| CASE NAME | Tesla Inc. v. Tesla Power India (P) Ltd. |
| CITATION | 2024 SCC OnLine Del 4594 |
| COURT | Delhi High Court |
| PETITIONER | Tesla Inc. |
| RESPONDENTS | Tesla Power India (P) Ltd. |
| DECIDED ON | 4 July, 2024 |
INTRODUCTION
This legal case illustrates the challenges that multinational corporations encounter when trying to protect their intellectual property rights in foreign markets, especially when they are developing parts of the world (for example, India) when companies can find different ways to acquire and use the technology without invoking legally branded intellectual property of multinational companies. The case itself illustrates the difficulty of trademark law and the implications for brand identity, consumer protection, and fair market competition in developing markets. Although the case itself has clear implications for aerospace, the case presents a more serious challenge for those companies because the precedent created will establish how the courts will decide trademark cases and how the competitive landscape in the developing EV market in India will be impacted. This case involves Tesla Inc., a globally recognized electric vehicle and renewable energy company, challenging Tesla Power India Pvt. Ltd. for using the “Tesla” trademark in India. The dispute highlights the difficulties multinational companies face in protecting their brand identity and intellectual property in foreign markets. Central issues include trademark infringement, passing off, and the potential for consumer confusion. The case also emphasizes the importance of trademarks for maintaining reputation, market position, and consumer trust. Its outcome will not only affect the parties but may also influence how Indian courts handle IP protection for global brands in emerging industries.
FACTS OF THE CASE
PARTIES
Plaintiff- Tesla Inc., incorporated in 2003 and based in Palo Alto, California, is a significant American manufacturer of electric vehicles and renewable energy solutions. The business is recognized worldwide for their technological innovations in the manufacturing of sustainable energy, and even has affiliated branding with the term “sustainable energy.” With a global presence as manufacturer of electric vehicles (EV), sophisticated battery systems, and solar energy consumer products, Tesla also participates on social media platforms and manages their own, official website to enhance brand awareness and develop customer engender loyalty.
Defendant – Tesla Power India Pvt. Ltd. is an Indian corporation that manufactures and sells energy-related solutions like lead-acid batteries and electric vehicle chargers. Defendant has been accused of using the name “Tesla” and/or the associated logo as part of its brand and marketing efforts, thus infringing Tesla, Inc.’s trademark.
Background of the Dispute
This dispute began in April 2022 when Tesla Inc. learned that Tesla Power India was selling its products under a name confusingly similar to its own. Tesla Power India was selling electric scooters, as well as EV charging equipment, creating the potential for real and immediate concern for Tesla, Inc. regarding consumer confusion and potential dilution of the Tesla brand. As a result of this, Tesla Inc. served a cease and desist letter to Tesla Power India, and demanded that it immediately discontinue use of the trademark. The cease-and-desist letter has been resisted by Tesla Power India, so Tesla, Inc. initiated the dispute in the Delhi High Court.
Legal Proceedings Initiated
Due to the silence from Tesla Power India, Tesla Inc. has subsequently commenced a suit in the Delhi High Court identifying the defendants not only as Tesla Power India Pvt. Ltd. but as many of its associates, including Tesla Power USA LLC, who operates in the U.S. The relief they sought includes a permanent injunction against the defendant’s use of the “Tesla” trademark, claiming outside of trademark infringement, that their use constitutes passing off and unfair trade competition.
Initial Court Hearings
On May 2, 2024, the court hearings commenced, with many interim applications from both sides. The plaintiff requested that it file documents without certified copies, the right to add more to the documents, and a redacted copy of an email related to the case. The defendant and the court agreed and stated that the plaintiff could submit whatever documents they required, while expressing its hope in regard to their auspicious ability to comply with the Commercial Courts Act and its rules and regulations.
The defendant responded to the plaintiff’s allegations, saying they primarily focused on selling lead-acid batteries and did not mean to infringe on the trademark of Tesla Inc. The defendants also represented that the advertisements discussing the “Tesla” name were a marketing partnership with another electric vehicle manufacturer, named E-Ashwa.
ISSUES
- Trademark Infringement- The central issue is whether the defendant’s use of “Tesla” violates the trademark rights of Tesla under Indian trademark law.
- Misrepresentation and Consumer Confusion- Further, the matter of whether the defendant’s branding and marketing may mislead consumers and/or confuse consumers as to the source of products sold is another area of concern.
