Since joining the World Trade Organisation in 2001, China has been trying to strengthen its trade mark laws. China has been making its laws stricter to respond to widespread trade mark infringement in China. Chinese companies who violate trademark laws are charged with a maximum statutory amount of $75,000. This value was before China passed a new trademark law in 2014. Currently, there is new legislation that increased the amount to $450,000.
New Balance’s Trademark Infringement Case
New Balance shoes have been sold in the Chinese market since 1995. Continuously, the sales of sports equipment has boomed in the Chinese market. As sales increased, several domestic companies started producing their own sports products that arguably copied foreign companies.
Recently, three domestic companies violated trade mark laws by copying New Balance’s trade mark slanted ‘N’ logo. Specifically, New Boom, New Bunren and New Barlun were charged with $1.5 million, which is almost 10 million Yuan in legal costs and damages. This is the biggest sum ever awarded to a foreign company in China. This court ruling was issued three days after President Trump requested an investigation of theft of intellectual property in China.
Effects of New Balance’s Trademark Infringement
New Balance’s incredible victory is a good sign for other foreign brands that have complained that the Chinese government has not done much in protecting their brands. According to Carol Whang, a lawyer who represented New Balance, the trademark infringement case conveyed a strong impression to foreign brands that are selling their products in China. Without a lawsuit being filed, the three domestic companies would just continue to produce fake products that violate trade mark laws.
Similar to the case of New Balance, Michael Jordan won a trademark case in 2016 against a Chinese sportswear company for using his name in Mandarin without his consent. With intellectual property laws in China becoming stricter and new strategies being developed to ensure that domestic companies do not violates trade mark law, foreign trade mark owning companies have more confidence that infringement of their brands can besuccessfully successfully challenged in Chinese Courts.
New Intellectual Property Protection Strategies
Paolo Beconcini, the senior global brand protection consultant at Squire Patton Boggs, stated that current legislative reforms have considerably enhanced brand protection in China. Beconcini has worked on Chinese intellectual property cases for 15 years of his legal career. He stated that the changes in brand protection include new punitive damages for repeat infringers, four specialised intellectual property courts and a higher threshold for statutory damages.
What happens now to New Balance in China?
The outcome of New Balance’s case has made the Chinese government revisit their laws and strategies for intellectual property. Daniel McKinnon, New Balance’s senior counsel for intellectual property, stated that New Balance has confidence in their strategies on intellectual-property protection in China.
The company is to become stricter with domestic companies that sell similar sports products in China. With new trade mark laws being strengthened, it is highly possible that other foreign companies that sell their products in China will reinforce their intellectual property rights with the help of the Chinese government.
About Pinnacle TMS
Suzanne Harrington, an Australian trade mark specialist, is the proud owner of Pinnacle TMS. We are a boutique trade mark services company that has over twenty years of experience in brand protection by trade mark registration, both in Australia and overseas. If you need help with trade mark registration and trademark portfolio management, call +61 2 9520 4366 or send them a message on our website contact page.