China Car Scene Heating Up -Toyota's Lawsuit vs China's Geely Tossed Out

SHANGHAI, Nov 24, 2003; Reuters reported that a Beijing court has thrown out a lawsuit filed by Toyota (Tokyo:7203.T - News) against China's sole private car maker which accused the firm of infringing the Japanese giant's copyright, Japan's top car maker said on Monday.

Toyota Motor Corp accused Geely Group last December of sporting a logo similar to the well-known stylised "T" on its "Meiri" sedans, saying it could mislead customers -- a charge Geely dismissed.

A triumphant Geely cheered the decision.

"As the leading brand for Chinese economy cars and a prominent representative of the people's car industry, Geely has always relied on its own brand and intellectual copyright," the company said in a statement.

Experts say inadequate enforcement of intellectual property rights in China is a worrying issue as foreign firms invest in the country's liberalising markets.

Auto makers such as Toyota, General Motors Corp and Volkswagen AG have invested billions of dollars in China, the world's fastest growing major car market. Toyota would say little on Monday.

"We were turned down," Toyota spokeswoman Sun Tuoya said. "We have to look more closely at the judgment before deciding what to do next."

Geely, based in the booming eastern province of Zhejiang, said it treated the lawsuit as a learning opportunity.

Toyota lodged the lawsuit after Geely did not respond to a request to stop using the logo. It had demanded 14 million yuan ($1.69 million) in compensation from Geely, a fast-growing company eyeing a listing at home or overseas.

Geely -- headed by Li Shufu, ranked one of China's richest men in 2002 -- dismissed the suit as "utter rubbish" at the time.

Toyota's dispute with Geely is not the first in China's booming car sector, where sales are expected to surpass the two million mark this year, double that of 2002.

General Motors is investigating media reports that two models made by SAIC-Chery, in which its main China partner Shanghai Automotive Industry Corp owned a 20 percent stake until recently, looked similar to its own models.

Industry sources said Shanghai Automotive had become increasingly embarrassed by the behaviour of Chery and was looking for a way to divest itself of its stake -- given by Chery for free in 2001 in return for the right to use its brand and technology.