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Old 05-29-2007, 10:03 AM   #1
erik (laofan), cmvdc
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Default intellectual property

EDITORIAL JUST AUTO =====================================

The Chinese automakers’ propensity to ‘borrow’ designs from
others is pretty widespread. The practice slashes product
development costs and if the car is going to be on sale in
the domestic market only, the company that has had its
intellectual property raided will probably not want to
object too strongly.

Even if it does decide to do something about it, that
means negotiating the arcane Chinese legal system, which
will take time and might not yield a meaningful result
anyway. It could also cause political difficulties and many
firms, understandably, decide on a do nothing strategy.

Just how widespread is the practice of duplicating foreign
firms’ designs and technology in China’s auto industry?
That’s hard to say as there will also be IPR infringements
under the skin that are more difficult to see than the
vehicle body-shell examples of the practice.

However, Western manufacturers might be hoping that the
Chinese copycat modus operandi will eventually give way to
genuine indigenous innovation. The expectation is that as
the Chinese automakers develop, they will increasingly look
to design and engineer their own vehicles (or get a foreign
design house to do it for them, as is already happening in
some cases), especially with an eye on higher export
volumes. The more blatant rip-offs will gradually disappear,
the thinking goes, as the Chinese auto industry grows in
global terms.

But that will be a long process and I suspect that there
will always be some divergence between Western firms and
Chinese ones in terms of attitudes to intellectual property
rights. It’s partly a cultural thing.

When visiting China a fun game to play is spotting the
copies. Sometimes they are ‘Frankencars’ that pay tribute to
Chinese reverse engineering capabilities coupled to an
improvisation or make-do mentality. You can imagine the
conversations that go on in the product engineering
departments. “The full Honda CR-V two-way tailgate is just
too expensive for us to make – let’s re-do the whole rear
end from the B-pillar back…. isn’t there an old Kia truck
with very similar proportions? Check the backlist.
Cut’n’shut.”

My attention was drawn to another vehicle doppelganger
last week. I don’t know how well the (Toyota owned) Scion xB
is doing in California, but it always struck me as a strange
looker, more like a domestic appliance than a car. However,
its boxy appearance is very, very distinctive. Copying that
model isn’t exactly a discreet move that would keep the
copying under the radar. It’s right in Toyota’s face and
begs the question: what will Toyota do about it, if
anything? The Great Wall Coolbear looks like a pretty
straightforward rip-off.

What a splendid name for a vehicle though. You can see the
Coolbear in all its glory in the image gallery accompanying
this article – another ‘Bursa special’ (and I might just
start calling him Coolbear – not that he’s a copy, that
lad’s a definite one-off).


Until next time...

Dave Leggett, Managing Editor
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Old 03-23-2019, 11:57 AM   #2
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Default Re: intellectual property

Thanks Erik for that insightful article by Dave Leggett. it only took me twelve years for me to find it.
But I always knew you were the one that brought our attention to the early Intellectual Property Rights issues in China.
And now we see yet another, rare case, reported by DMitra on 3/22/19, that has resulted in an apparent just outcome. That is the Landwind (X7) vs. JLR story.
I just hope that DMitra's post gets the exposure it deserves.
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Old 03-24-2019, 09:24 AM   #3
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Default Re: intellectual property

Hello Lawrence, one thing struck me in the Land Rover- Landwind case: the idea that you can't win a case in China, as Jaguar Land Rover already announced in 2016. On my "Lawsuits" page on my website (https://www.chinesecars.net/free-information/lawsuits; today updated) you can find several examples of foreign companies 'winning' in China:
2016 BMW versus Deguo Baoma and Chuanjia
2011 Land Rover versus Geely (Luhu name)
2006 Neoplan (MAN) versus Zonda
2005 Honda Motorcycles versus Lifan (Hongda)

Especially the Neoplan case was important. From all the cases you can tell that it is extremely important to register your patents as soon as possible in China.
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Last edited by erik (laofan), cmvdc; 03-24-2019 at 09:52 AM.
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Old 03-25-2019, 03:46 AM   #4
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Another interesting article, undated but it looks like it has been written in 2016:

Jaguar Files a Copyright Infringement Case in China

By MMLC Group, China
Law Firm Website: www.mmlcgroup.com
Call +86 (10) 8515-1091

Since 2008, China has held the largest automotive industry in the world in terms of automobile unit production. While this success historically has been due to opportunities for joint ventures with companies such as Volkswagen, Audi, General Motors, and Toyota, recently, local brands have been increasing their role in the automotive market.

