Get your trade marks right in China!
If you do business in China, or you’re thinking about it, or have even half dreamed about doing it, please, please make sure you have your brands(s) properly protected.
Yet another big western company (New Balance, the running shoe people) has come unstuck with their trade marks in China.
The Guangzhou Intermediate Peoples’ Court has awarded the equivalent of US$15.8M in trade mark infringement damages against the Chinese affiliate of New Balance.
Chinese businessman Zhou Moulun had registered the mark ‘Xin Bai Lun’ in 2008. (Xin = new; Bai Lun = transliterated as ‘balance’). Zhou had also acquired the mark ‘Bai Lun’ for shoes, sports apparel, etc in 2004 (his family having registered it in 1996).
Boston-based New Balance established its Chinese affiliate in Shanghai in 2006. It used ‘Xin Bai Lun’ to sell its shoes, and its online store was named ‘Xin Bai Lun New Balance’.
New Balance had unsuccessfully sought to strike out Zhou’s Xin Bai Lun mark. Zhou then sued for infringement of his marks. New Balance claimed ‘Xin Bai Lun’ was simply a Chinese translation of ‘New Balance’. This failed because the proper translation was ‘Xin Ping Heng’, and also because New Balance had previously used the name and brand ‘Niu Ba Lun’ — a transliteration of ‘New Balance’ — in China.
Damages of 98M Yuan were a record for an IP case in this court. They were that high partly on account of the fact that the court found malice on the part of the New Balance affiliate because following the failed attempt to strike out Zhou’s ‘Xin Bai Lun’ mark it had carried on using that mark anyway.
This is yet another in a long line of cases which prove to be costly lessons for western companies, including Australian businesses, who don’t get their trade marks rights in China at an early stage.
The earlier you can do so the better – preferably before even finding a Chinese distributor or partner. Please come and talk to us about how to protect your trade marks in China (and elsewhere) to avoid expensive difficulties and disputes later down the track.
(I am grateful to Cao Jing of Chinese Language and Cultural Advice for reviewing this blog post to make sure that I have the Chinese language parts correct. The errors that remain are all mine.)