Grow Up in Struggle--Reflecting the Toyota Assassin Geely Case


The case of Toyota’s v. Geely, known as the “First Case of the Intellectual Property Right after the WTO Accession to the WTO” finally came to a preliminary conclusion: Beijing No. 2 Intermediate Court dismissed every claim filed by Toyota Auto Co., Ltd., and Geely and its distributors. The business school won the victory. Although Toyota is unlikely to repeat the case even if it appeals, he gave us a wake-up call: The multinational company's sword has just been lifted.

When you sing me out, the Toyota v. Geely case has not yet been settled, and Honda again sued Chongqing Lifan in the same place, but this time the target entity was changed to a motorcycle. It can be predicted that there will be more multinational companies from Japan or other countries and Chinese national enterprises on intellectual property rights.

In fact, the Japan Trade Promotion Association has specially organized a team to entrust Japanese-invested survey companies to conduct secret investigations for Chinese companies that infringe the intellectual property rights of Japanese large companies for several years. They have a lot of materials and evidence in their hands. However, it is not a matter of not reporting, but when it comes to the issue—they are considering the most appropriate timing for the consideration of the Chinese market and the legal environment, with a view to creating an enemy strategy. By then, we will hurry to deal with it and it will be too late.

So are you ready for our national enterprise?

Some people say that the real purpose of Toyota in this lawsuit is to hype, in order to increase its popularity in a wider range, and to clarify the "dual relationship" between Geely and Geely. Before reliable evidence is confirmed, we would rather consider it as wishful thinking. Looking at the history of Toyota's development, we can understand Toyota's emphasis on intellectual property.

Toyota Motor was born as a result of the transfer of a patent. Company founder Toyota Sakichi applied for 126 patents, founded 5 companies, 4 failed, and only 1 Toyota Loom. However, the loom was patented all over the world. Toyota spent five years transferring a £100,000 (equivalent to the current 10 billion yen) transfer fee to a British company. With this capital, Toyota Suji's son established the Automotive Department. In 1936, Toyota Motor Corporation was born after independence.

Toyota's R&D expenditure is 300 billion yen per year, and the annual patent management fee is 4 billion yen. Each year, the company rationalizes 600,000 proposals and adopts 99%. At the highest, 8,000 patents are issued every year. The number of patent applications in China is 80 in a year, and it is expected to double in the future. Toyota's emphasis is on "car first, intellectual property rights. It is also the first." Therefore, they also attach great importance to prosecuting intellectual property cases overseas.

Therefore, if we think that Toyota is using it for hype or other purposes, and is taking lightly to deal with the most important thing in the intellectual property case itself, it will eventually swallow the consequences.

Before joining the WTO, many people exclaimed that China's auto industry is very fragile, needs protection, and cannot be let go. Once it is released, the auto industry is likely to suffer a devastating blow. A few years after its accession to the WTO, our automotive industry has experienced rapid development. Especially in the past two years, the blowout of the automotive industry has encouraged more people to thoroughly deny the previous argument. However, while we are seeing great developments in the automotive industry, we should also be aware of the concerns of the Chinese automotive industry. Behind the mass production in a short period of time is the assembly of CKD with low localization rate. The substantial increase in profits is a sacrifice to R&D investment. In the midst of a boom, it is our lack of core technology or even process technology.

Of course, there is one of the most important, joint ventures or wholly-owned enterprises that play a leading role in the prosperity of China's auto industry. Our national auto companies are still few, and their survival is not easy. In the early stages of their development, due to two major natural and financial deficiencies, the use of low-cost strategies and imitation learning methods is pragmatic. In fact, countries such as Japan and South Korea have adopted such an approach in the early stages of developing the automotive industry. Of course, at the beginning of their development, they were also beaten by European and American countries and other countries with the “Intellectual Property Sticks”. However, we are now in an even more dangerous environment, with more perfect intellectual property laws and more international penetration and cooperation by multinational companies. Apart from Europe and the United States, we also have Japan and South Korea.

However, excellent fighters have always grown in the struggle. Only when we fully understand the importance of intellectual property rights and actively guard against it in the short term to prepare for a “cross-border case” and long-term R&D, with our own core technologies, can we survive and grow in the struggle.

Just as Geely won the case, Mr. Li Shufu, chairman of Geely Holding Group, said that the success of Geely’s lawsuit is only a small step in the development process. The long-term journey of the national automobile industry requires thousands of Geely companies to continue to struggle. However, it has strengthened the confidence of the national auto industry represented by Geely in its own intellectual property development. Only by mastering core technologies in their own hands can they form a true core competitiveness.

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