IP protection for auto exterior design

By Nancy Nan, AnJie Broad Law Firm
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Automotive energy, particularly when involving new energy, is an IP-intensive industry. Effective management and use of IP are indispensable to China’s automotive energy companies. Protected trademarks, patents, copyrights, domain names, trade secrets and right to use give their owners an edge in technology or branding, which often prove financially rewarding. Moreover, in cases of dispute, accurate and precise judgments on intellectual property related issues could help a company reach a settlement economically at right time if necessary, in order to avoid massive compensation, potential loss of reputation, and to dedicate vast amount of energy and time to continue processing the case.

Nancy Nan, AnJie Broad Law Firm
Nancy Nan
Partner
AnJie Broad Law Firm

Companies gain the legal right to use an IP by independently or jointly developing the IP, obtaining license or acquiring the IP or its owner. The accumulation, registration, management and protection of IP is a mighty tool for companies in their global expansion and competition. This article will briefly introduce China’s IP legal system, followed by an analysis of several key IP cases involving automotive exterior design and the opinions of the courts.

Q: How is IP legally protected in China?

A: China’s IP protection legal system consists of the Constitution, the Patent Law, the Trademark Law, the Copyright Law, the Anti-unfair Competition Law and many other laws, rules, regulations and normative legal documents. The Civil Code, effective from 2021, further clarified the scope of IP and punitive measures for infringement, while also improving on the norm of contracts to better protect IP.

Q: What are some of the high-profile disputes over automotive exterior design? What are the core opinions derived from them?

A: The following is a brief case analysis of how exterior design of vehicles could be protected from the angles of patent, copyright and anti-unfair competition.

PATENT

Dispute: A is the patentee of the disputed automotive exterior design, and the patent remained valid throughout the proceedings. A claimed that the X-Y model of vehicle jointly manufactured and sold by B Motors and B Auto in Shijiazhuang fell within the protective scope of their patent, and the companies should be liable for patent infringement. A subsequently filed a lawsuit in the High People’s Court of Hebei Province against the two companies and B NEV, requesting an order to cease infringement and compensate for losses.

Summary of judgment: the lawsuit was dismissed.

Opinion of the Supreme People’s Court: Whether the defendants’ automotive exterior design violated the Patent Law primarily depends on the visual difference, represented in the design characteristics and their combined effect, between the allegedly infringing product and the disputed patent, and whether such differences are sufficient to distinguish the two among common consumers. If sufficiently distinguishable, the patent was not infringed upon.

COPYRIGHT

Dispute: British automobile manufacturer and distributor C finished the exterior design of its D model in February 2009, and subsequently revealed it at the 8th Guangzhou International Automobile Exhibition in December 2010. In 2014, J Motors Corp launched their L X7 model, which was marketed to the public in co-operation with company L. C filed a lawsuit claiming that J Motors infringed upon the copyright of the exterior design of D model.

Summary of judgment: The first instance judgment of Chaoyang District People’s Court of Beijing Municipality was to dismiss the lawsuit, subsequently upheld by the Beijing Intellectual Property Court (Beijing IP court).

Opinion of the Beijing IP court: Whether the defendant’s automotive exterior design violated the Copyright Law primarily depends on if the design met the minimum requirement for being an original work of art. In other words, is it acknowledged by the general public as a work of art instead of an industrial product? Only a work of art can be protected by the Copyright Law.

ANTI-UNFAIR COMPETITION

Dispute: C alleged that its D model had garnered considerable market awareness and familiarity in China. It is uniquely designed and decorated in terms of roof, outline, hood and silhouette. Having been marketed and sold, the design is able to differentiate the source of goods, which puts it under the “decoration with certain influence” category in the Anti-unfair Competition Law. By producing, promoting and selling the L X7 model, J Motors and L confused the customers by adopting the identical or similar decoration of C, constituting unfair competition.

Summary of judgment: The defendants were ordered to immediately cease any unfair competition, including the production, display, pre-sale and sale of certain vehicles of designated models. In addition, an announcement shall be published on a designated official website and China Automotive News – for no less than seven days for online media- to eliminate the adverse effects caused to C. J Motors was further ordered to compensate C with RMB1,273,275.655 for economic losses and RMB226,724.345 for reasonable expenses within ten days from the effective date of the judgment.

Opinion of the Beijing IP court: Whether the defendants’ automotive exterior design created confusion under the Anti-unfair Competition Law primarily depends on:

    1. If the infringed design constitutes decoration with certain significance and influence;
    2. if the allegedly infringing design used such decoration;
    3. if the use of such design creates any general confusion or mix-up among the public. If the answers to the above questions are all “yes”, it is considered an act of confusion violating the Anti-unfair Competition Law.

Nancy Nan is a partner at Anjie Broad Law Firm

Dong Xiao Zhao Huili AnJie Law Firm International arbitration

19/F Tower D1, Liangmaqiao Diplomatic Office Building
19 Dongfang East Road

Chaoyang District
Beijing 100600, China

Tel: +86 10 8567 5988

Fax: +86 10 8567 5999

E-mail: nanxing@anjielaw.com

www.anjielaw.com

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