economics

New Balance Wins Chinese Trademark Infringement Case

Published August 29, 2017 by Carl De Luna
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There was great surprise when American sports outfit manufacturer New Balance won a trademark infringement case in China against three local manufacturers found to be infringing New Balance’s “N” logo. New Balance was awarded $1.5 million USD (10 million yuan). It is the largest amount awarded to a foreign company in a Chinese trademark dispute. The court, based in Suzhou, found the three Chinese manufacturers were infringing New Balance’s iconic trademark as well as participating in deceptive promotion of their products.

This is great news for China as well as foreign businesses operating there. The country has been instituting reforms since its entry to the World Trade Organization in 2001. Co-incidentally, the ruling came a week after the United States launched an investigation into China’s trade practices. The country can now argue they are prosecuting those who are caught infringing the intellectual property of American brands. Last year, basketball legend Michael Jordan won a similar trademark case involving the use of his name by another local manufacturer. This recent trend looks promising for international brands as they are now seeing stricter controls by the Chinese government in protecting trademarks and copyrights.

However, it was also last year that New Balance lost another trademark case in China and were told to pay $757,461 USD (5 million yuan) to a local manufacturer. This means that although progress can be seen, it is still not well-established. There are still moments where the copyright violators are the ones who are favored. Only a shift in government policy could sway the courts to be stricter towards the concept of intellectual property and trademark. The Chinese government should also do their part and be harsher on violators to prevent them from ever using the likenesses of established brands and companies. It is often suggested that the Chinese government is supportive of locals who profit from making counterfeit merchandise. The U.S. government sees these types of infringements as just the tip of the iceburg of a Chinese policy dedicated to steal U.S. technology in almost every sector from defense, to automotive, software, pharmaceuticals, and more. There are some who believe that China’s concession in intellectual property may be a cover to get away with the real important work of stealing U.S. technology.

But the New Balance case win is huge for international brands who have been cheated out of profit by local manufacturers. This may hopefully be the catalyst for them to stand their ground in China and profit from what is legally theirs in the first place. For the Chinese government, this is also a huge win for them as it can be helpful in selling the notion that China is not afraid to lay down the law and punish violators and they are able to protect the intellectual property of brands.

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