New Balance lost another trademark lawsuit in China, again

New Balance v.s. Niu Ba Lun, history

Just to give you some background on this case, the famous shoe maker whom you probably are familiar with is NEW BALANCE ATHLETIC SHOE, INC., a US company (hereinafter referred to as “New Balance“). New Balance entered into the China market in 1990s working with a local Chinese company called Niu Ba Lun (China) Co., Ltd. (hereinafter referred to as “NBL“).

At that time, New Balance used the Chinese characters which sound like “Niu Ba Lun” as the Chinese name for New Balance. Guess what? It is exactly the same as the Chinese trade name of NBL. The cooperation between New Balance and NBL did not work well and New Balance had to exit the China market in the end. As the result, the Chinese name for New Balance “Niu Ba Lun” was owned by NBL.

In 2003, New Balance re-entered into the China market with a new Chinese name for New Balance – “Xin Bai Lun”. Unfortunately, such Chinese trademark is owned by another Chinese company and New Balance was claimed for RMB 98 million for trademark infringement in 2013. You probably have heard of it in 2015 but it is not the story we are talking about here. Just to let you know that this is the first trademark lawsuit that New Balance had lost in China.

Opposition against the “N” mark

On March 12, 2004, a Chinese company in Fujian province applied to register the following mark on shoes:

the “Disputed Mark” China Registration No.3954764

The Disputed Mark was preliminarily approved on May 7, 2007 and was later assigned (as a pending trademark application) to NBL on December 1, 2009.

Right after the preliminary approval of the Disputed Mark, New Balance opposed against it at China Trademark Office claiming that it was similar to the prior “N” mark registered by New Balance in China in 1983.

Prior “N” mark owned by New Balance China Registration No.175151

As you can see, the above “N” marks are not that similar and therefore China Trademark Office rejected New Balance’s opposition on October 20, 2010.

Then New Balance appealed this case to Trademark Review and Adjudication Board of China (“TRAB“). On December 12, 2011, the TRAB rejected New Balance’s opposition again based on basically the same reason. New Balance did not appeal the TRAB decision to the court, and this, as we will comment later, caused New Balance to lose the second trademark lawsuit in China.

Invalidation against the Disputed Mark

As said above, New Balance did not appeal the TRAB decision in 2011. According to Chinese laws, such decision has become final. As such, when it comes to 2014, New Balance had no choice but to file an invalidation application against the Disputed Mark in order to continue the action against the Disputed Mark.

During the invalidation proceeding, New Balance cited a new trademark owned by it and claimed that the Disputed Mark should be cancelled because it was similar to such mark.

New “N” mark cited by New Balance China Registration No. 3933149

TRAB did not support New Balance’s invalidation application and rejected it on December 15, 2014.

New Balance then appealed such rejection to Beijing IP Court on May 19, 2015.

After hearing, Beijing IP Court held that this case was substantially the same as the opposition case filed by New Balance and rejected by the TRAB in 2011. Since New Balance did not appeal such opposition case, it should take the corresponding legal consequences. According to the law, if the TRAB has made a final decision on an opposition case and the opposing party does not appeal, the opposing party shall not apply to review the same case with the same ground and facts. The court further commented that both New Balance and NBL have been using their respective trademarks in the market for years and such trademarks have been co-existing in the market for years as a matter of fact.

Based on the above, Beijing IP Court decided that the TRAB shall not accept the invalidation case filed by New Balance in 2014 and therefore revoked the TRAB decision on the invalidation case. Beijing IP Court further decided that it was not necessary for the TRAB to make any decision on the invalidation case filed by New Balance.

Comments from China Filing

Theoretically, New Balance still has the chance to appeal the decision made by Beijing IP Court. However, the chance for New  Balance to overturn this case does not seem to be very high.

This means that New Balance may have to swallow the bitter pill that both “N” marks owned by NBL and New Balance will continue to co-exist in the China market. As the result, it seems that New Balance still has a lot to do with its trademark strategy in China.