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Japanese auto giant Toyota's lawsuit accusing a Chinese company of logo infringement was rejected Monday by the Beijing No. 2 Intermediate People's Court, which said their "logos won't cause confusion."

The Japanese auto maker sued Chinese car manufacturer Geely and its car sales center in Beijing for trademark infringement and illicit competition and asked the defendants for 13.92 million yuan (about 1.7 million US dollars) in compensation.

"Geely Group's Merry logo is vastly different from Toyota's registered trademark according to the isolated observation," said Shao Mingyan, the court's presiding judge.

Shao said the major lines and the body structure of the two logos were "obviously" different and would not cause confusion and misunderstanding among buyers.

It is the first-ever lawsuit involving a foreign auto manufacturer in China since the country joined the World Trade Organization.

Before the court's first judgment, a hearing was held in Beijing in August this year but failed to reach any verdict.

Lawyers representing Toyota said the logo of Zhejiang-based Geely Group's Merry was very similar to the Toyota logo and would mislead consumers, thus constituting infringement of its well- known trademark.

The accused Geely Group defended their stand, saying their Merry logo was dissimilar from Toyota's trademark and Toyota's accusation lacked factual evidence.

Toyota registered its logo in 1990 and the registration is effective until 2010, according to sources with the Japanese company.

Geely registered its joint Merry trademark with Chinese characters and logo with the State Trademark Administration in 1996, but registration of the independent logo has not been authorized since Geely applied in 2001.

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