Tesla Faces Trademark Issues With "Model E" In U.S. and "Tesla" in China
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 teslamotors.com.cn 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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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.
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?