Tesla Motors Inc (NASDAQ:TSLA) is seeing tremendous growth overseas, but there are a few issues to deal with in China. The company is dealing with trademark issues and incentives that favors locally built electric cars. Tesla Motors Inc (NASDAQ:TSLA) has received hundreds of orders for the Model S in Hong Kong, but they are also dealing with a “trademark troll” in China. A trademark troll is considered a person that registers company names in anticipation of selling it back to them for a high price when the company enters that market.
Tesla Motors Inc (NASDAQ:TSLA) has been in litigation for their name in China since 2009. Zhan Baosheng bought the “Tesla” trademark in 2009. Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk said that the company made an offer to buy it from him for two million yuan ($326,000). However, Baosheng wanted the equivalent of $32.6 million. Tesla Motors Inc (NASDAQ:TSLA) was able to buy the trademark “Tesla Motors” on May 6, but that name cannot be used for finished automotive products for legal reasons.
Tesla Motors Inc (NASDAQ:TSLA) could make an argument for the “Tesla” trademark in court because Baosheng has not used the name since he registered it in 2009. Baosheng also has yet to prove that he develops products related to electric vehicles.
Apple dealt with a similar issue in China for the iPad. In the case of the iPhone/iPad maker, Apple ended up forking over $60 million to Proview to buy the “IPAD” trademark. Apple tried to fight the trademark issue in court for two years, but came out empty-handed.