Brand debate

South Korean home appliance maker LG Electronics Inc is suing the local arm of China's Haier Electronics Group for using an air-conditioner brand LG says was its registered trademark, according to Daily Business News.

LG, the world's biggest air-conditioner maker, says China's Haier has been selling air conditioners under a "2in1" brand, for which it owned the rights.

The South Korean company says Haier is misleading consumers and that if the alleged violation is not stopped, it will hurt LG's sales.

A Haier spokesperson in Qingdao declined to comment on the issue.

Haier made its entry into the South Korean market in 2003 and was already growing rapidly in 2004.

The appliance maker, which is China's largest, said last year that it would bank on its low price strategy to become the top three home appliance brand in South Korea by 2010. Meanwhile, the Qingdao-based company is on the way to building a network of 600 sales outlets and 200 service stations.

The Haier model using the "2in1" brand was launched in the end of last year in South Korea and has seen its sales volume surge over 50 per cent compared to the same period last year.

Haier is aiming to boost sales about 15 percent this year, with foreign sales doubling that rate as it seeks out new markets.

Haier has been one of the few Chinese companies to successfully export its name overseas. Its Haier-brand products now account for more than 95 per cent of foreign sales.

LG also said in the statement it plans to file a separate lawsuit later to claim damages from Haier after the court delivers a verdict on the injunction request, which it expects by the end of August or September.

Intel trial

A local court has started the anti-monopoly trial of an accusation against Intel Corporation, the world's largest chip marker, for impeding the technological development of a domestic firm.

The Beijing No.1 People's Intermediate Court, which accepted the case on April 1, started the trial on July 21.

Beijing Donjin Xinda Technology Co Ltd, a wholly owned subsidiary of Shenzhen Donjin Communication Tech Co Ltd, is suing Intel for allegedly violating relevant Chinese laws including the TRIPS (trade-related aspects of intellectual property rights) agreement of the World Trade Organization and the Contract Law.

The Chinese company's argument lies in an allegation that the protocol of Intel's Inter Dialogic Systems Release 5.1.1 software (SR5.1.1) has strictly restricted its users by binding the software to the company's own hardware products. In other words, Intel's customers cannot use hardware produced by a different company.

Donjin said earlier that Intel's action has formed a technology monopoly, going against the interests of consumers and hurting fair competition.

The result of legal action against Intel will directly affect the verdict of a running lawsuit brought by Intel in December 2004.

"We are still waiting for the verdict from Shenzhen Intermediate People's Court," said Zhang Suzhen, the company's spokesperson in an interview with the Beijing News.

Intel has accused Donjin of allegedly copying the patented header files from its software SR5.1.1 used in circuit boards running touch-pad telephone systems. They filed the case at the Shenzhen Intermediate People's Court.

This case hinges on a dispute over the compatibility of some of Donjin's products with Intel's software, and over whether users of Intel's communications cards can switch to Donjin's products without needing to alter their existing programs.

Intel condemned this as illegal and requested that the court slap a permanent injunction on Donjin prohibiting it from either manufacturing or selling the products in question as well as paying a compensation of US$7.96 million.

Donjin denied Intel's allegations and defended their move as an act to help customers.

Toy lawsuit

BMW, a German-based automaker, lost a case against a local toy company, which allows the toy maker to produce car models similar to a BMW design.

The German company applied to the State Intellectual Property Office (SIPO) for a car design patent that was granted in 2000.

On 19 June 2003, BMW sought to change the registration to specifically apply to a model car. However, Jinjiang Toy Company, a toy maker in Shantou of South China's Guangdong Province, applied to register a similar design for a "toy car." That patent was granted by SIPO on 4 August 2003, two days before BMW's application.

BMW then sought to invalidate Jinjiang's design patent, as it is virtually identical to BMW's registered model. But Beijing No.1 Intermediate People's Court ruled that as BMW's registration had applied to cars, rather than toy cars, Jinjiang's registration would stand.

(China Daily 07/31/2006 page9)