Honda Motor Co, the world's biggest maker of motorcycles, won a court ruling stopping a Chinese company from selling Hongda brand motorbikes, adding to signs China is getting tougher on intellectual property theft.
A Beijing court told Chongqing Lifan Industry Group Co (重慶力帆實業) to pay Honda 1.47 million yuan (US$177,600) in damages and cease sales or exports of Hongda motorcycles, Honda spokesman Masaya Nagai said today. Gao Zhihai, a spokesman at No. 2 Intermediate People's Court of Beijing, said Lifan lost the suit yesterday.
Honda, General Motors Corp and Toyota Motor Corp have all sued Chinese companies, arguing lookalike designs or logos are costing them business in the world's third-largest auto market.
China's Supreme People's Court increased penalties for copying software, movies and other intellectual property this month, responding to pressure from the US and the EU.
"China's government is taking the international trademark and patent issues more seriously and it has to," said Paul Gao, a Shanghai-based principal and automotive analyst at McKinsey & Co, which advises foreign carmakers on investing in China.
Tokyo-based Honda's shares rose 0.8 percent to 5,300 yen and at the close of trade in Tokyo.
Imposing tougher penalties on trademark and copyright pirates may help China head off the threat of WTO actions by the US and EU. The US has said piracy is the biggest problem in the US$181 billion commercial relationship between the two nations.
Toyota last year lost a suit against China Geely Group Co (吉利控股), which it accused of using a logo that looks like the Japanese carmaker's marque. Yamaha Motor Co in 2002 received 900,000 yuan in damages from Tianjin Gangtian Corp and won a court order stopping the company from selling a lookalike scooter.
General Motors' South Korean unit GM Daewoo Auto & Technology Co last week sued Chery Automobile Co (奇瑞汽車), claiming that the Chinese carmaker's QQ minicars used parts and designs from its Matiz minicar without permission. GM Daewoo's spokesman Rob Leggat could not be reached for comment.
Honda's victory "is a sign of the growing maturity of intellectual property rights recognition among China's judges and lawyers," said Guan Anping, managing partner of Anping & Partners, a Beijing-based law firm specializing in intellectual property rights. "The government is strengthening legislation and courts are beginning to enforce laws."
Lifan, based in southwestern China's Chongqing municipality, is the nation's largest privately owned maker of two-wheel vehicles. An official responsible for Lifan's intellectual property rights declined to comment. Lifan's chairman Yin Mingshan couldn't be reached to comment on yesterday's verdict.
Lifan makes 1 million motorcycles and 2 million engines a year, according to its Web site. The company, started with 200,000 yuan of capital 12 years ago, reported a 15 percent increase sales last year to 4.6 billion yuan. The company's latest available income figure was in 2002, when it earned 205 million yuan in pretax profit, according to its Web site.
Honda expects to sell 12.5 million two-wheel vehicles next year, 17 percent more than this year, according to a forecast made last week. Honda owns three motorcycle ventures in the Chinese cities of Chongqing, Guangzhou and Haikou.