From Michael Jordan to New Steadiness: The Newest Developments in Chinese language Trademark Litigation | The Vogue Legislation

After nearly a decade of litigation, Michael Jordan gained a tough battle in opposition to Qiaodan Sports activities Co., Ltd. China. In a choice dated March 26, 2020, the Supreme Folks’s Court docket of China (“SPC”) overturned the decrease courts’ choices and ruled in favor of the NBA legend in one of many invalidation proceedings over a trademark registration for “Qiaodan”– a generally acknowledged phonetic translation for the title “Jordan” – together with a design that depicted a basketball participant in midair making an attempt a layup, which Qiaodan Sports activities had held since 2007 to be used in reference to its manufacturing, advertising and marketing, and sale of clothes.

The primary points earlier than the Chinese language courtroom was whether or not the registration and use of the disputed trademark infringed upon Michael Jordan’s rights in his title and his portrait, each of which predated Qiaodan’s 2007 registration, as protected by Article 31 of the Trademark Legislation of China, and whether or not, because of this, the registration must be invalidated. 

In its March decision, the SPC held that regardless of the decrease courts’ choices in opposition to Jordan (largely on the idea that “Qiaodan” is a standard surname with none “absolute” or “sole” corresponding relationship with Michael Jordan), the “Qiaodan” title has acquired a excessive stage of fame and popularity in China, and that Chinese language shoppers are accustomed to referring to Michael Jordan by the transliteration of Qiaodan. Due to the robust, corresponding relationship between “Qiaodan” and Michael Jordan, the courtroom held that the registration and use of the disputed trademark by the Fujian-headquartered firm infringed Jordan’s rights, as it’s prone to trigger confusion among the many consuming public, if it has not executed so already.  

Not like the decrease courts, the SPC was persuaded by the substantial quantity of proof submitted by Jordan’s counsel, together with over 200 newspaper articles, and greater than 1,000 articles in sports activities and academic magazines, in addition to varied books, which used the Chinese language transliteration for Jordan to discuss with Michael Jordan. 

Counsel for Jordan additionally submitted two highly-favorable investigation stories, which confirmed that 85 p.c of the interviewees – particularly, residents in Beijing, Shanghai, Guangzhou, Chengdu and Changshu – mentioned “Michael Jordan” was the very first thing that might come to their thoughts when “Qiaodan” was talked about, versus simply 15 p.c, who mentioned “Qiaodan Sports activities.” Additional, when requested whether or not they believed that Michael Jordan and Qiaodan Sports activities have been affiliated, practically 70 p.c mentioned sure. Much more considerably, over 90 p.c of the interviewees who had purchased the merchandise of Qiaodan Sports activities revealed that they believed the merchandise of Qiaodan Sports activities have been associated to Michael Jordan.

With such proof in thoughts, the SPC – which is the very best courtroom in China – discovered that the usage of the “Qiaodan” mark by Qiaodan Sports activities quantities to trademark infringement, and ordered the China Nationwide Mental Property Administration to re-examine the invalidation proceedings involving the mark at concern.  

The highly-anticipated resolution is undoubtedly a win for celebrities and model house owners who want to depend on prior title rights to defend in opposition to infringements in China, the place the trademark system typically operates on a first-to-file (and never a first-to-use) foundation in the case of amassing rights, save for updates to the regulation to incorporate unhealthy religion submitting recourse for model house owners and people, which have been focused by such infringement. 

Of specific be aware must be the truth that in relation to the proving of prior title rights by Jordan, the SPC adopted a extra relaxed strategy of requiring solely a “steady” (versus “absolute” or “sole”) corresponding relationship between the title in dispute and the individual claiming to have the prior rights.  It must be famous that other than the articles submitted, the outcomes of the events’ shopper research performed an necessary position in persuading the SPC to simply accept the “steady” corresponding relationship between Michael Jordan and “Qiaodan.” As such, this judgment serves for instance as to how – precisely – correct survey/investigation must be performed.

