A Chinese businessman is suing Tesla Motors for trademark infringement

Tesla Motors Inc., the electric carmaker led by Elon Musk, was sued in China for trademark infringement in the latest example of the difficulties foreign companies face doing business in the country. Zhan Baosheng, who registered the rights to the name before the U.S. carmaker entered China, is requesting that Tesla shut its showrooms, service centers and supercharging facilities there; stop all sales and marketing activities in the country; and pay him 23.9 million yuan ($3.9 million) in compensation, according to a lawsuit filed July 3 in Beijing and seen by Bloomberg News. Zhan is the one attempting to steal the U.S. carmaker’s property, Tesla spokesman Simon Sproule said in an e-mailed response to questions. The company, which has lodged complaints against Zhan to Chinese authorities and won, hasn’t been served with or seen the lawsuit, he said. Tesla’s shares fell 1.6 percent to $219.07 at the close in New York, and have gained 46 percent this year. The lawsuit would need to overcome a ruling last year in which the Chinese regulator sided with the U.S. carmaker’s claims that Zhan’s trademarks were invalid, though he’s appealing the regulator’s decision. For Tesla, maker of the Model S sedan, the experience puts it with Apple Inc. and Burberry Group Plc among multinational companies that have clashed over their branding rights in the world’s second-largest economy.