Mercedes-Benz is considering ending a suit that claims a Chinese-made car, that is set to go on sale in Europe in mid-January, looks too much like its Smart ForTwo. According to Automotive News Europe, the Shuanghuan Bubble could go on sale later this month as lawyers from Mercedes-Benz and the Chinese car’s Italian importer Martin Motors come close to settling legal actions that have blocked the sale of the minicar.

The battle between Mercedes-Benz and Martin Motors began just before the launch of the IAA in Frankfurt in Sept. 2007. At the time Mercedes-Benz had obtained court orders banning the sale of the Bubble minicar in Germany claiming the car infringed its copyright for the Smart ForTwo. A month later, Martin Motors launched a counter-suit against Mercedes-Benz seeking damages of more than  €100 million ($135 million USD) as compensation for lost Bubble sales.

But now, Mercedes-Benz fears that it could lose the case in Court and could be forced to pay damages. Just last month, a court in Milan rejected BMW’s claim that the Shuanghuan CEO, which is also distributed by Martin Motors, is a clone of the BMW X5. Sources say that the ruling against BMW has pushed Mercedes-Benz lawyers to be a little more careful.

Currently, German customs is holding one unit of the Bubble that was confiscated before its Frankfurt Motor Show debut in 2007. Italian authorities are holding up six Bubbles, one of which was supposed to be shown at the Bologna Motor Show.