Tesla and SpaceX Take “Terafab” Trademark Fight to Federal Court

Tesla and SpaceX have filed a lawsuit in federal court seeking a ruling that their planned Terafab chip factory does not infringe on a trademark held by a small Illinois company, ending months of failed negotiations.

What Happened

The dispute began on May 18, when Tesla filed three U.S. trademark applications for “Terafab” and “Tesla Terafab,” covering semiconductor chips and related manufacturing services. Five days later, TERA-print LLC, a nanotechnology firm that has held a federal trademark for “Tera-Fab” since 2021, issued a cease and desist letter. TERA-print argued that Tesla’s use of the name would confuse consumers familiar with its desktop photolithography printer, which is sold to researchers for sensor and bioengineering work. However, the complaint highlights that one day before sending the letter, TERA-print applied to expand its trademark registration to cover semiconductor materials, silicon chips, and AI design services—categories it had not previously claimed. Tesla and SpaceX characterize this move as opportunistic, noting it occurred two months after Tesla publicly announced the Terafab project.

Why It Matters

After TERA-print threatened legal action in June, Tesla, SpaceX, and SpaceXAI engaged in six separate negotiation attempts between June and August. When these talks collapsed, the companies filed for declaratory judgment in the U.S. District Court for the Western District of Texas to preempt a potential infringement claim. The stakes are high for the Terafab project, which is planned as a $16.8 billion complex in Grimes County, Texas. Tesla and SpaceX argue the overlap is superficial, stating that no reasonable consumer would confuse a massive facility producing chips for Optimus robots and AI computing with a tabletop lab printer. TERA-print, however, remains firm, with CTO Andrey Ivankin stating the company holds a Defense Department contract for semiconductor fabrication and will vigorously defend its rights. This legal battle is the second dispute tied to the Terafab name in recent weeks, following a separate SpaceX lawsuit aimed at keeping facility records private.

The Bottom Line

Whether construction proceeds under the Terafab name now depends on a federal judge in Austin. The outcome will determine if Tesla and SpaceX can retain the branding for their planned AI chip manufacturing hub or if they must rebrand following the challenge from TERA-print LLC.