Chinese and U.S. Automakers Settle Intellectual Property Dispute

November 29, 2005

Automakers GM Daewoo and Chery Automotive have settled a contentious intellectual property lawsuit, according to a November 18 Associated Press report (via Forbes) and a similar Xinhua account (in Chinese) dated the same day. GM Daewoo is a Korea-based subsidiary of General Motors Corporation, and Chery is a Chinese domestic automaker. GM Daewoo alleged that an automobile model manufactured by Chery was an exact copy of a GM Daewoo model.

Automakers GM Daewoo and Chery Automotive have settled a contentious intellectual property lawsuit, according to a November 18 Associated Press report (via Forbes) and a similar Xinhua account (in Chinese) dated the same day. GM Daewoo is a Korea-based subsidiary of General Motors Corporation, and Chery is a Chinese domestic automaker. GM Daewoo alleged that an automobile model manufactured by Chery was an exact copy of a GM Daewoo model.

GM Daewoo did not seek a design patent under Chinese law for its model, so it sought legal redress against Chery under the Unfair Competition Law. A May 2005 article in the China Daily quoted Chinese government officials stating that GM Daewoo would have to demonstrate that Chery stole the design in order to prove its claim.

The GM Daewoo lawsuit argued that the Chery "QQ" model had exactly the same design specifications as the GM Daewoo Matiz model sold in South Korea and the identical Spark model sold in China. A General Motors official in China told a reporter for The New Yorker that a mechanic could exchange the doors on the two models, a feat only possible if the models share the same design. According to the May China Daily article, GM Daewoo also claimed that Chery used a GM Spark to pass crash tests required under Chinese law to market the "QQ" model.

The two companies settled a separate dispute over U.S. trademarks in September when Chery, which plans to begin importing cars into the United States in 2007, agreed not to market vehicles in the United States under the name “Chery.” General Motors announced earlier that it would challenge the use of the name because of its similarity to “Chevy,” an established GM trademark.

Additional background on this case can be found in the CECC 2005 Annual Report.