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Analysis of the Strategy against Car Exterior Design Copycat

 

This report draws the example of the car exterior design infringement dispute ( hereinafter referred to as JLR case ) between Jaguar Land Rover ( hereinafter referred to as JLR ) and Jiangling Holdings Ltd. ( hereinafter referred to as Jiangling ) to analyze how to deal with the exterior design infringement in car industry.

1. Analysis of the JLR CASE

1.1 Background

 

Figures: the comparison of the two cars

 December 2010

Evoque, the new car model of JLR was launched in December 2010 and premiered in Auto Guangzhou show.

 November 2014 

Jiangling manufactured Landwind X7 in November 2014 which looks almost the same as Evoque. Landwind X7 premiered domestically in Auto Guangzhou.

 June 2016

JLR sued Jiangling Holding in Beijing Chaoyang District Court, alleging that Landwind X7 copies the design of Range Rover Evoque. 

 March 2019

On March 13, 2019, in the unfair competition case and the copyright infringement case of JLR vs. Jiangling and Beijing Dachang Landwind Trading Co. Ltd. ( hereinafter referred to as Dachang Landwind ) ( hereinafter respectively referred to as unfair competition case and copyright infringement case ), Beijing Chaoyang District court ( hereinafter referred to as Chaoyang Court ) rules in the first instance trial that Landwind X7 manufactured, demonstrated, presold, and sold by Jiangling Holding and demonstrated, presold and sold by Dachang Landwind constitutes unfair competition against Evoque manufactured and sold by JLR, and orders Jiangling and Dachang Landwind to stop the infringement and pay RMB 1,500,000 to JLR in compensation for the economic loss, and overruled the copyright infringement allegation made by JLR against Jiangling and Dachang.

1.2 Case Study

1.2.1 Exterior design patent ZL 2011 3 0436459.3 is invalidated.

Evoque of JLR premiered in the 8th Auto Guangzhou show on December 20, 2010 and was manufactured on July 4, 2011 and launched in China on November 8, 2011. On November 24, 2011, JLR filed for exterior design patent for the exterior design of Evoque, the patent number is 2011304364593.

It is quite clear that JLR demonstrated the car to the public before manufacturing and launching it in Chinese market and filing for the patent. So JLR hasn't filed for the patent until a year after the car was made public. The paten should be invalidated under the Patent Law of PRC, for the reason that the design is made public before and has lost origninality. The patent was, indeed, invalidated because of the reason mentioned.

 

 

1.2.2 Copyright Infringement Dispute

JLR claims that it still is the owner of the copyright of the design of Evoque even though the exterior design patent is invalidated. JLR asserts that Evoque has inherited the classical car features of Land Rover, and more than that, it has its unique features in exterior design. Its original features include tapering roof, floating roof, upward characteristic lines, clamshell hood and the contour of the car body. These five features are for the sake of aesthetics instead of functions, which make the exterior of Evoque original, artistic and aesthetic, in this light, the exterior of Evoque should be protected by the laws of PRC as a work of applied art. And the exterior of the car is a dimensional artistic work of aesthetics represented in certain lines, colours and ratios, so the car is also qualified as a fine art work defined in the Copyright Law of the PRC ( hereinafter referred to as the Copyright Law).

The court holds the opinion that the work of applied art subject to the protection of the Copyright Law in the country shall at least contain the following elements: first, the practicality can be separated from the artistic character; second, the work is original and the originality criterion are at least consistent with those of the fine art work. To sum up, to be qualified as a work of applied art subject to the protection of the Copyright Law in this country, the practical usages, or the practicality of the art work shall be separable from the artistic character, and the work is aesthetic and enjoy a relatively high degree of art achievement.

Based on these views, the court holds that, in the copyright infringement case, the evidence presented is not sufficient to prove that the five original exterior design elements of Evoque are for the sake of functions, the artistic expression of the bodylines, shape and colours of Evoque is separable from the practical functions, thus, the argument that it should not be subject to the protection of the Copyright Law because the practicality is not separable from the artistic characters does not apply here. However, on the other hand, in this case, though the bodylines, colours and the shape of the exterior of Evoque has to some extent embodied the designers' pursuit for aesthetics, in comparison with average car exteriors, these specific expressions are not enough to reach the minimum requirement of originality of the fine art works, the average public would regard it as an industrial product instead of an artistic work. Therefore, as a whole, the exterior of Evoque of JLR does not enjoy the artistic creation level required to be qualified as a fine art work, it does not have originality and is not a fine art work, neither a work of applied art.

