The launch of Tesla Motors’ (TSLA) Model S in China has hit a legal snag.
While Tesla is currently taking reservations for its $70,000 electric car from potential Chinese buyers, plans to open a showroom in Beijing earlier this year had to be postponed, party due to the discovery that the Tesla name had been trademarked in China since 2006, Reuters notes.
A businessman from a southern Chinese provinces is reported to hold the trademark to the Tesla name in both English and Chinese, and is using it to sell his own brand of electric car. Legal experts say that Tesla may have to buy the rights to the name from the businessman, since Chinese laws don’t offer strong trademark protection to emerging brands like Tesla.
California-based Tesla has also yet to secure product registrations needed to sell its Model S in China from state regulators. However, sources tell Reuters that it may be close to obtaining them.
Tesla isn’t the first Western company to face a trademark struggle in China. Apple (AAPL) fought to secure the rights to the iPad name in Chinese courts before negotiating a $60 million settlement with a Chinese company that had claimed the rights to the name.
Shares of Tesla climbed more than 1% in Friday morning trading.