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GM Daewoo files suit against Chery

By Liu Li (China Daily) Updated: 2005-05-09 06:23

The General Motors (GM) Daewoo auto firm is suing a Chinese car manufacturer for allegedly copying one of its vehicles. Sources with the Beijing No 1 Intermediate People's Court confirmed yesterday that the court has accepted a lawsuit filed by General Motors (GM) Daewoo against China's Chery Automobile Company. GM is asking for compensation of 80 million yuan (US$9.6 million). GM Daewoo contends that Chery's mini car QQ copied its Matiz and Spark. Chery denies this, saying it developed QQ on its own. The South Korean plaintiff initially began suing the Chinese auto maker in December last year at the Shanghai No 2 Intermediate People's Court. However, the defendant objected on jurisdiction grounds. The Supreme People's Court appointed the Beijing-based court to handle the case, sources in the press office of the Beijing No 1 Intermediate People's Court told China Daily yesterday. Produced by GM Daewoo, the Matiz went on the South Korean market in 1998, according to the bill of indictment. GM Daewoo authorized the Shanghai Automotive Industry Corporation in 2003 to produce and sell the Spark on the Chinese mainland on the basis of the design and technology of the Matiz. However, GM Daewoo claimed their investigation results showed the Chery QQ shared a remarkably identical body structure, exterior design, interior design and key components. "Chery even used a camouflaged Matiz car to pass auto tests to acquire authorization from the government over production and sales of QQ," the plaintiff said. GM Daewoo claimed the behaviour of Chery had resulted in unfair competition. A press official surnamed Zhang at the Chery headquarters in East China's Anhui Province told the Beijing Youth Daily that they had not been told of any developments regarding the accusation, the Beijing Youth Daily reported. However, sources with the Chinese automaker insisted that Chery depends on itself for development, instead of copying other firms. Eight months ago, Zhang Zhigang, vice-minister of commerce, said Chery's alleged infringement and unfair competitive behaviour could not be determined according to the Chinese law and evidence provided by GM Daewoo. Zhang Qin, vice-director of the State Intellectual Property Office, also said at a press conference in September that GM Daewoo failed to apply for a patent on its designs in China. Thus, the technology was not protected in China according to the law.

The official also said that only when GM Daewoo had provided sufficient evidence to prove that Chery stole statistics from it could the alleged infringement exist, despite the similarities between the two cars. "Domestic car firms should invent their own products, instead of copying others," Jia Xinguang, chief analyst with the China Automotive Industry Consulting and Development Corp, said yesterday in an interview with China Daily.

GM sues Chinese firm for copying


General Motors is suing a former unit of Shanghai Automotive Industry Corporation for copying a car design. GM Daewoo, a South Korean unit of GM, said China's SAIC Chery Automobile had copied the Daewoo Matiz's body structure in its Chery QQ model.

GM Daewoo says the Chery QQ is too similar to its Matiz

The Korean firm said it wanted 80m yuan ($9.7m; 5.1m) in compensation. The case - accepted by a Beijing Court, according to Chinese state media - is sensitive because GM and SAIC are involved in a major joint venture. Damage limitation The QQ appears to be similar to the Daewoo Matiz (and to GM's Chevrolet Spark, which is based on the Matiz). GM Daewoo said tests showed the body structure, interior and exterior design of the QQ and many of its components were very similar to the Matiz. It added that many parts were interchangeable between the two cars. SAIC Chery denied the allegations, saying it spent more than a year developing its QQ car. It added it has up to 24 design patents on the model. GM Daewoo began suing Chery last December in Shanghai, but transferred the suit to Beijing after Chery complained on jurisdiction grounds. GM Daewoo had tried to resolve the dispute through mediation for a year and only resorted to the courts when this failed, the company said.

SAIC, which spent 67m buying car designs from collapsed UK carmaker Rover, held a 20% stake in Chery. But it sold the holding late last year in what was thought to be a damage-limitation exercise.

Lawsuits
1. Toyota Motor Corporation versus Geely.
Accusation: Geely Merrie trademark is a copy of Toyota's trademark. Date: End 2002. Court: Beijing No. 2 Intermediate People's Court, China. Claim: 14 million yuan in compensation. Judgement: The court didn't sustained any of the claims raised by Toyota. (After the court's decision Geely withdraw the Merrie logo.) Outcome: Toyota lost the case.

