There are various difficulties U.S. companies can encounter when doing business in China. This includes challenges when it comes to protecting their intellectual property. One form of intellectual property that can play a very critical role for a business are its trademarks.
There are many differences in Chinese trademark law and court practices as compared to the laws and practices in the United States. These differences are among the things that can pose difficulties for U.S. companies in relation to trademark protection in China.
Now, while there can be challenges to such trademark protection, this does not mean U.S. companies have no options available for trying to safeguard their trademarks in the Chinese market. Skilled U.S.-China intellectual property attorneys can advise such companies on what options they have and can help them with navigating challenges they encounter in connection to such options.
Also, there have been some shifts in Chinese trademark law in recent years that could potentially be heralding some significant changes in the trademark protection environment in China.
Historically, when Chinese courts found domestic companies to have infringed on the trademarks of foreign companies, the damages they awarded were quite small, especially compared to international standards.
However, in 2014, changes were made to Chinese trademark law. In the wake of these changes, there have been indications that Chinese courts may be getting increasingly aggressive in their damage rulings against Chinese businesses that infringe on foreign companies’ trademarks. One thing that points to this is a recent ruling.
The case involved the company New Balance. New Balance accused three Chinese shoemakers of infringing on its logo. A Chinese court ruled in favor of New Balance in this trademark infringement lawsuit and ordered that $1.5 million in legal costs and damages be paid to New Balance. Some say this is the largest damage award they have ever seen granted to a foreign company by a Chinese court in a trademark case.
One wonders if this ruling is signaling a significant widespread shift in damage awards in Chinese trademark cases. If it turns out that it is, one wonders what such a shift will end up meaning for U.S. businesses that operate in China when it comes to their ability to protect their trademarks.
Source: The New York Times, “New Balance Wins $1.5 Million in Landmark China Trademark Case,” Sui-Lee Wee, Aug. 22, 2017