Electric carmaker Tesla Motors Inc. may be forced to delay its planned expansion into the Chinese market after running into difficulty securing its trademark. A Chinese businessman claims to have secured rights to the “Tesla” mark as early as 2006.
According to Reuters, Zhan Baosheng owns the “Tesla” trademark in China, including both the English and Chinese versions. Zhan also operates a blog and website, which features a brand logo that closely resembles that of the American car company. However, the car pictured on the site bears no resemblance to the Tesla Model S. The website states that the company’s “dream is to build China’s best electric car.”
Tesla is not the first American company to face trademark trouble in China. Several high-profile U.S. companies, including Starbucks, Apple and Dell, have sought trademark protection in China only to discover that their marks have already been registered by an unrelated entity.
To avoid the costly process of regaining trademark ownership, companies need to be proactive. Since China has a first to file system, filing a trademark application will help prevent third parties from using your mark. Companies are also not required to use the mark in China for three years, which allows trademark registration to take place before official product launches are planned or distribution agreements are executed.
To achieve maximum protection, companies should not only register their U.S. brand name but also a Chinese equivalent. The Chinese version can take several forms, a transliteration, a translation, or even a distinctive Chinese mark.