Why New Balance's Trademark Infringement Victory in China Is Such a Big Deal
New Balance has won big in China.
A Chinese court ruled last week that three domestic companies infringed New Balance’s signature slanted “N” logo and owe the U.S. shoe company $1.5 million in damages and legal costs. The case is reportedly the largest trademark infringement award ever granted to a foreign business in China.
While the sum New Balance won is not large by global standards, it points to a change in China’s attitude toward piracy and recent tweaks to its corresponding legislation. Before China passed a new trademark law in 2014, damages in infringement cases often fell below the maximum statutory amount of $75,000. The new legislation upped that amount to $450,000.
In China, trademarks are awarded to the first company to file for them. Because of this, the three companies in question—New Boom, New Barlun, and New Bunren—are all protected. Yet according to a copy of the decision reviewed by the New York Times, New Boom “seized market share from New Balance and drastically damaged its business reputation.”
This ruling offers hope not just to New Balance, but to other foreign companies operating in China. The shoe company’s previous efforts to confront counterfeiting there were not as successful. In 2015, for instance, it lost a lawsuit against a man who registered the Chinese name for New Balance. But things seem to be looking up following this most recent ruling. As New Balance’s senior counsel for intellectual property Daniel McKinnon told the New York Times, the decision has given the company “a renewed confidence in our aggressive intellectual-property protection strategy within China.” It’s likely other foreign companies will feel the same way.