Recently, Tesla Motors learned a hard lesson about the importance of the China market. When new businesses, small businesses even large businesses launch new products and roll out new trademarks, the primary focus is usually the domestic market, and rightfully so. After all, why care about foreign markets if you cannot gain traction in the U.S. So, many companies forego international trademark protection for their marks during the early stages of product development and launch. While this strategy could save some money short term, there are potential risks.
For example, Tesla struggled for years before its Model S took the automobile world by storm in 2012. Before that, and rightfully, its focus was on developing the technology that powers its cars. Like many startups, trademarks were a secondary concern to Tesla in the beginning. In the United States, it was not until 2009 that Tesla sought registration of any of its trademarks. It did not seek any international registrations at the time.
How China Differs
In the United States, trademark rights are based on use of a mark. The first to use a mark is the party that generally has the strongest rights. However, in many countries use is not relevant. Rather, the first party to register a mark has the highest rights to it. China is such a country.Continue Reading Why China Matters