Caixin
Jun 21, 2019 07:37 PM
BUSINESS & TECH

Honda and Chinese Rival Go Bumper to Bumper in Court

A Great Wall factory in Tianjin on Feb. 8, 2017. Photo: VCG
A Great Wall factory in Tianjin on Feb. 8, 2017. Photo: VCG

Honda Motor Co. Ltd. met with Great Wall Motor Co. Ltd. for another round of legal wrangling in a Beijing court yesterday as the Japanese carmaker seeks around 22.14 million yuan ($3.2 million) in compensation from China’s top SUV-seller for alleged patent infringement.

Honda claims that Great Wall uses two of its patented innovations, a rear door design and decorative structure, in its Haval H6 model. It asked the Beijing Intellectual Property Court to order Great Wall to stop manufacturing and selling the car immediately.

Launched in 2015, the Haval H6 is Great Wall’s top selling model, with the company shifting 450,000 units last year. Yet Honda says the car incorporates patents that it registered back in 2007. It launched legal action in 2017, calculating that, based on the 1.45 million Haval H6 units sold in total at that time, it was owed 200 million yuan in compensation. Yet the company has reduced its ambitions, and is now looking to recoup around a tenth of that amount.

While no decision was reached this week, both sides said they would be willing to settle the case through out-of-court arbitration.

Honda was previously on the losing end in a similar case in China in 2004, when a court rejected its copyright suit against local company Shijiazhuang Shuanghuan Automobile Co. Ltd. In that instance, Honda sought 12.5 million yuan due to alleged trademark infringement.

Yet this time around Honda is likely to have been buoyed by British carmaker Jaguar Land Rover PLC’s victory in a patent infringement case against Jiangling Motors Corp. Ltd. in March this year, in what Jaguar hailed as a “first” for international car manufacturers in China’s courts. Jaguar claimed that Jiangling copied its Evoque with its Landwind X7 model, which it sold for around a third of the price at 375,800 yuan.

China’s auto industry continues to drive through a rough patch, with sales having plunged in the last 11 months in part thanks to the wider economic slowdown. Sales of relatively cheap, domestically-made SUVs have particularly struggled during the slowdown.

Contact reporter David Kirton (david.kirton@caixin.com)

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