Currently, local brands such as BYD, Chery, Geely, Great Wall, and JMC have successfully developed their presence across China. The increase of the automotive industry is in line with China’s economic goals, as was expressed in China’s 13th Five-Year Plan, where it stated China’s intentions to invest more in the automotive industry in terms of research and development,


FIND MORE LEGAL ARTICLES
Search alternative energy vehicles, and the increase of exported vehicles. However, a major issue that has risen along concurrently with the exponential growth of the car industry is the increase in automotive clones in China of foreign brands and their models. A recent case involves Jaguar Land Rover, who is currently suing a Chinese automaker for copying one of its designs, the Land Rover.

In the recent case of Jaguar Land Rover and its lawsuit against Jiangling Motor for the copying of its Range Rover Evoque model to create the Jiangling Motor LandwindX7 SUV, Jaguar Land Rover’s lawsuit will be surrounding issues of copyright and unfair competition. While many have expressed doubts of Jaguar Land Rover’s odds of winning due to a belief in China having weak intellectual property and competition laws or a tendency by local Chinese courts to favour their own, the law in China and similar other cases show there may be hope.

Copyright Law
There are a number of international agreements surrounding the protection of copyright rights. These include the Berne Convention for the Protection of Literary and Artistic Works (the “Berne Convention”), the Universal Copyright Convention Agreement on Trade-Related Aspects of Intellectual Property Rights, and the WIPO Copyright Treaty. Most importantly, under Article 2 (1) of the Berne Convention, the minimum standards of protection relate to the protection of works and rights, as well as to the duration of the protection, stating that protection must include every production in the literary, scientific and artistic domain, whatever the mode or form of its expression. Also, under Article 2 (6) and (7), it effectively provides for the protection of such rights, and requires all countries to recognise any copyrights held by the citizens of the signatory countries.

China is a signatory to the abovementioned treaties, and such accessions indicate China has complied with the necessary regulations and requirements, as well as integrating the relevant provisions in its Copyright Law of the People’s Republic of China. Under Article 1 of the Copyright Law, it states that the law is enacted for the purpose of protecting the copyright of authors in their literary, artistic and scientific words and the rights and interests related to copyright. Furthermore, under Article 2 of the Copyright Law, it states that the copyright enjoyed by foreigners or stateless persons in any of their works under an agreement concluded between China and the country to which they belong or in which they have their habitual residence, or under an international treaty to which both countries are parties, shall be protected by this Law. Therefore, China seeks to protect the rights of foreign companies and individuals if they belong to countries which have signed the same international convention or treaty as China. Specifically, Article 2 of the Copyright Law states that foreigners and stateless persons whose works are first published in the territory of China shall enjoy the copyright. Also, any work of an author, which is first published in a member country of an international treaty to which China is party, such as the Berne Convention, shall be protected by this Law.

Under Article 3 of the Copyright Law, the term ‘works’ includes works of literature, art, natural sciences, social sciences, engineering and technology, which are created under subsection (u) graphically, such as drawings of engineering designs and product designs, maps and sketches, and model works. Therefore, a design of a car is protected under the Copyright Law, and perhaps under the trade dress provisions of the Anti-Unfair Competition Law of the People’s Republic of China, which are currently going through several amendments.

(please read further on the next tread)
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Old 03-25-2019, 03:47 AM   #5
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Default Re: intellectual property

In China, the concept of ‘works of applied art’ is not clearly regulated or provided for under legislation. However, courts across China have consistently held that works of applied art are entitled to legal protection as works of fine art, which is covered by Article 4(8) of the Regulations for the Implementation of the Copyright Law of the People’s Republic of China, where it states works of fine arts to mean two or three-dimensional works of the plastic arts created in lines, colours or other media which impart aesthetic effect, such as paintings, works of calligraphy and sculptures. For example, in Judgment Guangdong Higher Court Civil III Final Instance No. 45, it was held that a work of applied art must qualify as a work of fine art where it meets the artistic and creative requirements for works of fine art, which is therefore protected under the Copyright Law.

