New Balance Wins $1.5 Million Trademark Case in China

San Diego – New Balance won a trademark infringement case in China against three Chinese shoemakers that were held to be infringing on New Balance’s signature slanting N logo. The case is notable because this is the largest trademark infringement award ever granted to a foreign business in China.

This is not only a win for New Balance, but the decision paves the way for other foreign companies in China who continue to face the same struggles with intellectual property infringement. Many are frustrated that courts in Beijing have not done enough to protect foreign brands from trademark infringement. The $1.5 million compensation may be small via international standards, but is significant since it occurred in China.

New Boom, New Barlun and New Bunren are the Chinese shoe wear companies that were held to be infringing. The New Balance look alikes were copying everything about the brand aside from the name, but were still protected under China’s trademark laws. China’s trademark laws allow companies to file for a trademark on a “first come first serve” basis. New Boom and the other defendants were held to be relying on “free-riding” and creating consumer confusion.

The Chinese government is said to be determined to confront and take action on the nationwide counterfeit and piracy problem. New Balance has been selling shoes in China since 1995 and has continually faced struggles with infringements. In 2015, New Balance was not as successful when it lost a lawsuit to someone who registered the trademark for the Chinese name of ‘New Balance’. New Balance was fined $16 million, which was later reduced to $700,000.

China passed a new trademark law in 2014 that increased the penalty for trademark infringement. Prior to the new law, infringement cases were insignificant and statutory damages seldom reached $75,000. Under the new law the amount increased to $450,000 which led to the New Balance award being so substantial. With the New Balance case leading the way it appears that China is not all talk and that we might be entering a new era of American intellectual property rights being upheld in the country.

China has a vested interest in intellectual property rights being respected internationally since it increasingly has companies producing more advanced products and gaining their own respected intellectual property. Thus counterfeits may soon begin to harm Chinese companies as much as those in the U.S.