2. GM Daewoo Auto & Technology Co. Ltd. versus Chery.


Accusation: Chery's QQ copied the design of the Daewoo's Matiz, the two models are shockingly similar. GM Daewoo also claimed that Chery used a Matiz disguised as a QQ in a crash test for safety. Date: June 2003, December 2004. Court: Beijing No. 1 Intermediate People's Court, Shanghai No. 2 Intermediate Court, China. Claim: 80 million yuan Settlement: In November 2005 the partners reached a settlement, which solved all the disputes and all the claims have been withdrawn. The Chinese government has played a role in the negotiations, all parties highly appreciated the efforts made by the relevant government authorities.

3. Honda versus Shuanghuan Auto.


Accusation: Honda accused Shuanghuan's Laibao SRV of copying its CR-V. Date: November 2003. Court: Beijing High People's Court, China. Claim: 100 million yuan. Judgement: No hearing was ever held at the court. In March 2007 the China's State Intellectual Property Office made the decision declaring Honda's patent for design invalid, which means that Honda's outer design of the Honda CR-V would not be protected by China's IP laws.

4. Honda versus Lifan .


Accusation: Honda accused Lifan of using the name Hongda on motorcycles. Date: September 2005. Court: Beijing No. 2 Intermediate People's Court, China. Claim: 12,5 million yuan (US$ 1,5 million). Judgement: The Beijing court ordered Lifan to pay 1,47 million yuan (US$ 177.607) in damages to Honda for placing the Hongda logos on its motorcyles. Lifan was ordered to stop infringing. Outcome: Lifan lost. Second accusation: Honda claims that Lifan's LF125T-2D scooter is too similar to a design covered by its own patents. Date: May 2007. Court: Shanghai No. 2 Intermediate People's Court, China. Claim: Honda wanted Lifan to admit the infringement, make a public apology and compensate 500.000 yuan (US$ 64.767). Judgement: The motorcycle LF100T manufactured by Lifan closely resembled a Honda design. The court upheld

Honda's claim for compensation but rejected its call for public apology. It ordered Lifan to pay 300.000 yuan (US$ 39.000) in damages. Outcome: Lifan lost. Date: December 2008. Court: Shanghai No. 2 Intermediate People's Court, China. Claim: Honda requested a court decision to order Lifan to compensate 727 million yuan of its economic losses and 113 million yuan of reasonable expenses for the case. Judgement: Lifan shall bear the civil liability of stopping infringement and paying reasonable compensation for the loss of 612.600 yuan because the company has infringed Honda's valid patent in motorcycle manufacturing of some models. Outcome: Lifan lost.

5. Dongfeng Peugeot-Citroen Automobile Co. Ltd. versus Shanghai-Maple Auto Co. Ltd.
Accusation: Dongfeng-Citroen alleged that Shanghai Maple used Citroen's core chassis technology in producing its models. Date: November 2005. Court: Wuhan Intermediate People's Court, China. Judgement: We couldn't find any result of this case.

6. Shenyang Jinbei Brilliance versus Qinghuangdao Jincheng Automobile.


Accusation: Jincheng Minibus is a copy of the Jinbei Haise Aiwing. Date: January 2006 Court: Beijing, China. Judgement: Jincheng was found liable of copying the exterior appearance of Jinbei's modified HiAce. Outcome: Jincheng lost.

7. Neoplan (M.A.N. A.G.) versus Zonda Bus & Coach Group.


Accusation: Zonda's A9 Bus was a copy of a Neoplan bus named Starliner. Date: September 2006. Court: Beijing No. 1 Intermediate People's Court, China. Judgement: Zonda Industrial Group was ordered to pay 20 million yuan in compensation to Neoplan. Zonda was also ordered to stop making & selling the A9 Bus and to pay 1.16 million yuan in legal costs. Outcome: Zonda lost.

8. BMW versus Shuanghuan and European Importers.


Accusation: Shuanghuan SCEO is a blatant copy of the BMW X5. Date: June 2008. Court: Munich, Germany. Judgement: The court prohibits the importer, China Automobile Deutschland GmbH, from selling the SUV in Germany and China Automobile must destroy all models it still had in its possession. Outcome: Shuanghuan (China Automobile) lost. Date: December 2008. Court: Milan, Italy. Judgement: The Shuanghuan SCEO large SUV isn't a clone of the BMW X5. BMW lost the court action in Italy against the local importer Martin Motors. Outcome: BMW lost.

Date: May 2009. Court: High Court, Munich, Germany. Judgement: Second court tribunal hold the judgement of June 2008: China Automobile is obliged to pay penalty and destroy imported cars. Outcome: Shuanghuan (China Automobile) lost.

