As automobiles are not regarded as a common consumer good in China, a standard to decide whether two auto trademarks are similar has grabbed the attention of vehicle buyers, dealers and repairmen, said Shao Mingyan, the chief judge in the trademark dispute between Toyota and Geely.

Shao is the deputy presiding judge of the No 5 Civil Division of the Beijing No 2 Intermediate People's Court.

She made the remarks to explain why Toyota, a Japanese auto maker, lost the lawsuit suing Geely, a domestic auto maker, of trademark infringement late last year. The judgment is the first that Chinese courts have ever made over foreign-related vehicle IPR cases.

Although the legal system in China is not a case law system, experts believe that Shao's judgment will have a profound influence in following automobile IPR lawsuits.

The logo of Geely Group's Merrie (the trademark type of economy car produced by the company) is very similar to that of Toyota, constituting infringement of the plaintiff's well-known trademark, said Shi Yusheng, a lawyer representing Toyota.

Shi listed a report by the Beijing-based Shaohai Market Investigation Company as proof, which says that "most consumers considered the vehicles with the logo of Merrie as related to Toyota."

Among the 317 consumers surveyed, nearly 67 per cent thought the Merrie logo was Toyota, but only 6.9 per cent recognized it as Merrie produced by the Geely Group, according to Shi.

But Shao concluded that the people being surveyed should be consumers or potential consumers of automobiles, instead of people who may have no idea of automobiles or their logos.

"According to Chinese law, similar trademarks mean that the charged trademark is easy to mislead consumers in thinking it has special relation with products of the registered trademark of the plaintiff," Shao said.

"Comparing the two logos of Toyota and Geely, although the exterior outlines are both elliptical, the Japanese logo is simple whereas the Chinese logo is comparatively more complicated," she said.

Thus automobile consumers and dealers can recognize the difference between the two logos and will not confuse them, the court decided.

"Automobile products behind the two logos have great differences in price and consumers, so buyers will unlikely believe the logo of Geely's Merrie cars is related to Toyota," Shao said. "The two brands are different in many aspects, especially in price," she said.

"Toyota's proposition that Geely's logo of Merrie cars infringes its trademark right lacks legal basis and fact," the judgment said.

Meanwhile, the appeal from Toyota for Geely's alleged unfair competition for using a character of Toyota in its advertisement of Merrie cars was also rejected by the court.

Business operators are forbidden to make false promotion through advertisement on quality, ingredients, function, usage, producer, validity date and production place of goods, according to the Law Against Unfair Competition.

Geely said in its advertisement that the Merrie cars are equipped with Toyota engines.

The court has ascertained the fact that engines used in Merrie cars are produced by Tianjin Toyota.

The technology used in the engine produced by the Tianjin Toyota is acquired from Japan Toyota.

Tianjin Toyota Motor is a joint venture established by the Japanese company.

The court drew the conclusion that Geely's advertising consisting of the name of Toyota is not false promotion prescribed in the Chinese law.

It will not result in any unfavourable influence to the brand of Toyota and will not damage its legal interests, Shao said.

(China Daily 09/06/2004 page5)