Tesla Inc. is a US-based company founded in 2003 by Elon Musk and is considered a pioneer in the electric vehicle industry. Over the past decade, Tesla has emerged as a market leader with popular electric car models like the Model S, Model X and Model 3. The company currently has a market capitalization of over $800 billion and is among the most valuable automakers in the world.
Tesla Power India Private Limited is an Indian startup that was incorporated in 2021. While the company does not currently manufacture any vehicles, it had announced plans to enter the Indian electric vehicle market. This led to a trademark dispute with Tesla Inc.
Tesla Inc. holds trademark registrations for the wordmark “TESLA” in numerous countries and classes, including India. The trademark is extremely well-known globally due to Tesla’s market leadership in the EV segment.
However, Tesla Power India was using an identical mark “TESLA” for its business and had issued advertisements claiming that it would enter the Indian EV market. This created a clear risk of trademark infringement and passing off. Consumers could potentially associate Tesla Power India’s products and services with those of Tesla Inc., even if the quality and standards were different.
In April 2022, Tesla Inc.’s lawyers sent a legal notice to Tesla Power India asking them to cease and desist from using the “TESLA” mark. Over the next year, the two sides engaged in discussions to resolve the issue amicably. However, Tesla Power India did not agree to stop using the mark. They continued to use it in their promotional materials and announcements, forcing Tesla Inc. to file a lawsuit.
The lawsuit was filed before the Delhi High Court in May 2024. Tesla Inc. argued that Tesla Power India’s activities amounted to trademark infringement, passing off and unfair competition under the Trademarks Act, 1999.
During the initial hearing, the single-judge bench of Justice Anish Dayal asked Tesla Power India to clarify their position. The Indian startup conceded that they had no plans to actually manufacture EVs. They gave an undertaking to the Court that they will stop using the “TESLA” mark for any goods/services, including EV-related promotions.
The Court accepted the undertaking and directed Tesla Power India to file a formal reply to the lawsuit within 3 weeks. It also restrained them from using the Tesla trademark or any deceptively similar marks in the interim. The next hearing will take place on May 22.
The Delhi High Court’s interim order prevents further misuse of the Tesla trademark by the Indian startup until the final outcome. By giving an undertaking to the Court, Tesla Power India has conceded prima facie infringement.
It remains to be seen whether they can raise a credible defense to the lawsuit. Given Tesla Inc.’s strong trademark rights and the identical nature of the marks, it seems unlikely. The Court may ultimately pass a permanent injunction against Tesla Power India’s use of the mark.
This case reaffirms the significance of trademark enforcement to protect well-known marks from unauthorized use. It will also deter other companies from leveraging Tesla’s brand equity without consent in the fast-growing Indian EV market.
