This term, translated as 'New Balance' was already being used by the American company in China when the trademark was filed. They objected to Zhou’s registration of the mark but the Chinese Trademark Office allowed the process to continue.
According to the Shanghaiist, in 2015 New Balance lost the infringement case presided over by the Guangzhou Municipal Intermediate People’s Court and was told that they had to pay Zhou damages of 98 million RMB. Furthermore, the American company was accused of using the mark in bad faith since they knew of the existence of Zhou’s trademark, having appealed their registration, and still continued to use it once the mark had been granted. Despite appealing this decision, the court refused revoke their ruling although they did lower the amount of damages to be paid to 5 million RMB ($756,945).
According to Reuters, Amy Dow, a spokeswoman for New Balance declared that “This ruling is particularly concerning as it is contrary to the rest of the developed world's understanding of Intellectual Property."
However, New Balance is not the only western company that is struggling to take hold in China. Although there have been a few small victories for companies such as Facebook, western businesses in general have been having less success in trademark cases than expected in recent times. Apple recently lost a battle for the trademark “iPhone” to a chinese handbag company.
Chinese law states that for a company to be successful in their trademark application they have to first prove that their brand already is well known in China, which makes it difficult for foreign companies to safely enter the market. Furthermore, in China it is generally the company that first used the brand name that owns rights to it (although this was not the case with the “"Xinbailun", New Balance, mark).
In fact, some Chinese companies have now taken to registering names of big foreign corporates in order to profit from them. When the corporate tries to enter the chinese market they would be forced to either fight for their rights in court, rebrand their product or give in and buy back their own trademark.
The best way to protect your brand is through registering a trademark. When entering a new market, it is best to register a trademark before you begin trading. Although this is not always possible in some countries like China, your company should still aim to file for a trademark application as early as possible to reduce the likelihood of future conflicts with other similar brands.
For advice and more information on searching, acquiring, registering and enforcing Trademarks please visit our website, http://www.lipex.com.
Our unique database of trademarks for sale or license could save you time and help protect your brand.
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