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Chinese courts issue ruling finding trademark infringement

The ever-changing marketplace in China has resulted in many questions regarding the proper steps to take to ensure that a company is able to protect its intellectual property rights. Recent changes to IP laws in the China have led to some positive developments for companies here in the U.S. that do business in the country.

For the past several decades, there was often little American companies could do to get Chinese officials to take action when a Chinese company was infringing upon trademarks. We have probably all seen advertisements or emails for designer goods that are substantially marked down from their usual prices. Manufacturers in China are producing knock-off items and then selling them at a lower cost, which hurts the American company that otherwise sells those goods.

A recent case in China has made the news regarding the use of these trademarks. The New Balance shoe company filed suit against several manufacturers who were using the trademarked New Balance “N” logo on their goods without the company’s permission. The manufacturers were Chinese companies selling the shoes within China.

In China, trademarks are usually granted to the first to complete the paperwork. So the Chinese companies that filed these documents, and made shoes called “New Boom” and “New Bunren,” were legally permitted to sell the goods because they had received a Chinese trademark.

This past September, New Balance had received a preliminary injunction that prevented these manufacturers from selling goods using their “N” trademark. Several manufacturers violated this injunction, and New Balance filed suit against them in the Chinese courts. The courts rarely impose any penalties upon the trademark infringers, so it was somewhat surprising when the courts fined one of the offending companies over $500,000.

Those that follow IP laws in China are encouraged with the ruling, but this is just one ruling. There are countless examples of companies infringing upon IP rights, so it remains to be seen exactly how much impact this ruling will have upon other companies that are producing goods that violate registered trademarks.

Should you be contemplating entering the Chinese marketplace, or if you need help protecting your IP inside the country, you should speak to an experienced attorney regarding the options available to you. An attorney who understands the way business is conducted in China will be able to help you understand the proper path to take to accomplish your specific objectives.

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