The first-ever lawsuit involving a foreign car manufacturer since China's entry to the WTO concluded yesterday.

The trial, in which Japanese Toyota sued Chinese car maker Geely, based in Zhejing Province, for trademark infringement, reached a judgment for first instance.

The Beijing No. 2 Intermediate People's Court rejected Toyota's claim, which asked for compensation of 14 million yuan (US$1.7 million) from Geely -- one of China's major economy car producers.

"The logo of Geely Group's Merry (the model name of an economy car produced by the company) is obviously different from that of Toyota, and thus cannot cause any confusion," said the final judgment.

Before yesterday's judgment, a hearing that lasted nearly an entire day was held in August.

The presiding judge for the case Shao Mingyan concluded that the logo of Geely's Merry model did not violate Toyota's logo rights.

Toyota registered its logo in 1990 and the registration is effective until 2010, according to sources with the Japanese company.

Geely registered its joint Merry trademark with Chinese characters and logo with the State Trademark Administration in 1996, but registration of the independent logo has not received authorization yet, although Geely applied for it in 2001, said sources.

The lawyer representing the plaintiff Toyota, Shi Yusheng, told China Daily that he is very disappointed at the court decision. "We will not decide whether to appeal to a higher court until we have had further discussions with Toyota," he said.

Toyota can appeal to the Beijing People's High Court within a month if the company wants to dispute the verdict.

Some industry insiders said the reason why Toyota instituted action against China's major economy car producer is that Merry is a major competitor of Toyota's Vois.

But Shi disagreed: "There is no relation between the lawsuit and Vois. Toyota sued Geely for trademark infringement, nothing else."

Sources with Geely said in a statement that the winning of the lawsuit has raised Chinese car manufacturers' confidence in investing in intellectual property rights (IPR).

Currently, Geely has developed its own engine and chassis technology. And the company has maintained its own independent brand name when using investment and technology from overseas, the statement said. Wang Zhong, the lawyer representing the accused, Geely, said that the lawsuit is a lesson for domestic enterprises on the importance of drafting IPR protection strategies.

(China Daily November 25, 2003)