All large companies are plagued at some point in their lives by copyright claims and patent infringement lawsuits. For this reason, it comes as no surprise that Elon Musk’s brainchild Tesla, whose subsidiary Tesla Motors has been credited with bringing electric cars into the mainstream, is facing a lawsuit in China. 36-year old Zhan Baosheng sued Tesla on July 3, asking that the court force the car company to “shut its showrooms, service centers, and supercharging facilities [in China]; stop all sales and marketing activities in the country; and pay $3.9 million in compensation,” according to Bloomberg. So is it the Tesla Motors lithium-ion battery packs packed inside the Model S that Zhan is claiming ownership? Is it the Tesla supercharger, or the battery swap technology they debuted a few years back? Nope, it’s just the name “Tesla”.
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.