New Steadiness v. New Barlun 

In a separate case, the Shanghai Pudong Folks’s Court docket (“PPC”) lately issued a choice in favor of New Steadiness in its unfair competitors lawsuit in opposition to New Barlun Co Ltd., ordering the Chinese language athletic firm to pay the Boston, Massachusetts-based sportswear big damages of RMB 10.eight million ($1.5 million) in reference to its unauthorized use of the stylized letter “N” on its footwear. The PPC’s April 2020 decision – which introduced an finish to New Steadiness’s 16-year battle in opposition to the copycat model that had loved important success by imitating New Steadiness’s stylized “N” emblem – adopted from years of losses for New Steadiness within the type of opposition and invalidation proceedings in opposition to the registration of the mark by New Barlun. 

Because it seems, New Barlun efficiently obtained a trademark registration for a lookalike mark lengthy earlier than New Steadiness, thereby, highlighting one of many extra widespread ways employed by trademark infringing events: the registration and use of marks which are nearly similar to international manufacturers’ marks with a slight modification as a way to keep away from going through any objection throughout the registration course of. 

On this case, New Steadiness efficiently argued that other than its rights within the “N” emblem, itself, it had amassed commerce gown rights within the placement of its signature “N” on each side of its sneakers resulting from its repeated and constant use of the mark and its specific placement on its footwear since 2001, which was earlier than the appliance of the lookalike mark by New Barlun, resulting in its win primarily based on unfair competitors.

In siding with New Steadiness, the PPC held that New Steadiness’s commerce gown rights, that are civil rights, and its trademark rights, that are obtained by administrative procedures, are separate forms of mental property with completely different scopes and durations of safety. As such, no matter whether or not New Barlun had obtained a registration for the “N” mark, it was utilizing the mark within the precise format on its footwear, and thus, gave rise to merited claims of commerce gown infringement/unfair competitors by New Steadiness. 

A key takeaway right here is that along with pursuing trademark infringement actions, model house owners ought to take into account asserting unfair competitors claims, as that can probably trigger the courtroom will probably be extra prepared to bear in mind all related elements, as an alternative of merely ruling on the idea of the existence of a trademark registration.

What Manufacturers Must Know

Taken collectively, these two instances are according to bigger tendencies exhibited by Chinese language courts lately, such has seen them train their discretion and award damages above the statutory limits and/or exhibit growing willingness to guard non-native model house owners’ rights in China after exhibiting important choice for native entities.

As World Trademark Evaluation previously asserted, damages awards in civil trademark infringement instances are likely to quantity to “the precise losses that the plaintiff suffers because of this” of the infringement, and in instances during which “precise losses can’t be ascertained, damages could also be calculated primarily based on any illicit earnings that the defendant earns from the trademark infringement.” Even with that in thoughts, primarily based on “a number of judicial interpretations and judicial opinions,” and relying on whether or not “the trademark infringement is malicious and ends in critical damages,” courts could go (and have gone) “past the statutory Rmb3 million [$429,565] restrict and grant considerably greater damages if supporting proof is accessible,” which is exactly what occurred within the New Steadiness case.

This trend goes back to 2015 when the Beijing Mental Property Court docket awarded its first-ever most statutory injury beneath China’s trademark regulation in favor of luxurious outwear maker Moncler in its trademark infringement and unfair competitors struggle in opposition to a local Chinese language attire firm.

Furthermore, it’s value noting in reference to each instances that non-native rights holders searching for to stomp out infringement of their marks in China could depend on present rights different these offered by trademark regulation as grounds for litigation, and are inspired to construct their instances by producing a big quantity of proof, together with detailed and controlled investigations and surveys with notarization (as we observe that courts are extra inclined to simply accept them as proof) to ascertain secondary which means. 

These instances are probably simply two of a rising pool of litigation that can see Western model house owners efficiently claiming rights of their logos in China from infringing events and trademark squatters.  

Ken Hung is a Accomplice of Vivien Chan & Co. 

Vivian Chan is the founding and senior companion of Vivien Chan & Co., a Better China regulation agency with workplaces in Hong Kong and Beijing. (Edits/additions courtesy of TFL)