New Balance Chinese trade mark win – kicking a goal for damages in China

A Chinese court recently ruled three local shoemakers have infringed the New Balance ‘NB’ logo and must pay US $1.5 million in damages and legal costs. The case is significant as it is reportedly the largest amount awarded to a foreign business in a Chinese trade mark dispute. The infringing shoemakers manufactured shoes under a brand called ‘New Boom’ and were found by the court to have damaged the reputation of New Balance and confused consumers due to the high similarity of their logos to the New Balance ‘NB’ logo and brand.

Critics have often maintained China’s intellectual property system does not sufficiently protect foreign brands; however this recent decision is certainly a step in the right direction.

Under the Chinese system, the first party to file for a trade mark is awarded protection. In Australia, on the other hand, the first party to use the trade mark is awarded protection (unless there is no prior use, in which case registration is awarded on a first come first served basis). The way the Chinese system operates means it is vital brands register the trade mark in China as soon as possible, before expanding into the Chinese market. Otherwise, the brand may find the trade mark has already been registered to a trade mark squatter, or to a party producing imitation goods.

In recent months, the Chinese Government has vowed to tackle the issue of intellectual property infringement caused by the legions of fake goods produced and offered for sale in the country. There have also been changes to Chinese trade mark law over the past few years to take on trade mark abuse. This decision indicates steps are being made to support foreign rights holders. It also provides reassurance for foreign brands looking to expand into the Chinese market and pursue an active brand protection strategy.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.