved part of jobs out of China, in a same way 20 years ago when China was the place to move in.

      • 0 avatar

        Good detailed responses from you and BTSR, thanks.

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