New victory for New Balance
China is known as a country where it’s been very difficult or even impossible at all for foreign companies to protect their intellectual properties. Trademarks are handed out on a “first come, first served” basis and in the early ’90s it was common to register foreign company names with the intent of using the trademarks to negotiate settlement offers or file lawsuits when foreign companies entered the Chinese market.
Shoe and sportswear manufacturer New Balance has had an aggressive approach to trademark infringement in China, wanting to set an example that it is not settling infringement cases without a legal battle.
A Chinese businessman, Zhou Lelun, applied for the translated Chinese version of New Balance, Xin Bai Lun, in 2004. New Balance filed an opposition, but it was rejected by the Chinese Trademark Office (CTMO) and Zhou’s trademark was accepted in 2008. In 2013, Zhou sued New Balance for infringement and the court ruled in his favour with $15.8 million in damages. New Balance followed with an appeal and even though the higher court upheld the ruling, it decreased the damages to $750,000.
New Balance’s stubbornness has finally given results, as it recently won a great victory, one that is important not only to New Balance but to all foreign companies in China. Three domestic shoe manufacturers, New Boom, New Barlun and New Bunren, were found guilty of infringement of New Balance’s “N” logo. The damages and legal costs summed up to $1.5 million, which is considered to be the largest trademark award ever granted to a foreign business in China.
Three days prior the ruling, Donald Trump ordered the United States Trade Representative (USTR) to launch an investigation on China’s intellectual property practices, which may be harming American intellectual property rights. USTR has one year to investigate and determine if actions are necessary. Given the outcome of the investigation, the case can mark the start of a “war on China’s intellectual property theft”, as Trump himself phrased it.
Do you want to know more about protecting intellectual properties in China? Maybe your company is already operating there, or is about to launch. Regardless what kind of help you require, Otmore’s experts have extensive experience dealing with intellectual property rights all over the world.
As a part of our proactive approach, we offer a free trademark analysis with every registration before filing it, to highlight any potential risks and obstacles. Once a trademark application has been accepted, we recommend that you use our in-house developed watch service. It’s a software that monitors applications for identical or even similar trademarks, to prevent unauthorized use of your assets. Contact us and we are happy to tell you more about our services!