Chinese Commerce Official Says GM Has No Grounds for Piracy Complaint

BEIJING September 6, 2004; The AP reported that a top Chinese commerce official said Monday that General Motors Corp. hasn't provided enough evidence to prove that a local company copied one of its car models.

GM China says it is investigating what it sees as similarities between its Spark minicar and Chery Automobile Corp.'s QQ model.

Deputy Commerce Minister Zhang Zhigang, speaking at a news briefing to launch a one-year crackdown on rampant violations of intellectual property rights in China, said there was not enough evidence to pursue a case against the Chinese manufacturer.

"Unless GM provides further evidence to prove that Chery acquired such technology and designs through certain means ... just simple similarity in terms of exterior design isn't sufficient enough to prove that the Chinese company is guilty," Zhang said.

He said GM can still use other, less formal, means to resolve its complaint against Chery. He didn't elaborate.

Zhang's comments surprised GM, which said Monday that discussions with both the Ministry of Commerce and Chery to resolve the dispute were ongoing.

"Ministry of Commerce officials have confirmed to us that they haven't reached a conclusion regarding the merits of the case," Tim Stratford, general counsel for General Motors China, said in a statement.

"We have been in consultation with relevant Chinese government organizations regarding the results of our investigation ... (which) lead us to believe that we have a valid concern and justify our approach to seek Chinese government involvement in addressing the issue," he said.

The dispute has attracted the attention of U.S. lawmakers, including Rep. James Sensenbrenner of Wisconsin, who in January described the QQ as "an obvious knockoff" that underscored serious flaws in China's anti-piracy efforts.

But the Spark design, which GM obtained in its 2002 acquisition of South Korea's former Daewoo Motor Sales Corp., was never patented in China and thus isn't protected by China's intellectual property laws, said Zhang Qin, deputy commissioner of the State Intellectual Property Office.