China Automobile Exporting Businesses Must Pass IP Test

September 22, 2003

China Automobile Exporting Businesses Must Pass IP TestIn the past two years, domestic automobile manufactures have focused their attention on the overseas market with visions of exporting their automobile products to foreign countries. With the continued advancement of industry in China, the entrance of China into the automobile industry has foreign competitors worried. Foreign media has released articles explaining the challenges that foreign domestic automobile industries will have to face as the Chinese automobile industry continues to expand. However, if the Chinese automobile industry desires to live up to its hype and enter the international market successfully, it must first pass the IP (intellectual property) test.

Many core technologies utilized in Chinese automobiles have been originally derived from foreign companies. Currently in China, there are only a few brand name automobiles that are completely made by domestic manufactures. The excessive reliance of the Chinese on foreign technologies and brand name recognition could possibly lead to a variety of dilemmas concerning intellectual property rights. At present, the automobile manufactures in the international market have not used IP as a weapon against the Chinese domestic manufactures. However, in the long run, it remains to be seen if the issue of IP rights will become a problem for Chinese manufactures.

Currently, a few Chinese domestic automobile manufactures are facing lawsuits concerning intellectual property rights. These cases include the Japanese Toyota Company vs. Jili Automobile Company lawsuit for trademark infringement and the GM investigation of Cherry Automobile for design infringement. As the above mentioned Chinese companies are realizing, as they enter the foreign markets their products are subject to much more scrutiny and IP rights become a more pertinent issue. Therefore, if China is not able to control IP issues with its developing industries it will find itself facing many problems in the future.