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Introduction
The realm of trademarks is an important sector for enterprises, especially in a globalised economy. Strong trade marks allow consumers to identify the origin and quality of goods and services. Tesla Inc. (Tesla) considers its brand name ‘Tesla’ to be an essential component of its identity. This identity is currently under threat as a result of a trade mark dispute with Tesla Power India Pvt. Ltd. (TPI), a well-known Indian manufacturer of batteries and energy storage solutions, in the Delhi High Court.
Background
The dispute started in April 2022 when Tesla found out that TPI was using the brand name ‘Tesla Power USA’ on its website. As a result, TPI received a cease and desist letter from Tesla, requesting that they discontinue the use of the trademarks TESLA POWER and TESLA POWER USA. The negotiations extended until March 2023, but due to TPI’s persistent use of ‘Tesla,’ Tesla decided to take legal action.
The Lawsuit
Tesla’s lawsuit is based on three key legal claims in the field of intellectual property: trade mark infringement, passing off, and unfair competition.
- Trade mark Infringement: Trade mark law provides exclusive rights to those who have registered their trade mark. Tesla argues that TPI’s use of ‘Tesla’ could potentially confuse consumers, leading them to believe that TPI’s products are connected to Tesla. This is particularly concerning considering Tesla’s registered trademarks and pending applications for TESLA in India.
- Passing off: This principle of common law safeguards the reputation of a brand from unauthorised misuse by others. Tesla argued that TPI’s usage of the word of ‘Tesla’ inaccurately portrays their products as being affiliated with Tesla, which has a detrimental impact on the reputation of the brand.
- Unfair competition: This broader concept discourages deceptive or misleading business practices. Tesla argues that TPI’s actions give them an unfair advantage by capitalising on Tesla’s well-established reputation
The Hearing
During the initial hearing, TPI denied any involvement in electric vehicle production or marketing. TPI clarified that its core business focuses on batteries for vehicles, inverters, and UPS systems. TPI’s defence emphasised that any marketing materials mentioning ‘Tesla’ pertained to a collaboration with another electrical vehicle (EV) manufacturer, distancing themselves from independent production of electric vehicle batteries. Notably, TPI undertook to refrain from using Tesla’s registered logos and to avoid promotional activities for EVs under its brand name. The court acknowledged this undertaking and bound them to it.
However, the case raises a legal question: does TPI’s use of ‘Tesla’ for its core battery business infringe on Tesla’s trade mark rights, considering Tesla’s trade mark registrations in India? This hinges on the concept of cross border reputation, which extends trade mark protection to well-known foreign brands, even if not formally registered locally. In this case, Tesla’s trade mark portfolio in India, its global reputation for electric vehicles, and its association with advanced battery technologies could influence the court’s decision.
The next court hearing in Delhi is on the 28th of May and in the meantime the court has issues a notice and restrained TPI from publishing any advertisements featuring EV products with a trade mark similar to that of Tesla’s.
If you have any queries related to the above or an alternative matter, contact our expert team of solicitors through:
tmr@trademarkroom.com OR alternatively give us a call on 02380 000190.
