Elon Musk, the world's richest man and an entrepreneurial genius, is known for starting the breakthrough electric automobile manufacturing company Tesla. This business has transformed the global auto industry and given its creator tremendous returns. Tesla is well ahead of its rivals in terms of quality and technology and has established an unmatched brand reputation globally. Many business owners and manufacturers across all industries dream of having a brand name with such a high market price. As a result, it's not uncommon to see someone attempting to smuggle some common features of the logo and brand name into their own business. Many people would have immediately exploited the brand name and emblem to sell their products except for copyright and patent laws and regulations. This guarantees them a positive outcome and draws attention to their goods, saving them money on marketing and brand promotion.
Even with all of the laws and regulations in place, instances still occur where a company in another nation attempts to mimic the name and emblem of a different well-known corporation. The most recent instance of this is a conflict between the original Tesla and another so-called "Tesila" that makes beers rather than electric automobiles in China and the United States. In court documents, Tesla (Shanghai) Co., Ltd. asserts that Sino Drinks Food Firm, a Chinese company, infringed its legal rights by manufacturing alcoholic beverages under its approved brands. Along with the Chinese enterprise and its Guangdong office, it named a design studio as a respondent in the case.
As a result, the Tesla branch in China has asked for RMB 5 million (US$742,000) in compensation. This is an example of trademark squatting at its best. Trademark piracy (squatting), according to the World Intellectual Property Organisation ("WIPO"), is "the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use." “It occurs when a local businessperson registers a trademark in their own country after using another party's trademark elsewhere, possibly without any plans to use it for any sort of economic activity. Once the local business person has registered the trademark, he will frequently wait until the foreign party, or the genuine trademark owner, decides to visit the country before offering up the registration in return for money.
Significant trademark squatting activity has been observed in China. In China, trademark squatting is the closest thing to legal extortion. US businesses frequently believe incorrectly that simply by registering their trademarks in the US, they will also be recognised in China. In contrast to other nations where priority is given to those who "first use" it in business, the legal system in China places emphasis on who is "first to register. “The Shanghai High Court has received the case, but has not yet rendered a decision. As of now, Chinese courts have usually interpreted the law strictly and rendered decisions in favour of trademark squatters. Tesla is no exception to this rule. Given the drawn-out, costly, and frequently unfair adjudicatory procedure involved in trademark disputes, it would be more practical from a business standpoint to negotiate with the squatter to directly purchase the trademark from the squatter in an out-of-court settlement.
Therefore, international companies must effectively register their trademarks in China before trademark squatters and register under as many categories and subcategories as is financially viable in order to prevent such trademark squatting by Chinese companies.
