Combatting copycat Chinese car makers

Intellectual Property (IP) Law firm, EIP, provides some insight into how Chinese car makers can apparently get away with copying European car models and what designers, engineers and manufacturers can do to protect their IP.

The Shanghai motor show often sees Chinese car manufacturers launch models which, some say, bare striking resemblances to those of mainstream European brands. In 2015, a notable example was the Suzhou Eagle Carrie, which appeared to be a bizarre amalgam of Ferrari and Porsche. The car was branded ‘Pastiche’ and its emblem had a strong resemblance to Porsche’s.

It is important to be mindful that the burden is wholly on the owner of IP to enforce their rights against infringers. Neither governments nor police forces are going to use their position to stop IP infringers, so an IP rights holder will need to use their own means to enforce their rights, which may result in court proceedings if the alleged infringer fails to comply as deemed appropriate.

When considering automobiles, design right is the most relevant facet of IP. In China, registered designs protected under the patent system provide protection for 10 years from the date on which the application was filed. It is possible to obtain Chinese design patents for cars and automobile designs generally, but the design must be sufficiently distinctive from other designs in order to be valid.

It is key to note that IP rights are strictly jurisdictional, which means that if you hold IP rights in the UK or US for example, that does not mean that they are held worldwide. It is certainly the case that the enforcement of IP rights can be difficult in respect of copying in China, but European manufacturers could request injunctions to stop Chinese manufacturers from exporting their cars outside of China.

Companies based in EU nation states may also be able to rely on their registered and unregistered rights in the EU to prevent Chinese manufacturers selling or importing into Europe. If successful, they can also expect to receive damages if an infringement is legally proven.

Matthew Jones, partner, EIP, says: “If European car makers and the automotive supply chain fail to consider their IP strategy and operate without robust IP protection in place, they risk leaving themselves exposed to all competitors, not just the Chinese, to gain a competitive advantage. It is essential for companies to assess what IP has been created, who owns it, and what should be protected and where. Here, a specialist IP attorney can help put these building blocks in place.

“Moreover, whilst foreign companies have historically been reluctant to apply for Chinese design patents, non-Chinese companies have in the past successfully applied for Chinese design patents for automobile designs and later successfully sued Chinese companies for infringement, obtaining millions of dollars in damages.”