BEIJING • A Chinese court has ruled that three domestic shoemakers must pay New Balance US$1.5 million (S$2 million) in damages and legal costs for infringing the US sportswear company's signature slanting "N" logo, in what lawyers said was the largest trademark infringement award ever granted to a foreign business in China.
It is a victory not just for New Balance, but also for many other foreign firms which have long complained that Beijing has not done enough to protect their brands. And while the size of the ruling - issued three days after US President Donald Trump ordered an investigation into China's alleged theft of intellectual property - was relatively small by international standards, it was, nevertheless, substantially more than previous penalties.
"I haven't heard of a foreign company getting this level of damages," said intellectual-property lawyer Douglas Clark, who has practised in China and Hong Kong for 25 years.
In the decision, the Suzhou Intermediate People's Court ruled that three defendants that made shoes under the brand New Boom "seized market share from New Balance" and "drastically damaged the business reputation of New Balance".
The court said the three defendants behind New Boom had relied on the "malice of free-riding", saying their actions led to "confusion by a large number of consumers".
The court ruling, which is still subject to appeal, reflects the Chinese government's determination to confront piracy, which has long plagued many firms in a country where fake shoes, bags - and even meat - are widely available.
Many counterfeiters have moved beyond just making knockoffs to copying everything about a brand, short of the entire name. In New Balance's case, the US firm faces challenges from New Boom, New Barlun, and New Bunren, all of which are protected under China's trademark law.