Also, in Beijing No.2 Intermediate Court IP First Instance No. 145, it outlined the importance of utilitarian functions in works of applied art, and stated the need for the work to be both useful and artistic. Similarly, in Guangxi Higher Court Civil III Final Instance No.62, it was emphasised that there are two aspects in works of applied arts: the functional aspect, which includes the purpose and the functions, and the artistic aspect, which includes the shape, design, colour, decoration or the aesthetic expression of the design of the work. Therefore, where a work is both functional and artistic, such as a design of a car, it is protected under the Copyright Law for a term of 25 years.

Furthermore, applying for protection under the Copyright Law may provide for better protection due to the longer term it provides, as the Patent Law of the People’s Republic of China allows for the protection of design patents to be only 10 years. However, dual protection exists under the Copyright Law and the Patent Law, which was confirmed in the case No.279 (INTERLEGO AG), where the Beijing Higher Court held that the better interpretation was that there is no evidence showing China prohibits dual protection to works of applied art, therefore there is nothing preventing a work of applied art to acquiring protection under the Patent Law and the Copyright Law simultaneously and successively. It is thought that such protection will be granted for a period of 25 years.

Therefore, the laws surrounding the issue of copyright in relation to the design of a car are quite solid in China, and should offer adequate protection. However, it is the practical application of such laws that cause complications and uncertainty. In an alleged copyright infringement situation, the burden of proof is on the company alleging copyright infringement to prove a copying has resulted by assessing any objective similarities, and deciding whether they are the result of independent creation, or whether they were derived from the original design. Therefore, there must be a causal connection between the two works, which can be difficult to prove.

There have been a number of cases in China by foreign automakers alleging copyright infringement against local Chinese automakers. They include the following:
• In 2007 the China’s State Intellectual Property Office made a decision regarding Honda’s accusation of copyright infringement against Shuanghuan’s Laibao SRV of its CR-V, holding Honda’s patent was invalid, and therefore the Honda’s accusation had no merit;
• In 2007 in the Shanghai No. 2 Intermediate People’s Court in China, Honda Motor Co. won its copyright and patent infringement lawsuit against Lifan Industry (Group) Co., with an award of RMB 300,000 in damages; and
• In 2008 in the Shijiazhuang Intermediate People’s Court of China, Fiat Chrysler Automobiles lost a case against Great Wall Motors for failing to prove the Great Wall’s GWPeri was a copy of their Panda, as the court found the exterior design of the GWPeri was easily distinguishable from that of Panda’s.

The above cases show there are a variety of decisions in China, with many depending on the circumstances of the case, such as whether the parties have valid patent or design rights, and a thorough examination of the cars to determine if there has been a copyright infringement. However, due to the difficulties of proving a car has been copied, many cases result in a loss for the foreign automaker. Also, a decision by the court of copyright infringement in favour of a foreign automaker may still result in an unsatisfactory outcome, for example, recently, Honda Motor Co. won a 12-year battle against a Chinese automaker in a lawsuit alleging the Chinese automaker violated Honda’s design rights in relation to its CR-V sport utility model. However, Honda, having claimed $45 million in damages, only received an award of $2.4 million.

Therefore, as a way to secure their rights and prevent further losses, foreign automakers have instigated similar lawsuits against Chinese automakers for copyright infringement in foreign countries, with many cases including the following:
• In 2008 in Turin, Italy, the Great Wall was banned from selling its model GWPeri in the EU, as the court found the GWPeri was an exact copy of Fiat’s Panda model, but with a different front component;
• In 2008 in Bologna, Italy, in Daimler A.G.’s lawsuit against Shanghuan (China Automobile) Co. where they alleged Shuanghuan Noble (Bubble) was a copy, the court found Shuanghuan guilty and prohibited them from attending the Bologna Auto Show; and
• In 2009 in Munich, Germany, BMW won its lawsuit against Shuanghuan (China Automobile) Co. when the court prohibited the Chinese automaker from selling its SCEO SUV model in Germany and to destroy any already imported models due to its blatant copy of the BMW XS.

