Tesla (TSLA) Sued in China Over Trademark Infringement

Tesla (Nasdaq: TSLA) is on watch today following reports that the company is being sued in China for trademark infringement.

Reports out Tuesday have Chinese businessman Zhan Baosheng filing a lawsuit against the company, ordering Tesla to stop using the "Tesla" trademark and halt all sales in China. Zhan is seeking 23.9 million yuan (about $3.85 million) in compensation.

The case will be heard by the Beijing Third Intermediate Court on August 5th.

Zhan registered the "Tesla" trademark in both Chinese and English in 2006. Last January, one spokesperson for Tesla's China operations said the issue had been resolved. It's not clear whether that is the case and this is a different suit, or whether a resolution was never reached in the first place.

While Tesla has a market cap above $27 billion, the company is still unlikely to want to pay out a relatively small sum nearing $4 million given current and future plans for expansion.

Coincidentally, news is breaking just one day following commentary from Barclays, which sees China as an "increasingly important" market for Tesla. For more on that story, click here.

Shares of Tesla are down 0.8 percent.

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