The first-ever lawsuit involving a foreign auto manufacturer in China since the country's entry to the World Trade Organization went to trial yesterday in the Beijing No 2 Intermediate People's Court, with Japanese Toyota suing Chinese car manufacturer Geely for trademark infringement and illicit competition.

Merry logo

Toyota logo

No verdict was reached at the first hearing, which lasted for nearly one day.

Toyota has asked for 14 million yuan (US$1.7 million) in compensation.

"The logo of Geely Group's Merry (trademark of a model of economically affordable car produced by the company) is very similar to the Toyota logo, constituting infringement of our client's well-known trademark,'' Shi Yusheng, the lawyer representing the plaintiff Toyota said in court.

As proof, Shi listed a report by the Beijing-based Shaohai Market Investigation Company which says that "most consumers consider that vehicles with the Merry logo have connections with Toyota.''

Among the 317 consumers surveyed, nearly 67 per cent thought that vehicles with the Merry logo were Toyota products, while only 6.9 per cent identified such vehicles as Merrys produced by the Zhejiang-based Geely Group, according to Shi.

The accused Geely Group argued that, "the report lacked factual evidence.''

"The investigation cannot be considered authentic as the questions were weighted to suggest to the people surveyed the answer the investigators wanted,'' said Wang Zhong, the lawyer representing Geely, who also pointed out that the investigation by the Shaohai Company had not been notarized.

The accused further listed another investigation on the same issue to support their stand.

A research report by the famous polling company Horizon Research showed that 44.6 per cent of the surveyed people recognized Merry cars when shown pictures of them, and only 7.2 per cent misidentified them as Toyotas or Xialis, another domestic brand. The remaining 48.2 per cent said they did not know the car at all.

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 character and logo with the State Trademark Administration in 1996, but registration of the independent logo has not been authorized since Geely applied in 2001. Toyota objects to Geely's use of the logo.

Some industry insiders said the reason why Toyota has launched the action against China's major economy car producer is that the Merry is becoming a major competitor of Toyota's Vios sedan.

Both use the 8A engine produced by Tianjin Toyota, but the price of the Vios is twice that of the Merry.

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