Thus, the court rules that, the claim of JLR that the alleged behaviours of Jiangling and Dachang Landwind constitute an infringement against its copyright does not hold, and the court overrules this claim made by JLR.

1.2.3 Unfair Competition Dispute

JLR claims that Evoque has 5 unique decorative design elements, including:

  tapering roof

  floating roof

  upward characteristic lines

  clamshell hood

  contour of the car body

These design elements are part of the general and local exterior structural appearance of the car which have decorative purposes, they are structural decoration of commodities. With the promotion and marketing of JLR, the unique design of Evoque has the function of distinguishing the source of the commodities, and is sufficient to make the relative public to associate the unique decoration with the commodities and services of JLR, thus, these design elements are qualified as the "decoration with certain degree of influence" defined in The Law of the People’s Republic of China against Unfair Competition (hereinafter referred to as the Unfair Competition Law 2017).

JLR asserts that the Landwind X7 launched by Jiangling in 2014 has no substantial difference from Evoque in exterior vision, and contains all of the five unique decorative design elements of Evoque as mentioned above, which makes it easy for the relative public to confuse the two cars, causing massive damage to JLR. The behaviours manufacturing, promoting and selling Landwind X7 of Jiangling and the behaviours promoting, selling and demonstrating Landwind X7 of Dachang Landwind constitute unfair competition behaviour of unauthorized usage of the sings and logos which are same as or similar to JLR’s decoration with certain degree of influence, and above-mentioned behaviours also violate the integrity principle and business ethics they should comply with.  

JLR requests Chaoyang court to order Jiangling to immediately stop the alleged unfair competition behaviours, which include manufacturing, demonstrating, preselling and selling the products called Landwind X7, the products models are JX7200 and JX7200L ( hereinafter referred to as Landwind X7 ); to order Dachang Landwind to immediately stop the alleged unfair competition behaviours, which include demonstrating, preselling and selling Landwind X7; and to order Jiangling and Dachang Landwind to jointly pay to JLR RMB 1,500,000 of compensation for the economic loss and reasonable expenses and remove the impact.

The court takes the view that, after the long-term promotion and usage of JLR, the relative public are able to associate the structural decoration used by Evoque with specific car models of JLR, and the structural decoration has the function of distinguishing the source of the commodities. Therefore, the exterior of Evoque in this case, as the structural decoration, is qualified as the "decoration with certain degree of influence" defined in Article 6.1 of the Unfair Competition Law 2017. In general visual effect, including the five specific design elements of tapering roof, floating roof, clamshell hood, upward characteristic lines, and the contour of the car body, the structural decoration of Landwind X7 of Jiangling resembles that of Evoque, Landwind X7 of Jiangling has used the decoration of Evoque of JLR. The structural decoration used by Jiangling on Landwind X7 is sufficient to make the relative public to confuse Landwind X7 and Evoque and mistake one for another. 

Therefore, the court held that, the alleged behaviors of Jiangling have violated article 6.1 of the Unfair Competition Law 2017, constitute the unfair competition behavior of unauthorized usage of the signs and logos which are same as or similar to the decoration of others' commodities with certain degree of influence, confuse the market and damage the legitimate interests and reputation of JLR. The court orders Jiangling to immediately stop the alleged unfair competition behaviours and supports all the lawsuit claims of JLR.

2. The Protection Strategy of Car Exterior Design

2.1 A solid right ownership is the precondition for IP right protection

IP right can only be protected when you own the right. In the invalidation of the exterior design patent of JLR, JLR filed for the exterior design patent in China and obtained the patent. However, it was invalidated because the patent was filed nearly one year after the design was made public. This makes it extremely difficult for JLR to protect its right. If JLR files for the exterior design patent before making the design public in accordance with the laws and regulations of China, the patent would not be invalidated. If JLR is able to claim its right on the ground of exterior design patent, the right protection lawsuit of JLR would be smoother.

