In China, Tesla (TSLA) Has The Right To Use Its Logo ... Only On Planes, Trains, Ships And Sleighs

[UPDATE Aug. 20] Zhan Baosheng's wesbsite promoting a "Tesla" electric car is updated. Click here to see the four Tesla-related trademarks Zhan is claiming and read about what other companies Zhan targeted for China trademark registrations.

[UPDATE Aug. 15 3:30 p.m. EDT]Zhan Baosheng's wesbsite promoting a "Tesla" electric car using Telsa Motors' T-shaped logo has been taken down. The domain's index showed a spike in traffic to the site on Wednesday.

Original story begins here:

Zhan Baosheng is either a scrappy, young Chinese entrepreneur seeking a business selling “Tesla” electric cars for the Chinese market or he’s a squatter holding the trademark of Tesla Motors Inc. (NASDAQ:TSLA) hostage, hoping for a heavy payout.

Now, as the Silicon Valley-based maker of luxury electric vehicles has committed to opening its first retail outlet in Beijing by the start of 2014, the three-year-long dispute over securing this vital element of Tesla’s branding is about to come to a head.

A Tesla representative said by email on Wednesday the company is not commenting “at this time” on this issue, but media reports suggest Tesla is in talks with Zhan and may be preparing a legal challenge.

The automaker has a few options, but the issue of branding has to be worked out before it can move to sell its cars in the world’s biggest auto market. The company has said global expansion into China and Europe is an important element to meeting its goal of doubling its annual sales to 40,000 by the start of 2015.

With just three more months to go before the end of the year, Tesla currently can put its trademark “Tesla Motors” only on certain types of vehicles, namely planes, trains, ships and motorized sleds, after it bought China trademark rights from trademark troll Qiao Weiwei on May 6 for an undisclosed amount of cash, according to Want China Times. But that deal turned out to be useless because it excludes the use of the trademark on cars and auto parts.

In 2009, Tesla CEO Elon Musk offered Zhan 2 million yuan (about $327,000), an offer Zhan felt he could refuse, demanding 200 million yuan from Tesla as an investor in his company. China Daily reported on Wednesday that a Tesla executive traveled to China last month to negotiate with Zhan, who has registered in China three of the most obvious website names, tesla.com.cn, teslamotors.com.cn and tesla.cn.

Zhan has received a lot of heat from the Chinese public and media, who accuse him of what he’s probably doing: waiting for the kind of payout Apple Inc. (NASDAQ:AAPL) had to fork over last year to win the right to use the “iPad” name from Chinese company Shenzhen Proview Technology. That deal cost Apple $60 million, down from the initial demand of $400 million from the company, according to the New York Times.

Facing a barrage of criticism from the Chinese public and press, Zhan is on the defensive.

Tesla could challenge him if the trademark sits idle for three years, opening way for the Chinese trademark office to revoke his rights. So he’s made public appearances using Tesla’s badge on golf carts he ostensibly produces. His Mandarin language Tesla website hints at a full-sized electric sedan, though details are scant.

Zhan’s website depicts a sporty electric car beneath the Tesla logo with a trademark symbol, the word “Tesla” with a registered trademark symbol and the badge on the front of the car as well as the Chinese letters “Te Si La.” One small difference: The font of the word “Tesla” is a standard sans serif instead to Tesla’s modernist lettering, which Zhan likely doesn’t own the rights to use.

[Photo of Zhan Bao Sheng on the “Tesla” golf cart from China Car Times.]