New Balance wins $1.5m in Chinese trademark suit

US sportswear firm New Balance has been awarded $1.5m in damages from three Chinese companies accused of infringing its trademarks.

The shoemakers were found to have copied New Balance's distinctive slanting 'N' logo on sports shoes by the court in Suzhou, which awarded the US firm 10m yuan - thought to be the highest ever damages in a trademark dispute in China.

The court also ruled that the defendants - which were behind a brand known as New Boom in China - must end all production and distribution of products with the infringing logo. While the shoes being sold were not direct counterfeits of New Balance products, there were sufficiently similar to have infringed the US company's "unique decoration rights".

The tactic is common among an element of China's manufacturing companies that have been described as "parasite brands" - trading on the success of overseas companies. Earlier this month, another US company - underwear producer Under Armour - won $300,000 in damages from Chinese company Uncle Martian in a similar case.

It's a turnaround for the company's intellectual property enforcement efforts, and follows a lost lawsuit last year in which a Chinese court ruled against it for trademark infringements and ordered it to pay 5 million yuan (around $750,000) in compensation to a domestic shoemaker.

New Balance's senior counsel for IP Daniel McKinnon said the latest verdict gives the company "renewed confidence in our aggressive IP protection strategy within China."

China has made efforts to improve its protection IP held by foreign brand owners since joining the World Trade organization (WTO), but is still facing pressure from the US, the European Commission and other countries for not doing enough. The latest verdict comes just days after US President Donald Trump ordered an inquiry into China's alleged IP violations and counterfeiting activities.

The Chinese government contends that it has taken steps, including for example introducing higher thresholds for damages, tougher penalties for repeat offenders and specialised courts to handle intellectual property infringement cases.

These cases and others emphasise the need for brand owners to identify and register a Chinese version of their brands to ensure they are protected against trade mark appropriation.

Earlier this year, legendary basketball star Michael Jordan finally secured rights to the Chinese version of his name (Qiao Dan) after five years of legal wrangling, which had been used by a Chinese company for years to sell shirts, sports shoes and other apparel.