Days before launch of first India store, Delhi HC restrained companies from infringing upon Tesla’s trademarks

Tesla Power India, the defendant, had claimed that it adopted the mark in 2020, as it was inspired by the works of famous Serbian-American scientist Nikola Tesla.

Tesla in Gurgaon: Store promises after-sale service, charging infra

The showroom was inaugurated at Gurgaon’s Sohna Road on Thursday. (PTI)

Days before US-based multinational Tesla rolled out its first Indian showroom in India on Thursday, the Delhi High Court on November 24 protected its trademarks and logo, restraining firms that had been purportedly infringing upon the multinational company’s marks while providing similar services and using a similar supply chain as Tesla does.

Justice Tejas Karia, in an order made public on November 26, held that Tesla Inc has established its goodwill and has made out a prima facie case of other firms passing themselves off as Tesla Inc, while noting that it is irrelevant whether Tesla is selling products in India or not as long as its marks have been registered in India.

Tesla Inc had alleged that the infringing defendants, which included one Tesla Power India Private Limited, along with others, were manufacturing and selling electric scooters despite furnishing an undertaking before the court in May 2024 that it will not be using the impugned trademarks in relation to electric vehicles (EVs), and even continued to advertise on its website as such.

Tesla Power India, the defendant, had claimed that it adopted the mark in 2020, as it was inspired by the works of famous Serbian-American scientist Nikola Tesla. It added that it had amassed nearly “500 distributors and 5,000 dealers in India, employed more than 1,000 people, either directly or indirectly”, and witnessed substantial sales of more than Rs 360 crore for FY 2020 till March 31, 2024, spending about Rs 15 crore on advertising and marketing.

Notably, the defendants, while responding to a cease and desist notice by Tesla Inc in 2022, had elaborated that its name is derived as an acronym of “THE ENERGY STORAGE on Leased ASSETS,” the business model the company was based on.

The defendants had contended that Elon Musk’s Tesla had not commenced using its ‘TESLA’ marks to sell its products in India at the time of filing of the suit, despite alleged use of the ‘TESLA’ marks since 2003.

Justice Tejas Karia, however, rejected this argument, noting that Tesla Inc had registered its mark in India and whether any sale was made or not “is not relevant”.

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The defendants had also argued that American computing giant Nvidia, too, has also got the mark ‘TESLA’ (the word) registered in India, and thus Tesla Inc cannot claim any exclusive proprietary rights over the mark.

Justice Karia, however, held: “It is implausible that the defendants were not aware of the (Tesla Inc) and the (Tesla Inc’s) marks considering the overwhelming goodwill of the (Tesla Inc) Accordingly, the use of the impugned trade marks is prima facie dishonest and appears to be an attempt to ride on the goodwill and reputation of (Tesla Inc’s) trade marks… The likelihood of confusion among the minds of the consumers is very high given the allied and cognate nature of goods.”

While Tesla Inc, as recorded in the court’s order “is one of the biggest manufacturers of EVs” and is “also dealing in batteries and battery technologies with various implications,” the defendants are “producing batteries for electrical two-wheeler and electric four-wheeler, among other batteries”.