Recently, Tesla China announced an important news on its official account.


The case of Tesla suing Tesla Beer for trademark infringement and unfair competition has been settled. The court not only recognized the Tesla series trademarks as well-known trademarks, but also ordered the defendant to immediately cease infringement, publicly eliminate the impact, and compensate Tesla for economic losses of RMB 5 million.


Event initiation
In 2019, a beer and soda product called "Tesla" quietly appeared on the market. Its manufacturer, Zhongyin Food Co., Ltd., uses a "T" shaped logo that is highly similar to Tesla cars in its products, website, and promotion.


Its promotional slogan claims to be the "pioneer brand of pre mixed drinks in the United States", and the advertising images even directly use the vehicle image of Tesla Model X. This deliberate association behavior aims to mislead consumers into thinking that the product is authorized or associated with the globally renowned electric vehicle brand Tesla.


Faced with this obvious "free riding" behavior, Tesla filed a lawsuit in 2021 in accordance with the law, and a judicial battle over the boundaries of trademark rights and brand reputation began.


The plaintiff in this case, Tesla (Shanghai) Co., Ltd., as the main entity of Tesla in China, has become synonymous with innovation and high technology with the popularity of electric vehicles, and its "TESLA" and "Tesla" trademarks have gained high reputation and recognition in China and even globally.


The defendant, Zhongyin Food Co., Ltd., was established in June 2019 and its business scope includes food production, alcohol sales, etc. In addition to the core "Tesla Beer" in this case, the company has also applied to register dozens of similar trademarks such as "TESILA" and "Tesla".


Its trademark application records also include the names of "COVID-19 Liangcha", "All People Bring Goods" and other obvious hot spots. This batch and imitative registration behavior has become an important basis for the court to determine its subjective malice.


Legal competition
The core dispute of the case lies in whether the trademark rights of a car manufacturer can be extended to beer products? The court's answer is affirmative.


The first instance court, after trial, held that the Tesla trademark has been widely promoted and used for a long time, and has become well-known to the Chinese public, constituting a well-known trademark. The defendant's copying and imitation of the trademark on dissimilar goods is sufficient to mislead the public and harm Tesla's interests, constituting trademark infringement and unfair competition.


The defendant, Zhongyin Company, is dissatisfied with the judgment and has filed an appeal. After a comprehensive review in the second instance, the Shanghai High People's Court made a final judgment of "rejecting the appeal and upholding the original verdict".


The verdict of the two-level court clearly sends a signal: the law provides strong cross category protection for well-known trademarks, and malicious acts of climbing the reputation of well-known brands will be severely punished.


Judicial consideration of 5 million compensation
The compensation amount of 5 million yuan awarded by the court is not an arbitrary number, but has reached the upper limit of the statutory compensation in this case. The determination of this amount takes into account multiple factors:


Firstly, the Tesla trademark has a high level of recognition and market value; Secondly, the defendant's infringement behavior lasted for a long time and had obvious subjective malice; Furthermore, the defendant used infringing marks to attract investment and franchise, with a clear profit model.


It is particularly important that the defendant's bulk registration behavior indicates that it is not accidental infringement, but an organized and planned use of others' goodwill for profit, and the circumstances are serious. The high compensation reflects the punitive orientation of the judiciary towards malicious infringement.


After the judgment came into effect, Tesla applied to the court for compulsory enforcement due to the defendant's failure to voluntarily comply. According to public information released in October 2024, Zhongyin Food Co., Ltd. has been listed as an executed party with an execution target of 5 million yuan.


This case has been selected by the Shanghai court as a typical case of intellectual property judicial protection. It is not only an important victory for Tesla's rights protection in China, but also has profound judicial demonstration significance.


The judgment clearly states that for registered trademarks with high popularity, providing strong protection that is commensurate with their distinctiveness and popularity is a necessary requirement to encourage innovation and purify the market environment.


With the progress of the court's compulsory enforcement procedure, "Tesla Beer" has been fully removed from online and offline channels. This lawsuit, which lasted for several years, finally came to an end with a firm stance on intellectual property judicial protection.


The verdict of this case is like a boundary marker, clearly delineating the blue ocean of brand innovation and the minefield of trademark infringement. At the end of the judgment, the judge wrote the following sentence: "Any attempt to obtain undue benefits through 'free riding' or 'riding on famous brands' will be subject to a negative evaluation by the law