- Compliance with Court Orders- This case raises issues about to what extent the defendant has complied with the issuance of the court as it relates to its business practices and marketing practices following the cease and desist letter.
Broader Implications
This case is not just relevant to the parties before the court, but also the implications impact the area of intellectual property rights and consumer protection in India. As demand for electric cars continues to increase, multinational companies who are seeking to enter the Indian market benefit from the protection of their trademarks. This case may inform courts of how to interpret experimental trademark laws and to better understand the duties of local companies when competing in sectors with other domestic competitors.
CONTENTIONS FROM BOTH SIDES
PLAINTIFF CONTENTIONS
- Copyright and Trademark Rights and Protection- Tesla Inc. asserts that its trademark is known and protected globally and under numerous international laws. The company contends that the substantial goodwill and brand strength developed over time in connection with its trademark is weakened by the infringement of Tesla Power India, and the company’s financial investment in cultivating its reputation inconvenience as prior owner is put in disproportionate inequity by infringing actions.
- Likely Consumer Confusion- The plaintiff asserts that the defendant’s use of a substantially similar name, brand, and marketing strategy is likely to confuse consumers. In support of this assertion, Tesla Inc., and submit evidence developed advertisements for its own or focusing screenshots of its corporate websites, and communications with its dealers – each were evidentiary of defendants’ advertisement of a product under the use of a similar name, which was likely to confuse consumers as to the origin of such use.
- Impact on Brand Reputation- Tesla Inc. highlights the reputational injury that potentially could exist due to the defendants; specifically, association with lower quality products or unrelated products could result in consumers having less favorable perceptions of the Tesla brand resulting in damage and loss of market position over time.
DEFENDANT CONTENTIONS
- No Intent to Infringe- Tesla Power India argues that it has not done anything to infringe or appropriate any trademark. The defense asserts that it is engaged only in the lead-acid battery business and has no plans to enter the electric vehicle business under the name of Tesla.
- Clarification of Marketing Partnership- The defendants do not deny their marketing partnership with E-Ashwa, but they claim it does not allow them to use “Tesla” in connection with their products. They say that the ads, in particular, were not aimed at misleading consumers and that they will take measures to avoid confusion in the future.
- Affidavit Submission Commitment- Tesla Power India confirmed that in response to these allegations, they will file affidavits identifying the nature of their business, the dealers, and a number of sales once the defendants confirmed the position they are taking so soon after the order of the court. Once filed, there will be a submission that will paint an accurate picture of the situation and demonstrate their compliance with the order of the court.
JUDGMENT
Currently, the case has the status of Judgment Reserved as of September 4, 2025. The presiding judge has concluded hearing arguments from each party but has not yet reached a conclusion. The judge will take some time to review the evidence, consider the legal arguments of each party, and think about the implications of the case, before announcing judgement on the case.
The status of Judgment Reserved carries with it a number of important meanings-
Careful consideration– The judge’s decision whether or not to adopt a position above address to the motions and evidence presented by each party, the affidavits, the advertisements, and the marketing practices of Tesla Power India, in order to be fair and just.
Possible outcomes– The reserved judgment may result in a solution on behalf of Tesla Inc. for a permanent injunction barring Tesla Power India from conducting business under that brand. Alternatively, the judgment could also find in favor of the defendant with permission to proceed and the use of the bumper branding “Tesla” subject to conditions or requirements.
Setting of Precedent– The court’s ruling will probably set precedent with respect to protecting intellectual property and trademark disputes related to multinational companies operating in the same market.
CONCLUSION
The case illustrates the challenges and nuance of rights in its application to intellectual property in a global marketplace. As the electric vehicle market continues to grow in India, trademarks and brand identity are becoming more consequential to businesses to establish and protect their market presence.
The concurrent case advises all multi-national entities to enforce their trademark rights against infringement, but no matter the outcome the ramifications of the concurrent case serves as a reminder of the nuances around assigning rights and obligations, clear communications, and a corporate culture of respect for competition.
In the end, while the outcome of the dispute is relevant to the respective parties, it may also impact the marketplace governing the rules of trademarks and competition in the electric vehicle industry. In fact, while it may be a coincidence, the nature of these disputes around innovation, or IP rights, and consumer protection in the international marketplace are defining consumer protection.
‘This article has been written by Tamanna Jain from University Five Year Law College, University of Rajasthan.’