2.2 In practice, to protect the IP right solely on the ground of unfair competition law is relatively risky.

Article 6 of the Unfair Competition Law provides that the operator shall not conduct the following confusing behaviours to make people mistake the commodities as others’ or mislead people to associate the commodities with others:

(1) Use without authorization the signs and logos which are same as or similar to the names, packages, decoration, etc. with certain degree of influence of others’ commodities;

(2) Use without authorization others' company names ( including the abbreviations and other brand names ), the names of the social organizations ( including the abbreviations ), and the names of individuals ( including the pseudonyms, stage names, translated names, etc. ) with certain degree of influence;

(3) Use without authorization the main part of the domain names, the names of the websites, the web pages, etc. of others with certain degree of influence;

(4) Other confusing behaviors that are sufficient to make people mistake the commodities with other’s or mislead people to associate the commodities with others.

The core of this article is "confusing", namely, sufficient to mislead people to mistake one for another or to misjudge that the commodities are associative with the products of the owners of the rights. Though JLR has won the case, considering the preconditions of confusing and misleading, its wining is not universal.

In this case, though the two models resemble closely in exterior design, the price gap is three times, furthermore, the consumers mostly purchase cars in 4S stores, the whole purchase process will not make the consumers misjudge the source of the cars, namely, they would not be made to believe that Landwind X7 is a model manufactured or authorized by JLR. Therefore, though the two models resemble in exterior design, there will be different judgement in real trials as to whether the resemblance leads to “confusing” defined in the Unfair Competition Law.

In this light, to protect the exterior design of the car on the ground of unfair competition law is not enough.

2.3 The Protection Strategy of Car Exterior Design

The exterior of car is a key consideration for the consumers when purchasing a car. Thus, the car manufacturers attach great importance to the exterior design of the cars. During the past years, the popular models’ exterior designs of some manufacturers are imitated and copied, which seriously damage the IP rights and commercial interests of the relative companies.

The most straightforward way to protect the exterior design of the cars is to file for the exterior design patent. The grounds of judgement in exterior design patent infringement are different from those in the unfair competition case, in the former case, same or similar designs are the criterion, and confusing and misleading are not considered. When deciding whether the exterior designs are the same or similar, the court makes comprehensive judgement on the whole visual effects based on the features of the authorized exterior design and the allegedly infringing design. Where there is no difference between the allegedly infringing design and the authorized exterior design in terms of the whole visual effects, the people's court should rule that the two are the same; where there is no substantial difference in terms of the whole visual effects, the court should hold that the two are similar.

The reason behind the difference of the judgement grounds is that the objects protected by the exterior design patent are different from the objects protected by trademarks and well-known commodities unique decoration. The exterior design patent protects "the new design rich in aesthetics and fit for industrial application", and the design itself should be objective. While trademarks and well-known commodities unique decoration protect the goodwill embodied in the products, and are distinctively subjective. This explains why the popularity of the trademarks or commodities to be protected need to be considered when judging whether the unique decorations of the trademarks and well-known commodities are the same or similar. Thus, exterior design patent is more proper when protecting the exterior design of the cars.

The brand can file for the exterior design patent for the whole exterior appearance of the car or for each of the unique design elements. As the exterior design patent has the sole requirement of originality, any new design which hasn't occurred in the car industry is qualified for protection. Furthermore, if the design does not only have decorative purposes, but also have practical functions, the brand can file for utility model patent and even invention patent on top of the exterior design patent. The clamshell hood of Evoque is an example, as promoted by JLR, it has aesthetics and it also functions as the proof against water as traditional hood. Overlapping rights would give better protection to the design.

Noteworthy is that, the patent application should be filed before making the design public, otherwise, the patent would become existing technology because of the fact that it has been made public, and the patent might be invalidated even after being awarded.

In summary, though the case of JLR is not universal, it at least boots the confidence of the car makers in protecting their exterior design, and they now have the lessons to draw on. An effective solution is to protect the exterior design of the car with the exterior design patent, to protect the design elements with practical functions with the utility model patent or invention patent, and to seek supplementary protection on the ground of unfair competition.