Just when Elon Musk thought he had planned for a smooth ride into the Chinese market, Tesla Motors Inc. gets sued for trademark infringement by a local resident that registered the rights to the name back in 2009. Wrench!
Zhan Baosheng is requesting that Tesla pay him a whopping $3.9 million in compensation. He also wants Tesla to shut its showrooms, service centers and supercharging facilities and stop all sales and marketing activities in the country. Tesla is obviously not happy about Zhan’s request and is pushing to have the trademarks deemed invalid by Chinese courts.
Needless to say, this is likely going to get pricey for all parties. Tesla is a prime example of how brands face hurdles when entering a foreign market like China. Burberry and Apple also have faced uphill and expensive trademark battles in China, with Apple famously paying $60 million in 2012 to settle a dispute over the iPad trademark and Burberry currently battling to protect its trademark checkered pattern. It does not matter how big you are in the US, it’s definitely a different ball game when your brand looks to expand oversees. This goes for companies big and small.
Bottom line: Take note from the big players, just because your locally based does not mean you should not think about your international trademark strategy. Planning ahead with your intellectual property portfolio can save you time, money, and creative energy that is better spent on growing your business.