Though Tesla recently announced it was unbolting its own trove of patents in the name of furthering electric vehicle technology, the company has just been smacked with a trademark lawsuit in China that could potentially deter its foray into the crucial car market.
Chinese businessman Zhan Baosheng registered the “Tesla” trademark in 2006 -- before the Palo Alto, Calif.-based company had ever ventured east. Today, Zhan’s lawyer told Reuters he is demanding that Tesla “stop all sales and marketing activities in China, shut down showrooms and supercharging facilities and pay him $3.85 million in compensation.”
Tesla, on the other hand, said in January that the dispute had been resolved, and began shipping its Model S Sedans to Chinese customers last April.
The case will go before a Beijing court on August 5.
In the past, Tesla was in talks to purchase the “Tesla” trademark from Zhan, though the negotiations eventually collapsed, Reuters reports.
The electric car-maker is not the only American company to be targeted by patent trolls in eyeing a Chinese expansion. In 2012, Apple paid $60 million to end a legal dispute with Proview Technology -- a Chinese company that had registered the “iPad” trademark.