When Jaguar Land Rover Limited (“JLR”) introduced its high-end Range Rover Evoque sports utility vehicle in 2010, the vehicle’s eye-catching design received rave reviews and design awards from the global automotive press. The vehicle’s introduction in China in December of that year was met with similar praise from the Chinese media. Following JLR’s acclaim, however, a Chinese manufacturer, Jiangling Holdings Co., Ltd., introduced a low-cost, copy version of the Evoque vehicle. Jiangling’s vehicle, named “Land Wind X7,” reproduced many of the distinctive design features of JLR’s popular SUV.
Despite challenges it would face taking on a domestic manufacturer in China, JLR decided to bring a complaint against Jiangling Holdings under Article 6.1 of the China 2017 Anti-Unfair Competition Law (“2017 AUCL”). That law places a high burden on a plaintiff seeking to protect its product’s trade dress. Among other things, a plaintiff must prove the overall body design of the vehicle is distinctive, the defendant is using the same or a similar design, and the defendant’s use creates a likelihood of consumer confusion.
The Chinese manufacturer’s copy of the Evoque SUV forced JLR to take its action to enforce its rights under China’s intellectual property laws. On this difficult decision, Amanda Beaton, JLR’s Global IP Counsel, stated, “Jaguar Land Rover takes the protection of its intellectual property very seriously. We invest significantly in the design and engineering of our products together with our brand and did not feel that this action by Jiangling could go unchallenged. This was necessary in order to protect our customers who have already purchased our products and the public as a whole.”
On March 13, 2019, following a trial on the merits, the Beijing Chaoyang District Court decided in favor of JLR on its unfair competition claim. Jaguar Land Rover Limited v. Jiangling Holdings Co., Ltd. and Beijing Dachang Landwind Automobile Sales, Ltd., Case No. (2016) 10383 BJ 0105 Civ. Tri. (March 13, 2019). This is the first case where a Chinese court has enforced Intellectual Property Laws against a domestic automotive manufacturer in an action brought by a Western automobile company. The court found that JLR had proved its claims under Article 6.1 with respect to five unique design elements in the Evoque SUV, elements that were essentially duplicated in the Land Wind X7copy. Ms. Beaton stated, “We are of course pleased with the judgment of the Beijing Chaoyang District Court. The Chinese court has sent a clear message that unfair competition will not be tolerated. This decision further strengthens our confidence in investing in China and will encourage other businesses like us, to continue investing in this very important market.”
JLR’s evidence established the striking similarity between the two vehicles, which appear to be almost exact duplicates. In finding that Jiangling’s accused conduct violated the 2017 AUCL, the court applied the law retroactively. Under the 2017 AUCL, the plaintiff had to establish several key issues, including:
- Whether JLR had standing to sue and whether JLR abused its right to sue;
- Whether the Evoque’s appearance was a “decoration of certain degree of influence” and whether Jiangling Holdings’ accused activities constituted unfair competition; and
- The extent of Jiangling’s liabilities should the court find unfair competition.
The court rejected the defendant’s lack of standing argument, which was based on the Chinese property law principle of “One right for one property,” disagreeing that JLR trade dress claim was barred because JLR had also asserted patent rights in the Evoque design. The court noted that “appearance of a car can enjoy multiple intellectual property rights (trade dress, design patent, etc.) when different requirements are met. These rights have different scope of protection, different legal interest, and different conditions, etc. A plaintiff can surely file more than one lawsuit with different claims.”
The court’s comparison of the two vehicles found the Land Wind X7 copy was “essentially identical” to JLR’s Evoque model. The court agreed with JLR that five design features had been duplicated in the accused vehicle: the sloping car roof, the floating car roof, rising feature lines, a clam-shell shaped engine bonnet, and the contour of the entire vehicle. It determined that each design element was distinctive and that JLR had established that each design element had acquired a “decoration of certain degree of influence” among consumers based on extensive advertising and media coverage of the Evoque in the Chinese market. The court rejected Jiangling Holdings’ argument that the design features identified by JLR were functional and, therefore, unprotectable; rather, the court noted, some of the design elements, in fact, interfered with the vehicle’s functionality and had to be overcome.
Notably, the district court awarded the broad relief JLR had requested, including a permanent injunction against the manufacture, display, and sale of the infringing vehicle. The court also ordered the defendant to pay compensation and costs to JLR. Finally, the court ordered Jiangling Holdings to post a public statement on its website and in the media to mitigate the confusion that had resulted from its marketing of the Land Wind X7 knockoff vehicle.
The court’s decision is exciting news not only for JLR, but also for other companies seeking to enforce their intellectual property rights in China. Keith Benjamin, JLR’s Global Head of Legal, noted that the company welcomed the decision, stating, “This ruling is a clear sign of the law being implemented appropriately to protect customers and uphold the rights so that they are not confused or misled, whilst protecting business investment in design and innovation.”
Not surprisingly, Jiangling Holdings has since filed an appeal. Brand owners and customers worldwide are surely optimistic the China Courts will continue to enforce its intellectual property and Anti-Unfair Competition Law.