Therefore, in the current case of Jaguar Land Rover against Jiangling Motor for the alleged copyright infringement of its Range Rover Evoque model to create the Jiangling Motor Landwind X7 SUV, there are many factors to take into account in speculating the potential outcome of the case. Provided the courts in China strictly abide by the Copyright Law and the international treaties they have been assigned to uphold, Jaguar Land Rover has a strong case due to the Landwind X7 SUV containing many of the same features, which can be analysed objectively.

Conclusion
China, as the second largest economy in the world, has seen many of its industries grow at an alarming rate. Its automotive industry, now the world’s largest, is one of them. However, despite China’s constant updating and improvement of its intellectual property laws to ensure a strong intellectual protection rights regime, the automotive industry suffers extensively from allegations of copyright infringement. In the upcoming lawsuit of copyright infringement by Jaguar Land Rover against Jiangling Motor, it is hoped that the Chinese courts will reveal further in their reasoning of the factors and principles they rely upon in determining their decision.

ABOUT THE AUTHOR: Matthew Murphy
Matthew Murphy is a Partner in the MMLC Group.
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Old 03-25-2019, 04:26 AM   #6
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To show how difficult these cases are:

Honda Motor Co. Ltd. Made a Success in an Administrative Dispute Case Re-tried by the Supreme People's Court Concerning the Invalidation of a Patent for Design

Feb 16, 2011 (https://www.ccpit-patent.com.cn/node/2781)

On Feb. 13, 2002, the Japanese Honda Motor Co. Ltd. was granted by the State Intellectual Property Office of China (hereinafter referred to as SIPO) with a patent for design No. ZL01319523.9 titled as "Automobile". Shijiazhuang Shuanghuan Automobile Co. Ltd. and Hebei Xinkai Automobile Co. Ltd. filed respectively in Dec. 2003 and Dec. 2004 a request for the invalidation of the patent for design with the Patent Reexamination Board under the SIPO. Having made examination, the Patent Reexamination Board made a decision in 2006 declaring that the patent for design be invalid.

Unsatisfied with the above-mentioned decision made by the Patent Reexamination Board, Honda Motor Co. Ltd. instituted administrative proceedings with the Beijing First Intermediate People’s Court and appealed to the Beijing High People’s Court. The Beijing High People’s Court made the final administrative judgment on Sept. 28, 2007 to uphold the decision made by the Patent Reexamination Board.

Still unsatisfied with the above-mentioned final judgment made by the Beijing High People’s Court, Honda Motor Co. Ltd. entrusted CCPIT Patent & Trademark Law Office to make a further study of the case, and authorized CCPIT Patent & Trademark Law Office to file with the Supreme People’s Court a petition for retrial of the case. After being entrusted and authorized by Honda, the CCPIT Patent & Trademark Law Office formed up a special team of patent attorneys, which, by making in-depth studies of the case and the applicable law and regulations and getting at the core of the complicated facts and legal issues, formulated a well planned and considered strategy and submitted a petition for retrial to the Supreme People’s Court on July 04, 2008.

After holding a hearing attended by the parties concerned on Dec. 05, 2008, the Supreme People’s Court concluded that the petition submitted by Honda Motor Co. Ltd. did meet the conditions as provided for by Art. 72 of the Interpretations of the Supreme People’s Court on Some Issues concerning the Application of the Administrative Procedure Law of the People’s Republic of China, i.e. “the law and regulations are incorrectly applied in the original judgment”, and in accordance with the provisions of Art. 63 of the Administrative Procedure Law of the People’s Republic of China, Art. 72 (Parag. 2) of the Interpretations of the Supreme People’s Court on Some Issues concerning the Application of the Administrative Procedure Law of the People’s Republic of China, and by reference to Art. 185 of the Civil Procedure Law of the People’s Republic of China, the Supreme People’s Court made an administrative ruling deciding that the present case shall be retried in the Supreme People’s Court and the effectiveness of the original judgment shall be stayed during the retrial proceedings.

