Toyota Loses Lawsuit in China

Toyota Motor Corp., which plans to invest $2.5 billion in China by 2010, lost its lawsuit against that country’s biggest private carmaker, which it claimed copied the Japanese automaker’s logo.

Today’s ruling raises concerns, particularly among U.S. companies, about China’s ability to protect intellectual property.

Toyota accused Geely Group Co. of using a logo on the hood, hubcaps, steering column and boot of its Merrie cars that looks like Toyota’s stylized “T” marque, the Japanese automaker’s lawyer, Shi Yusheng, said.

“I am very disappointed with the verdict,” Yusheng said.

“The main judgment is not in line with the facts that we provided to the court. As long as there is the possibility that consumers can mistake Geely’s logo for Toyota’s trademark, it should be taken as a violation of Toyota’s rights.”

Toyota’s suit against Geely was seen as a test case for overseas automakers seeking to protect their trademarks and designs in China, the world’s fastest-growing major auto market.

The court’s decision is a setback for other companies, including General Motors Corp., which is “investigating” whether Chery Automobile Co.’s QQ minicar has breached copyright rules. The QQ resembles the U.S. company’s Chevrolet Spark.

Geely, based in the eastern province of Zhejiang, started out as a maker of refrigerator parts and switched to making cars in 1999.

Since then, it has produced about 70,000 passenger cars and said it aimed to make 100,000 cars this year, tripling that number to 300,000 by 2005.

Wang Zhong, a lawyer for Geely, described the verdict as “fair” and “objective.”

Toyota, Japan’s largest automaker, was ordered to pay $9,708 in court costs by the Beijing Intermediate Court.

Toyota said it has not decided whether it will appeal the verdict. It must do so within 30 days, the court said.