The first lawsuit by a foreign car company against one of China's new, fast-growing automakers for alleged copyright violation has been thrown out by a Beijing court in a case watched closely by multinational manufacturers.
The Beijing Second Intermediate Court rejected claims from Toyota that Geely, China's largest private car manufacturer, had stolen the Japanese company's logo for use on its "Meiri" sedan and had also used its name in promoting the Chinese car.
Perhaps of greater concern for foreign groups, the court indicated it did not recognise Toyota's logo, used on cars worldwide, as a "distinctive brand in China" that required protection.
Although the decision will not set a precedent under China's legal system, it will be studied closely by other foreign carmakers that have battled to protect their intellectual property rights in the country.
General Motors (GM), the world's largest car company, is now considering whether to take action against Chery, another Chinese manufacturer, based in Anhui province, for intellectual property rights violations. GM has said it is investigating whether the two cars made by Chery were copied from designs that originated at its Daewoo unit in South Korea.
In a statement released yesterday, Geely said its victory would spur the company to invest further in its own designs and logos.
"The long march of China's national auto industry needs continuous hard work and endeavour from hundreds and thousands of companies like Geely," the company said.
Geely, which had used a Toyota engine under licence in the past, said its existence would have been under threat if it had not developed its own engine.
"Now, we have adequately accumulated some core technologies, and are capable of producing engines of a higher technology content ourselves," the statement said.
Toyota's setback will not affect its plans to invest $2.5 billion (€2.34 billion) in China, where it has set a target of 10 per cent market share by 2010. Toyota said it was studying the judgment. Other foreign car-makers maintained a rosy outlook for the sedan market.
