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ON THE JUDGMENT ON TRADEMARK INFRINGEMENT CASE PASSED BY THE SUPREME COURT OF THE PEOPLE'S REPUBLIC OF CHINA - UPHOLDING THE 2005 DECISION OF THE JIANGSU HIGHER PEOPLE'S COURT -

June 12, 2007

In October 2002, Yamaha Motor Co., Ltd. (hereinafter "the Company") filed a lawsuit against four Chinese companies, namely Zhejiang Huatian Industry Co., Ltd. (a motorcycle manufacturer; referred to as "Zhejiang Huatian"), Taizhou Jiaji Motorcycle Distribution Co., Ltd. (referred to as "Taizhou Jiaji"), Taizhou Huatian Motorcycle Distribution Co., Ltd. (referred to as "Taizhou Huatian") and a distributor thereof, at Jiangsu Higher People's Court with the cause of action that these companies infringed the Company's right for the registered trademarks "", "YAMAHA" and "FUTURE". On June 5, 2007, the Supreme Court passed the judgment to uphold the decision of the Jiangsu Higher People's Court.

In this case, a company named "Nippon Yamaha Co., Ltd." established and registered in Japan in 2000, entered into a Trademark License Agreement with Zhejiang Huatian, whose business name was Taizhou Huatian Motorcycle Co., Ltd. at that time. Under that agreement, Zhejiang Huatian was licensed to use "Nippon YAMAHA Co., Ltd." and other similar characters on motorcycles it produced in China.

We maintained that this kind of use constituted an infringement on our exclusive right to use the trademarks mentioned above, and decided to file a civil suit in China.

The judgment of the Supreme Court upholds the following decisions of the Jiangsu Higher People's Court that supported in essence all of our claims. Because of two-level judgment system adopted by China, the judgment has become final and binding thereby:

1)

Zhejiang Huatian, Taizhou Jiaji and Taizhou Huatian shall stop infringing the trademark;

2)

The three companies shall publish an apology in ""("Motuoche Shangqing") magazine*;

3)

Zhejiang Huatian shall pay compensation to the amount of RMB8,300,440.43, of which Taizhou Jiaji and Taizhou Huatian are to be jointly and severally liable for RMB8,227,977.03, and RMB72,463.4 in compensation, respectively.
In order to prevent an escalation of such trademark infringement, the Company decided to file this lawsuit to obtain a just judgment.

For this purpose, the following results have been achieved through legal means and our logical analysis:

1)

Confirmation of the amount of damage based on evidence acquired through preservation of evidence

The courts recognized the amount of damages calculated by the Company based on the materials acquired through the preservation of evidence.

2)

Responsibility for not submitting evidence

The court made clear its position regarding the defendant's refusal to properly submit evidence required by the courts.

3)

Joint and several liability

In order for these three group companies to be jointly and severally liable to compensate, it was deemed that the series of procedures from production to distribution are joint acts of all three companies.

Therefore, these three companies shall bear joint and several liability for compensation.

4)

Amount of damages

The judgment was given for compensation to be to the amount of RMB8,300,440.43, the same amount we claimed.

(The Company's comments)

In our opinion, this judgment is a landmark decision. We hope our lawsuit serves as a useful reference somehow to other enterprises confronted with similar trademark infringements. We would like to express our deepest respect to the Jiangsu Higher People's Court for their initial judgment and the Supreme Court of China for upholding the decision at first instance. We will continuously respond to infringement of intellectual property rights in resolute attitude.

* ""("Motuoche Shangqing") is name of a motorcycle industrial magazine published in China.


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