New Balance vs. New Barlun

In April 2006, the Hangzhou Intermediate People's Court of Zhejiang Province made a judgment for the lawsuit brought by New Balance Athletic Shoe Inc. (New Balance) against American New Barlun (Hong Kong) Limited (New Barlun) and Jinjiang Qiuzhi Dongya Footwear Co., Ltd. (Qiuzhi) for trademark infringement and unfair competition. The court ordered the defendants to cease the infringement and make a compensation of RMB 600,000 yuan (US$75,000).

The "N & Device" series of trademarks owned by New Balance have been registered in almost 100 countries such as Japan, Australia, Canada, UK, Germany and South Africa. In China, New Balance registered trademarks "N & Device", "NB", "NEW BALANCE" and the Chinese translation "".

The defendants Qiuzhi was established on July 20, 2000 and New Barlun was registered in Hong Kong on January 5, 2004. The legal representative of the above two companies is the same.

The court found that Qiuzhi and New Barlun used similar representations "N" and "New Barlun" on the shoes they manufactured and sold, which were similar to New Balance's registered trademarks "N & Device" and "NEW BALANCE". When spoken quickly, "New Barlun" sounds very much like "NEW BALANCE". In addition, the two defendants were found to claim that "New Barlun is a one-hundred-year old brand originated from the US for footwear and in the US, New Barlun has a large number of loyal customers" in their advertisement and commercial.

In 2003, New Balance sued Qiuzhi, New Barlun and Hangzhou Aiqiu Footwear Shop (an individual seller of the infringing products) for trademark infringement and unfair competition in the court of Hangzhou, requiring the three defendants to stop the infringement and unfair competition activities as well as to pay the compensation.

Qiuzhi and New Barlun submitted the documents which they used to register the trademark " NIUBARLUN & device" (No. 1323391) and the registration certificate of the trademark "N & device" (No. 997335) to prove that they are the legal user of the trademark " NIUBARLUN & device" and "N & device".

On June 2, 2005, New Balance requested the Hangzhou Intermediate People's Court to grant property preservation. The court then distrained 150 boxes (12 pairs a box) of infringing products owned by Qiuzhi which all have the representations "N" and "New Barlun " on all sides of the boxes. Every piece of shoe is labeled with the representations "N" on the uppers and "New Barlun" on the back of the heel.

The court held that the defendants have used "N" as the representation for their products in their business activities for a long time and they are fully aware that the registered trademark "N" of New Balance is a distinctive distinguishing commercial representation and performance brand. In the meantime, as the defendants advertise that "New Barlun" is a US brand, they further exacerbate the confusion. Therefore, the defendants have the malicious intention to mislead consumers. In addition, the defendants' publicity and advertisement tend to promote a relationship with the New Balance which is confusing and deceptive to consumers. The court held that the defendants have constituted unfair competition. The court also held that the representation "New Barlun" used by the defendants is similar to the registered trademark "NEW BALANCE" owned by New Balance and the defendants have infringed New Balance's exclusive trademark right by using the representation "New Barlun" on the same type of commodity.

What is need to be noted is the method used by the defendants to produce fraudulent products, that is, by registering a company with a corporate name containing a well-known trademark in Hong Kong or other countries and establishing another company in mainland China. The company registered in Hong Kong or the company founded in mainland China will apply or be assigned a trademark similar to the well-known trademark, and then the company registered in Hong Kong will authorize the company founded in mainland China to use its corporate name or the trademark. Later in their business activities, these two companies will infringe the exclusive right of a certain well-known trademark by conducting false publicity. This method has become the usual practice for some domestic copycats to siding along with famous brands.