Tesla Motors, Inc.
) recently settled a trademark issue in China with businessman Zhan
Baosheng, per media reports. This persistent problem had been
holding up the company's expansion plans in China.
Meanwhile, under the latest agreement, Baosheng will transfer
domain names which include tesla.cn and teslamotors.cn to Tesla.
Tesla's trademark, which Zhan Baosheng owns or has applied for,
will be canceled by the Chinese authorities. This will establish
undisputed trademark rights for Tesla in China. However, the
automaker did not provide any financial details of the agreement.
The recent conclusion of the patent issue marks the second
settlement between Tesla and Zhan Baosheng. In January this year,
Tesla announced the settlement of the trademark dispute with
Baosheng and initiated the supply of Model S vehicles to China in
Apr 2014. However, on Jul 8, a trademark infringement charge was
leveled against Tesla by Baosheng, demanding a compensation of
about $3.85 million and the termination of the company's operations
Notably, Baosheng owns the Tesla trademark in China since 2006,
much ahead of the automaker's entry into the Chinese market. While
Baosheng had planned to sell the trademark to Tesla, the deal did
not take shape.
Tesla is currently focusing on international expansion,
particularly in China - deemed to be the world's largest automobile
market. Toward this end, the company intends to set up 10 to 12
stores by end-2014 along with service centers and a Supercharger
network in the nation. Tesla also expects China to account for
30-35% of its global sales growth in 2014. Further, the automaker
intends to start manufacturing cars in China by 2017-2018, thereby
slashing car prices and boosting sales.
Meanwhile, Beijing is initiating new incentives like purchase
subsidies and tax cuts to promote electric vehicles. This should
boost the sales of Tesla's electric vehicle Model S.
Tesla is not the only foreign company which has been facing
patent-related concerns in China. Companies like Apple Inc. (
), Koninklijke Philips N.V (
) and Unilever NV (
) have also come across similar trademark-related complications in
Tesla currently sports a Zacks Rank #1 (Strong Buy).
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