International companies looking to protect intellectual property rights in China will welcome a victory for US sports brand New Balance which saw the company win the highest award ever for a foreign company in a trademark dispute. The Suzhou Intermediate Court awarded the New Brand £1.2m after three local companies were found to have infringed its trademarked slanting ‘N’ logo.
Commenting on New Balance’s win over shoe counterfeiters Karen Fong, partner at Collyer Bristow, says: 'New Balance’s ‘zero tolerance’ policy towards counterfeits and perseverance in the Chinese civil courts paid off when it won a record breaking award in damages for a foreign company in an intellectual property dispute. This would have been a much welcomed win for the US company especially after the controversial loss of the use of its Chinese name “Xinbailun” to a Guangdong businessman last year who registered the mark first in China. New Balance was ordered to pay him RMB 5 million (about US$750 k), reduced on appeal from the whopping original sum of RMB 98 million (about US$16 million).'
Ms Fong said an amendment to the Chinese trade mark law in 2014 increased awards of statutory damages from RMB 500k to RMB 3 million and allowed for the possibility of triple damages for serious or bad faith infringement. Since the law came into force, awards of damages in trade mark cases have been on the rise. In both New Balance cases, the Courts have been prepared to make awards in excess of the maximum sums. She added: It will be interesting to see whether this award is reduced on appeal.' She added: 'This is a timely judgment – a blow to counterfeiters and a strong message to foreign brand owners in the fashion industry that China takes this seriously.'
Recently brand owners such as Moncler, Hugo Boss and BMW have been successful in winning significant damages in China.