The Supreme People’s Court held a court-room trial on Jul. 15, 2010, and then, rendered the administrative judgment on Nov. 26, 2010, revoking the administrative judgment made by the Beijing High People’s Court, the administrative judgment made by the Beijing First Intermediate People’s Court and the invalidation decision made by the Patent Reexamination Board.

The Supreme People’s Court considered, via retrial, that the principle method, as stipulated by the Guidelines for Patent Examination, to determine whether or not two designs are identical or similar, is to proceed with an over-all observation of the design as compared and the prior design based on the knowledge level and cognitive ability of an ordinary consumer and make a comprehensive judgment on whether or not the difference therebetween is significant on the visual effect of the design of the product. An ordinary consumer has such features as having some common knowledge of designs of the products similar to or identical with the design as compared, and having some ability to distinguish the differences between the products of the designs as compared in their shapes, patterns and colors, but will not notice the minor change in the shape, pattern and color of the products. So-called “common knowledge” means the understanding of the designs of the related product, not limited to elementary and simple knowledge, but with no designing capability. The so-called “over-all” in the term “an over-all observation” covers all the design features of the visible part of a product, rather than a specific part thereof. The so-called “comprehensive judgment” refers to a judgment made on the basis of a comprehension of all the factors that will affect the overall visual effect of a product design.

In the present case, as this type of cars in dispute have similar contours, those common design features have limited visual effect on the ordinary consumer of this type of cars, however the variations of designing features in such portions as the front, the sides and the rear thereof may draw more attention of ordinary consumer of these cars. Thus, as compared to the evidence 1, the design of the present patent has differences in such decorative portions as the headlight, foglight, apron plate, grid, side windows, tail lights, rear bumper, ceiling profile. In particular, the designs of the headlight, foglight, apron plate, grid, side windows, tail lights, rear bumper, the connection between the side and rear window glass and the tail lights and the transition from the upper portion to the lower portion of the car body are all prominent, eye-catching and of stronger visual impact. Such differences are obvious to the ordinary consumer of this type of cars in dispute and sufficiently capable of distinguishing the design of the present patent from that of the evidence 1 in overall visual effect.

Although the invalidation decision, the first administrative judgment and the final administrative judgment in respect of the present case all affirm that differences exist between the present patent and the evidence 1, the design features of said portions are excluded from the “overall” design of the cars as these differences were regarded as pertaining to “minor differences”, and the overall contour of a car was regarded as having the most significant visual effect on the ordinary consumer of cars instead of this particular type of cars in dispute, which erroneously leads to the conclusion that the designs of the present patent and the evidence 1 are similar and the present patent be invalidated. To sum up, as the invalidation decision, the first administrative judgment and the final administrative judgment in respect of the present case have erroneously applied the laws and regulations, a correction has to be made.

Since the attorney team of the CCPIT Patent & Trademark Law Office made a thorough analysis on the applicable law and the facts of the present case, and made an elaboration on the crucial issue of application of the law in the petition for retrial, the present case successfully drew from the Supreme People’s Court an attention to the mistakes in the prior invalidation decision and administrative judgments, and a justifiable judgment was finally obtained from the Supreme People’s Court on the present case. The judgment rendered by the Supreme People’s Court on the present case not only corrects the mistake made in the prior decision and judgments and effectively protects the legitimate rights of the party concerned, but also made clarifications on substantial issues in respect of determination of similarity and identity of designs, such as the features of an ordinary consumer, “common knowledge”, “over-all observation” and “comprehensive judgment” etc.. The judgment of the present case therefore is of directive significance in the trial of similar cases.
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Old 03-27-2019, 10:31 AM   #7
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Among the Japanese, who tread on thin ice in China, Honda has been persistent and diligent in protecting its IP. On the other hand Toyota, Suzuki, Mitsubishi, and Nissan, not so much.
When it comes to these IPR issues, in addition to property protection there is plenty of image protection to go around.

FYI, the State Intellectual Property Office website is:
www.sipo.gov.cn

It won't be long before plaintiffs are no longer limited to foreign firms, but include competing domestic automakers as well.
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