In April 2015, a Chinese court handed down a US$15.8 million dollar judgement against the US shoe manufacturer, New Balance for infringing a third party Chinese character mark. It was held that New Balance has used, knowingly and without authorisation the mark “新百伦” (pronounced as Xin Ba Lun meaning “New Balance” in English) in connection with the sale of its shoes.
New Balance argued that it was not liable for infringement because Xin Bai Lun is simply a direct transliteration of “New Balance”. However, this argument was rejected by the Court, mainly on the grounds that other transliterations of that term would have been available.
Thinking of trading in China?
If you are thinking of trading in China, the first action you should take is to file your marks in China. China adopts the “first to file” principle meaning that even if the entity who files the mark first is not the correct owner of the trade mark, that entity will generally be granted exclusive rights to it.
Furthermore, because a majority of consumers in China do not speak a foreign language, they will generally devise their own Chinese versions of a foreign brand instead of referring to the Latin script. Because of the very nature of the Chinese language, several Chinese character versions of the brand may be devised leading to further confusion. Therefore, the failure to register a Chinese character trademark can impact a brands marketability in China and the use of an unregistered Chinese character mark could even result in an action for trade mark infringement, such as in the New Balance case.
In order for brand owners to retain control of their brands in China, they should, in addition to filing for the foreign language marks, devise and register an official Chinese mark as soon as possible.
Please contact us if you require assistance with the registration of your brand in China and/or if we can assist you to device an appropriate Chinese character mark that accurately reflects your brand in China.