Toyota infringement claim stalls in Beijing court

China

In Toyota Motor Corporation v Geely Group (unpublished), the Beijing Second Intermediate People's Court has dismissed the plaintiff's claim for unfair competition and trademark infringement. The court held that the defendant's (i) logo was not confusingly similar to the plaintiff's, and (ii) claims in its advertising that its cars are fitted with the plaintiff's engines were an exaggeration but were not unfair competition.

Toyota Motor Corporation, a Japanese car manufacturer, brought a damages action for $1.6 million against Geely Group, a Chinese car manufacturer based in Zhejiang. Toyota claimed that the logo Geely used for its Meirie line of cars was confusingly similar to Toyota's logo and infringed its registered trademark. Toyota also argued that Geely had engaged in unfair competition on the basis of its:

  • use of the advertising slogan 'Toyota power, attractive price';

  • statement that its Meirie cars are installed with an "8A-FE engine of Toyota, Japan"; and

  • references to the name Toyota in its promotional literature for Meirie cars.

The Beijing Second Intermediate People's Court held that the two logos at issue were not confusingly similar. It noted that the test for assessing whether there is a likelihood of confusion must be judged from the perspective of the relevant public. As cars are expensive products, purchased after careful consideration in terms of function, price and manufacturer, it was unlikely for confusion to occur. The court highlighted that there were no instances of consumers incorrectly purchasing a Toyota or Meirie car as a result of confusion between the two companies' logos.

The engines used in Meirie cars were supplied by Tianjin Toyota Motor Co Ltd, a joint venture between Toyota and Tianjin Xiali Automobile. Thus, the court held that although the references to Toyota in Geely's advertising were an exaggeration, they were not unfair competition.

The court also declined to consider Toyota's application for a declaration that its logo is a well-known trademark in China, stating that this was not relevant to the issues in the case.

The court ordered Toyota to pay a fee of Rmb80,000 (about $10,000), which was calculated by reference to the size of its claim.

Toyota has not yet made any indication as to whether it will file an appeal.

Rebecca Lo, Rebecca Lo & Co, Hong Kong

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