istock-489182610_leventkonuk
9 August 2018Trademarks

Getting the right Balance

The gaze of IP stakeholders has been on China in recent months as the US has accused the country of theft and unfair trade practices, but is IP protection in the country really as bad as some people think?

Angela Shi, senior brand protection manager of New Balance Athletics, responds with a resounding ‘no’.

Founded in Boston in 1906, New Balance has its origins as a manufacturer of arch supports and orthopaedic shoes. More than 30 years later, the lifestyle brand made its first pair of running shoes.

Now, more than 110 years since it was founded, New Balance makes or assembles more than four million pairs of athletic footwear per year in the US. It entered the Chinese market in 2003.

Like all foreign companies operating in a country of 1.38 billion people, New Balance must tackle numerous IP challenges, but the brand is confident in its approach to protection.

“By using the right strategy of collaborating to take action against infringers, I don’t see why foreign companies can’t win in Chinese courts,” says Shi.

New Balance is a shining example of successful enforcement in China: in August last year, the brand secured an award of RMB 10 million ($1.5 million) in damages. While this could be considered small by international standards, it’s a significant increase on the previous awards handed down by judges in China.

In a precedent-setting decision, the court upheld all claims from New Balance, ordering a group of sellers to pay the sum for using the brand’s signature slanting logo.

The intermediate court in Suzhou issued an injunction against the defendants in the first instance, an act which is quite rare in trademark disputes, claims Shi.

She adds: “We tried to enforce this nationwide, but some areas didn’t apply the injunction, so the judge issued against the defendants for breach of the injunction. This is even rarer in China.”

In a separate case, back in 2016, the brand had to file an unfair competition claim at a court in Hangzhou over the copying of a decoration on shoes, as it didn’t have any registered trademarks in China.

By the time of the first hearing, the brand had registered its marks. The judge supported the damages claim, awarding RMB 3.3 million, a little above statutory damages, “which set a very good example for future cases”, says Shi. The case is currently pending at the court of second instance.

The number of IP court cases has grown dramatically in the country, says Shi, adding that foreign brand owners are enjoying a good rate of success and that Chinese judges are becoming more experienced in this field.

Collaboration on the cards

Court cases are not the only way that New Balance is trying to stem the tide of infringement and counterfeits.

The examiners at the China Trademark Office monitor and filter suspicious bad-faith filings before publication. Last year, the office automatically opposed 1,000 trademark filings that were too similar to New Balance’s registered marks. However, the brand’s trademark counsel also had to file more than 400 oppositions to other filings at the office.

New Balance fights the huge number of filings in two ways: working with the trademark office and with a student trademark counsel who monitors the filing system.

China operates a first-to-file system, meaning that whoever files a trademark first owns it.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk