Date: May 3, 2016

US New Balance, which was founded in 1906, entered China in 90s of last century with a translated name as 纽巴伦 (Niu Ba Lun) which however was preemepted by its Chinese manufacturer at that time. After business cooperation broke up, New Balance started using 新百伦 (Xin Bai Lun) in Chinese market, but this new name brought them the trouble of infringement.

In 2013 Lelun Zhou, a natural person in Guangzhou China filed a lawsuit against New Balance’s Chinese subsidiary on the ground that New Balance’s extensive use of新百伦in marketing and sales infringed his registered trademarks 百伦 and新百伦.

The defendant argued that the company has been using 新百伦extensively since 2003, when the plaintiff’s 百伦mark had not been put into commercial use, and that 新百伦is a combination of translation and transliteration of New Balance which enjoys renowned publicity.

Guangzhou Intermediate Court believed the defendant kept using 新百伦mark substantially in their sales and marketing with clear knowledge of the plaintiff’s ownership to the 新百伦 trademark reigistration, which shall not be viewed as bona fide use. The court did not support the defendant’s claim of prior right over 新百伦and ordered the defendant cease using 新百伦mark and pay 98 million yuan to the plaintiff., which is the highest amount of IP indemnity ever decided by Guangzhou Intermediate Court.

The defendant appealed and a hearing was held by Guangdong High People’s Court on November 2015, pending judgment till now.

Observation:

It’s unavoidable for international brands to register and use Chinese trademarks in China. Although the 新百伦 case is pending for a second instance judgment, it serves as a warning for both foreign businesses entering China and Chinese businesses entering overseas markets to get early preparation for IP protection to avoid future disputes.