China: New Balance Prevailed In A First-Instance Judgment In China With A Damage Of Rmb 10 Million

On 15 August, 2017, Jiangsu Province Suzhou Intermediate People's Court (hereinafter called "Suzhou Intermediate Court") issued a first-instance judgment on the widely concerned "New Balance" trademark dispute.

Suzhou Intermediate Court held: NEW BALANCE ATHLETICS, INC. is one of the world's leading manufacturers in sports shoes. Through many years of development, New Balance branded sports shoes have obtained a very high reputation in the world, winning honors such as "King of Jogging Shoes" and "President Jogging Shoes". In China, NEW BALANCE ATHLETICS, INC. owns such registered trademarks as " " and "NEW BALANCE". Despite having many styles, New Balance sports shoes all share a common signature design, i.e. a capitalized letter "N" being highlighted on both sides of each shoe as logo decoration. The signature design belongs to a specific decoration for renowned merchandises, and is protected under the Anti-Unfair Competition Law of the People's Republic of China. NEW BALANCE ATHLETICS, INC. have authorized New Balance Trade (China) Co., Ltd. (hereinafter called "New Balance China") to non-exclusively use in China the registered trademarks including " " and "NEW BALANCE", amongst others, and the above particular decoration, and have authorized New Balance China to file a lawsuit solely or jointly with NEW BALANCE ATHLETICS, INC. against relevant infringements.

Suzhou Intermediate Court held: Shenzhen Xin Ping Heng Sporting Goods Co., Ltd. (hereinafter called "Xin Ping Heng") and Mr. Zheng Chaozhong, amongst others, without licenses from NEW BALANCE ATHLETICS, INC., have manufactured and sold in China a large quantity of sports shoes (hereinafter called "alleged infringing products") with trademarks similar to the registered trademark " ", constituting infringement of the trademark " ". Moreover, the defendant Xin Ping Heng published many articles related to New Balance on its own website. When the words "New Balance" in the articles are clicked, web pages promoting the alleged infringing products will be directly linked to, causing the public to be confused about and misunderstand sources of the merchandises. Such behavior of the defendant constitutes infringement of the trademark "NEW BALANCE". Further, both sides of each alleged infringing product use a capitalized letter "N" as decoration, infringing the specific decoration right of New Balance sports shoes, and constituting unfair competition. Furthermore, the defendants Xin Ping Heng and Mr. Zheng Chaozhong, amongst others, intentionally put such honorary titles as "King of Jogging Shoes" and "President Jogging Shoes" won by the New Balance brand into advertising and promoting the alleged infringing products, which constitutes false advertising and unfair competition. The above behaviors have seriously damaged the New Balance brand. Suzhou Intermediate Court rendered the following judgment: Xin Ping Heng and Mr. Zheng Chaozhong, amongst others, should immediately stop trademark infringement and unfair competition behaviors, indemnify New Balance China RMB 10 million for its economic losses and reasonable expenses for stopping the infringement behaviors, and publish notices on mainstream media to eliminate adverse effects. As a result, a vast majority of the claims by New Balance China were upheld by the Court.

Further, it is worth mentioning that soon after filing the lawsuit, New Balance China requested Suzhou Intermediate Court to grant a preliminary injunction against the alleged infringement behaviors. On 13 September, 2016, Suzhou Intermediate Court, in accordance with the relevant provisions of Civil Procedure Law of the People's Republic of China, granted a preliminary injunction: Xin Ping Heng and Mr. Zheng Chaozhong, amongst others, were ordered to immediately stop the trademark infringements and unfair competition behaviors.

The first-instance judgment of the lawsuit effectively protects the legitimate rights and interests of New Balance, showing that China is endeavoring to strengthen intellectual property protection and create a fair commercial environment. We believe that a judicial environment, which properly adapts the amount of indemnity to the market value of the intellectual property, will encourage more and more IP proprietors to take legal actions to protect their own commercial interests.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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