MercoPress. South Atlantic News Agency

Strong message to trademark infringements in China: New Balance wins case against local shoemakers

The N brand case is considered the highest award to a foreign company in a trademark dispute in China, which has been tightening its laws

New Balance has won a record payout in a Chinese trademark case after three local shoemakers were found to have infringed the brand's “N” logo. A Chinese court awarded the US sportswear firm more than 10 million Yuan (US$1.5m).

 Lawyers believe it to be the highest award to a foreign company in a trademark dispute in China, which has been tightening its laws to tackle the widespread problem of trademark abuse.

A court in the city of Suzhou, west of Shanghai, handed down a ruling last week against three defendants for infringing the American apparel-maker's iconic trademark, and the deceptive promotion of their products.

Though small by international standards, the 10 million Yuan award marks a significant increase on previous penalties as China cracks down on brand theft.

“It's definitely the largest trademark award to a foreign company,” said Paolo Beconcini, senior global brand protection consultant at law firm Squire Patton Boggs.

China has been strengthening its trademark laws since joining the World Trade Organization in 2001.

Mr Beconcini, who has worked on Chinese intellectual property (IP) cases for 15 years, said recent legislative reforms have significantly boosted brand protection.

The changes include higher thresholds for statutory damages, new punitive damages for repeat infringers, and the establishment of four specialized IP courts.

“China is not what it was in 2001,” Beconcini said, “Rights can be enforced in China… you can win cases.”

Last year US basketball legend Michael Jordan won a landmark dispute in China's supreme court in a long-running dispute over the use of his name by a local sportswear company.

But while defenses for companies exist, trademark violations remain widespread.

“For every big brand that is infringed in China, there are many, many less famous brands that are victims of this situation,” Mr Beconcini said.

New Balance has been involved in long-running trademark battles in China where is has more than 2,000 stores.

The firm took a knock last year when a Chinese court ruled against it for trademark infringements and ordered New Balance to pay 5 million Yuan in compensation to a local company. But its latest win is seen as a victory for international firms in China.