A Chinese affiliate of US-based sports footware manufacturer New Balance, has been ordered by a court in Guangzhou (China) to pay €15.000.000,- to a local shoe manufacturer for trademark infringement.
In the year of its 100th anniversary (2006) Boston-based sports brand New Balance set up an official affiliate in Shanghai to sell its products across mainland China.
As many foreign companies do, New Balance chose a Chinese name: ‘Xin Bai Lun’, that roughly translates to New (‘Xin’) Balance (‘Bai Lun’, a transliteration of ‘balance’).
At that point it appeared that the trademarks ‘Bai Lun’ and ‘Xin Bai Lun’ were already registered by a Guangzhou businessman, for shoes and sports apparel. Coincidence? Maybe, maybe not. Perhaps not.
So now the Guangzhou Intermediate People’s Court found that the actions of the Chinese New Balance affiliate had been “in bad faith”. The court also added that the proper translation of ‘New Balance’ should have been ‘Xin Ping Heng’. It also noted that New Balance products had also previously been sold in China under the name ‘Niu Ba Lun’, a complete transliteration of ‘New Balance’.
A wise lesson for businesses attempting to enter the Chinese market. Do a thorough availability check for you mark and its Chinese version. Court action in China takes very long and the outcome is not very predictable.