9. Fiat versus Great Wall.


Accusation: the Great Wall GWPeri is a copy of the Fiat Panda. (Great Wall has infringed the European patents numbered 00044722-0001 of the Fiat Panda in the design of the Great Wall Peri). Date: July 2008. Court: Shijiazhung Intermediate People's Court, China. Judgement: The exterior design of the GWPeri can be easily distinguished from the Panda. Fiat lost and had to pay US$ 1290.- court fees. Outcome: Fiat lost. Date: July 2008. Court: Turin, Italy. Judgement: Great Wall is banned from selling the GWPeri compact car in the EU. GWPeri is simply a Panda with a different front. The court imposed a euro 15.000.- fine for the first imported GWPeri and Great Wall will be penalized euro 50.000.- for each GWPeri it sends to the EU. Outcome: Great Wall lost. Date: January 2009. Court: Hebei Province People's High Court, China. Judgement: The Court dismissed a claim by Fiat alleging infringement of a Fiat patent. So the appeal was rejected. Outcome: Fiat lost. Date: June 2009. Court: Shijiazhuang Intermediate People's Court Accusation: Great Wall declares to have submitted evidence to prove that Fiat once instigated espionage to prowl into its research center and take photos of Peri small car that was still under development. Outcome: in October 2011 ceased the pursuit of Fiate, as the production of the Peri halted in September 2010. Date: June 2011. Court: Turin, Italy. Judgement: Great Wall has to compensate Fiat with nearly 30.000 euros and additional court fines. Great Wall will be prohibited from selling and advertising the vehicle in the EU, with each offense punishable by up to a fine of 15.000 euros. Outcome: Great Wall lost. In October 2011 Great Wall decided not to appeal. (Great Wall already halted production of the Peri in September 2010, and has not exported any cars to the EU since then.)

10. Goldstar versus Proton.


Accusation: Proton is being sued for alleged breach of contract by its former Chinese joint-venture partner Goldstar Heavy Industrial Co. Ltd. Date: December 2008. Court: Dongguan Intermediate People's Court, China. Claim: Goldstar is seeking about one billion yuan (US$ 147 million) in compensation. (Under joint-venture proposal that was signed in 2002, a plant was to be set up in Dongguan to produce Proton cars. Goldstar failed to obtain a license for the joint venture within three years'time. In 2006 Proton signed an agreement with

another Chinese company, Youngman.) Judgement: parties agreed to arbitrate before the Singapore International Arbitration Centre in April 2009.

11. Daimler A.G. versus Flybo and German importer.


Accusation: Flybo 6000ZK is a copy of the Smart Fortwo. Date: October 2008. Court: Stuttgart, Germany. Judgement: Import of the Flybo 6000ZK by Reva Company into Germany is forbidden. The first Flybo, confiscated by the German customs, had to be destroyed. Outcome: Flybo and its importer lost.

12. Daimler A.G. versus Shuanghuan and its European importers.


Accusation: Shuanghuan Noble (Bubble) is a copy of the Smart Fortwo. Date: December 2008. Court: Bologna, Italy. Claim: Martin Motors (the importer) is forbidden to exhibit the Bubble at the Bologna Auto Show. Temporary judgement: The court prevented Shuanghuan from showing their Bubble from making its public appearance at the Bologna Show. Martin Motors brought the Bubble to the parking lot of the Show anyway, despite the court order. Date: May 2009. Court: Piraeus, Greece. Judgement: An informed buyer would not confuse the Noble with the Smart Fortwo. The Noble differs significantly in technical specification from the Smart. Outcome: Daimler A.G. lost.

13. Nanjing Automobile Corporation (MG) versus Sports and Racing Europe (MG XPower).
Accusation: Sports and Racing Europe were infringing the MG marks for which they had no entitlement. Date: February 2010. Court: High Court, London, Great Britain. Judgement: Nanjing Automobile Corporation had acquired the rights to the MG trademarks and logos when it bought the assets of MG Rover in 2005. Outcome: MG XPower (Sports and Racing Europe) lost.

14. Landrover versus Geely (in fact: versus the Trademark Appeal Board).
Accusation: Geely illegaly filed the trade mark "Land Tiger" (Luhu) in 1999 by the Chinese Bureau of Industry and Commerce when it was in use by Landrover. The Trademark Appeal Board under the State Administration for Industry and Commerce rejected the appeal of Landrover. Landrover is now suing the Board to revoke the Luhu trademark registered by Geely. Date: February 2011. Court: Beijing Municipal No. 1 Intermediate People's Court, China