After being frozen for 76 million yuan, Weimar was claimed by Geely for 7 million yuan due to commercial theft

Text｜Chen Yixun

Editor｜Sun Chunfang

The first trial of Geely suing Weimar for infringement of trade secrets has the latest progress.

A few days ago, a number of media reported that the Shanghai Higher People’s Court had made a first-instance judgment on the intellectual property dispute between Zhejiang Geely Holding Group Co., Ltd. (hereinafter referred to as Geely Holding) and WM Motor. According to the verdict, Weimar needs to compensate Geely 7 million yuan, including 5 million yuan in economic losses and 2 million yuan in various expenses to stop the infringement. Weimar needs to stop using 5 auto parts drawings on the EX5 model.

After the first instance, the court determined that the relevant information on the five auto parts drawings on the EX5 model belonged to Geely Automobile, so Weimar must stop using it. It is understood that the drawings of these five parts are the front stabilizer bar assembly, the mounting bracket of the rear axle assembly, the left lower swing arm of the front suspension, the left sleeve of the front stabilizer bar, and the rear axle assembly, all of which are automotive chassis parts.

In this regard, Weimar responded that it is still the first-instance judgment, Weimar has appealed, and the suspension of drawings has no substantial impact on the company.

The intellectual property dispute between Geely and Weimar originated in 2018, when Geely Holdings brought Weimar to court on the grounds of “infringement of trade secrets”, demanding Weimar to pay 2.1 billion yuan in compensation and bear related litigation costs. This was the litigation case with the highest claim amount in the domestic automobile industry intellectual property dispute case at that time. In September 2019, the case opened for the first time. At that time, WM Motor declared to the outside world that WM Motor had no infringement and was confident of winning the lawsuit.

Public information shows that there are many connections between Geely and Weimar. Since 2016, Chengdu Gaoyuan Automobile Industry Co., Ltd. (hereinafter referred to as Gaoyuan Automobile), a subsidiary of Geely, has many resigned employees who have joined Weimar, and some of them have also held executive positions in Weimar. In the internal mail system of Gaoyuan Automobile, some of the above-mentioned drawing information appeared in the mail of some former employees, which means that Weimar has the conditions to have access to Geely’s business secrets.

In addition, many core members of Weimar’s founding team are from Geely. Shen Hui, the founder of Weimar, was the vice president of Geely Holding Group and the person in charge of Geely’s acquisition of Volvo, and its co-founders Hou Haijing, Du Ligang, Lu Bin and others are also related to Geely. Hou Haijing was the vice president of Geely Holding Group , After joining Weimar, he was responsible for the research and development of its platform. Du Ligang was a member of Geely’s acquisition of Volvo negotiating team.

According to the prospectus of WM Motor, in the annual consolidated financial statements at the end of 2021, WM set aside a budget of 61.2 million yuan, which is mainly used to deal with trade secrets and intellectual property disputes, and to complete the investigation of disputes involving disputes from the end of 2022 to the middle of 2023. Replacement or elimination of technical solutions or patents.

It is worth noting that just a few days before the first-instance judgment, Weimar just got a state-owned investment, which temporarily relieved the urgent need of lack of funds.

Tianyan Check shows that on December 20, Weima Automobile Technology (Sichuan) Co., Ltd. underwent a number of industrial and commercial changes, and its registered capital increased from 170 million yuan to 520 million yuan. The new shareholder is Mianyang Anzhou Investment Holding Group Co., Ltd. (hereinafter referred to as Antou Holdings), Antou Holdings is an enterprise jointly held by local state-owned enterprises in Mianyang City and the Sichuan Provincial Department of Finance. After Antou Holdings increased its capital, its shareholding ratio reached 67.31%, becoming the largest shareholder of WM Sichuan Company. At the same time, the legal representative of Weima Sichuan Company was changed from Shen Hui to He Wei.

The state-owned shares will undoubtedly give Weimar a helping hand, but a document published by the court immediately made Weimar’s situation turn for the worse.

According to the information from Tianyancha, Anji Zhixing Logistics Co., Ltd., WM New Energy Automobile Sales (Shanghai) Co., Ltd., and WM Automobile Technology Group Co., Ltd. have made public the non-litigation preservation review ruling. The document shows that the applicant Anji Zhixing Logistics Co., Ltd. requested the court to seal up and freeze the property worth 76.52 million yuan of the respondent Weima two companies. The court held that the application of Anji Zhixing Logistics Co., Ltd. complied with the law and ruled to implement it.

Weimar, which has been deeply involved in huge compensation and asset freezes, is not optimistic about its current financial situation. The prospectus shows that Weimar’s losses continued to increase between 2019 and 2021, of which the loss in 2021 reached 8.2 billion yuan. In order to alleviate the financial pressure, Weimar adopted plans such as salary reduction and cost reduction. On November 21, Shen Hui sent an internal letter to all employees, requesting to reduce operating costs through salary reduction. Among them, senior employees (M4 and above) will receive a 50% salary cut, and other employees will receive 70% of their basic salary.

The industry believes that, combined with Weimar’s financial situation and salary cut information, it is still unknown whether Weimar’s cash flow can support its listing. Previously, there was news in the market that Weimar planned to achieve a backdoor listing through Apollo travel. However, this news has not been confirmed by Weimar. Whether Shen Hui and his WM Motor can survive the cold winter and usher in a turning point is still unknown.