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7 August 2014Trademarks

Tesla settles trademark dispute with Chinese businessman

Electric car maker Tesla has reportedly settled its trademark dispute with a man who held the rights to the name in China.

The “amicable” settlement, which comes “at no cost”, follows two lawsuits in which both parties sued each other, claiming millions in damages.

Announced today (August 7), the settlement sees Zhan Baosheng give up his trademark rights while Tesla will drop its compensation demands in return.

Zhan, a businessman based in Guangzhou and founder of a cosmetics website, registered the trademark “Tesla” across a range of classes, including cars, in 2009.

The carmaker sued Zhan last year, claiming it was due 4.2 million yuan ($682,000).

But Zhan hit back in July this year, accusing Tesla of trademark infringement.

Suing at the Beijing Third Intermediate People’s Court, he demanded 23.9 million yuan ($3.85 million) in damages.

It is the second time Tesla has announced a settlement with Zhan; in January it claimed the issue had been resolved but Zhan then launched his lawsuit later this year.

This time Tesla said the dispute had been "completely and amicably" resolved, according to Yahoo.

"Collectively, these actions remove any doubt with respect to Tesla's undisputed rights to its trademarks in China," it said.

The firm has also agreed to buy domain names including tesla.cn and teslamotors.cn from Zhan but would not disclose the price.

Zhan has so far not commented on the settlement. His Twitter account still describes him as “the owner of the Tesla trademark in China”.

Applying for a trademark for a name in anticipation of its forthcoming popularity is known as ‘trademark squatting,’ and has become increasingly popular in China in recent years.

Last year, WIPR  reported that French wine producer Castel was forced to pay Li Dao Zhi and his company, Shanghai Banti Wine, $5 million following a court dispute.

Castel had been using the words Ka Si Te, a Chinese transliteration of Castel, for its marketing in China. However, it failed to register it as a trademark, allowing Li to register the mark himself.

Three years ago, Apple was also forced to pay a company called Shenzhen Proview Technology a reported $60 million to relinquish control over the trademark for iPad.

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