Patent Trolls Won’t Hold Back Tesla’s China Plans

Tesla Model S

Not that long ago, a new problem surfaced for Tesla Motors (NASDAQ:TSLA) that threw a sizable wrench into the company’s plans to launch operations in China. Bureaucratic red tape and regulations aside, the California-based electric vehicle maker has a much larger and more fundamental problem at hand: Someone had already filed trademark protection for the company’s name.

A certain Zhan Baosheng secured the “Tesla Motors” name back in 2006, when the company was still in its infancy and working on its first project, the Roadster. Unfortunately, the practice of filing for copyrights and trademarks in China preemptively — before the product or company has reached the nation — is somewhat commonplace, and poses a rather serious barrier to international firms looking to do business there.

But it seems as though Tesla was taught to pick its battles, and rather than engaging the patent troll in legal battles — Zhan turned down Tesla’s offer of $326,000, wanting $32 million instead — the company has decided to skirt the issue entirely and resume its original plans to market its vehicles in China, albeit under a different name: Tuosule.

According to InAutoNews.com, the new name comes from a transliteration of the automaker’s name. Tesla’s location in Hong Kong has been around the longest and is therefore the reason that the automaker chose this particular transliteration, which reflects the regional dialect there.

Meanwhile, the company is seeking to have Zhan’s trademark canceled on the grounds that he is not using the name for any purposes other than an effort to sell it back to Tesla, though he claims that he does indeed have electric vehicles under development. It’s certainly a cheaper alternative to paying for the name outright.

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