Over in China, companies are vying to get their names and products to consumers in the fastest-growing economy in the world. This makes trademark trolling an incredibly lucrative business, as Tesla Motors is finding out. The holder of the “Tesla Motors” trademark in China wants more than $32 million for rights to the name. Ouch.
Tesla faces a number of challenges in China, from incentives that favor locally-built electric cars to a consumer base that hasn’t exactly been flocking to buy pure electric vehicles. But China could be a huge market for Tesla, and 100s of orders are already lined up in Hong Kong.
But trademark trolling could be an even bigger problem; while Tesla has secured the rights to the “Tesla” name for just $326,000, the owner of the “Tesla Motors” moniker wants the equivalent of $32.6 million. That is a bold move, and Tesla has just a few choices in the matter; either they change the company name in China (perhaps just to “Tesla”) or they try to negotiate with a trademark terrorist. Either move could be costly.
Another option is to take the matter to the courts, where Tesla will have to prove that the Chinese trademark owner has nothing to do with electric cars, and is merely squatting on the name. How fruitful that will be depends on any number of issues, but at the end of the day it all comes down to the cost of doing business.