Analysis over the Patented Design Dispute between FIAT and GWM in China

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Case summary:

On June 30, 2003, the Plaintiff FIAT AUTO S.P.A (“FIAT”) applied for a design patent named “automobile” with the State Intellectual Property Organization (the “SIPO”). That application was approved on May 19, 2004 with patent number ZL03353217.6 (the “Patent”).

In November 2006 and April 2007, Great Wall Motor Company Limited (GWM) exhibited its vehicle, the “GreatWall Jingling” in the Beijing Auto Show and Shanghai Auto Show. FIAT alleged that the vehicle exhibited by GWM infringed upon its patented design, and subsequently filed a lawsuit in the Shijiazhuang Intermediate People’s Court, demanding an apology and compensation.

I. The First Instance

In the first instance, FIAT submitted an investigative report made by the Yaxu (Shanghai) Market Research and Consulting Co., Ltd. The inquiry was conducted by asking members of the public in places like supermarkets and sports centers in Beijing, Shanghai and two other cities to compare a photo of GreatWall’s allegedly infringing automobile with that of FIAT’s. The investigative report concluded that the public was misled by the similarities between the products, and that a high likelihood of consumer confusion was present.

Following the court’s decision in the first instance, although the Shijiazhuang Intermediate Court ruled that FIAT’s patent shall be protected by the law, it also determined that GWM had not infringed FIAT’s design patent for the following reasons:

1) According to the Patent Law:

“The extent of protection of the patent right for design shall be determined by the product incorporating the patented design as shown in drawings or photographs.”

For this reason, the rights of the design patent shall be mainly found in the main view, left view, right view and rear view of the applied pictures or photos.

2) In comparison, the pictures submitted by FIAT were different than the GWM’s vehicles, including those showing the main view, left view, right view and rear view; furthermore, such differences were adequate to prevent misleading or confusion among relevant consumers between the automobiles involved.

II. The Second Instance

Dissatisfied with the court in the second instance, FIAT appealed to the Hebei High People’s Court, emphasizing that “for a 3 dimensional design, its features should be considered in regard to the overall look of the patented article rather than one part or several parts of it.”

As heard in the second instance, the Hebei High Court affirmed the judgment made in the first instance, and further concluded that “the focus of the conflict in the dispute shall be the similarity between the products, and the preconditions to adjudicate the problem is to determine methods of comparison and the subjects which shall be considered in making that comparison. ”

With regard to the “methods of comparison” and the “subjects of comparison”, as noted by Hebei High Court, comparisons of design can only be made between the documents available in the patent of the allegedly infringing article. Therefore, in this case, there was no room or time available for FIAT to make the comparison as they determined it should be. In addition, the relevant subjects (here, the consumers) should be those who intend to purchase a car, and not just the general public. Based on these grounds, the court in the second instance refused FIAT’s appeal, and maintained the decision made by the court in the first instance.

Lawyer’s Comments:

The opinions of the judges in the Shijiazhuang Intermediate Court and Hebei High Court concerning methods of design comparison and the key elements of that comparison can be summed up as follows:

1) In comparing the design patents of the two vehicles involved, a decision should be made based on the information located within the patent itself. Unlike the legal requirements of inventiveness and utility, a patent application and review of a design does not concern the “claims,” and under that situation, a picture showing differing views of the patent is among the most important of those documents, and is typically the only basis upon which one may accurately determine the appearance of the patented product. In establishing such a precondition as the court did here, the court will then proceed to conduct a comparison of the pictures and the actual article. This method avoids a situation such as this one, where FIAT produced edited photos in making its case.

2) A comparison of appearances should be sufficiently detailed; each view of the allegedly infringing product and the patented product should be examined, rather than simply a three-dimensional view. In the first and second instance, the judges determined that the fog lights, grating, luggage racks, side-views, rear lights, beamers, and spoilers showed differences. This determination was made based on a comparison of all these views from different aspects. In fact, in all reality the case had already been decided when the court elected to determine similarity from the overall appearance of the two products rather than smaller, minute details.

3) The group which should be making the comparison should be from the point of view of the average purchaser rather than simply the average consumer. This principle is already clearly noted in the Guidelines on Patent Examination. Regarding one form of patent, the basic function of a design is to distinguish the product basing on its creativity. It’s true, in judging the problem from this aspect it functions more similarly to that of a trademark. Taking into consideration the more professional capacity of a relevant purchaser to distinguish the relevant articles here, and remembering that the relevant consumer in this instance is a future purchaser of a vehicle rather than the average consumer, whether confusion is likely shall rightfully be determined by them.

But what is more interesting is, when this dispute was heard by an Italian court, the judges arrived at a completely different decision. While the Hebei High Court ruled that no infringement had been made, the court in Turin, Italy determined that GWM’s vehicle had infringed FIAT’s design patent applied for in the EU, because the court believed “they look almost completely the same”. Surprisingly, this decision was made despite an expert committee confirming no likeliness existed between the products. To have the same dispute result in completely contradictory rulings is evidence of the importance of venue in deciding where and when to bring a challenge to an allegedly infringing patent. In this case, we believe if FIAT had chosen Shanghai or Beijing to bring its case, where large automobile markets exist, rather than in the city where GWM is headquartered, it may have gained a more favorable decision from the court in its design patent dispute with GWM.

Lawyer Contacts

You Yunting86-21-52134918

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You may click here for the simplified version of this post, if you feel the current one is too long to read.

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