Electric car maker Tesla Motors is being sued in China for trademark infringement, in what Reuters calls “a surprise development that casts a shadow over CEO Elon Musk’s ambition to expand rapidly in the world’s biggest auto market.”  The plaintiff is seeking a court order stopping all Tesla sales and marketing activities in China and around four million dollars compensation. The plaintiff claims to own the “Tesla” car trademark for China because he registered it in 2006, well before Tesla came to China.

Even without digging deeper into the facts and the law surrounding this particular case, we can most emphatically tell you that it should be instructive on at least one thing: if you are ever planning to sell (or even manufacture) your product in China, it behooves you to at least explore registering your trademark(s) in China right now. China is a first to file country, which means that whomever first secures a trademark generally gets it.

What this means in real life is that if you are right now selling ABC Widgets in the United States (where you have a registered trademark, or not) and you do not own the trademark for ABC Widgets in China, someone in China can go off and relatively cheaply register the name ABC for widgets in China. What this then means is that if you, let’s say, two years from now want to sell your ABC Widgets in China, you will need to buy or license the ABC Widgets trademark from its owner in China or sue to try to get it.

In our experience, buying trademarks from Chinese companies is typically quite difficult and quite costly and oftentimes does not result in a sale. Read the Tesla article or read about Apple’s issues with the iPad name in China to see what we mean. And pursuing litigation over a trademark in China is also typically quite difficult and quite costly, and quite risky as well.

By far the fastest, cheapest, easiest, safest way to make sure that you can use “your” trademark in China is to register it before anyone else does. When should that be? Pretty much as soon you have both an inkling that you will need/want to use your trademark in China.

For more on the importance of registering trademarks in China and on how to register a trademark in China, check out the following:

 

 

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.