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March 12 2018
The US corporation New Balance is one of the world's biggest sports shoe manufacturers, known mostly for its high-quality, high-performance trainers featuring the iconic 'N' logo.
In 1983 New Balance registered a representation of its logo (Figure 1) for goods in Class 25 with the China Trademark Office.
In 2014 it registered another representation of the logo (Figure 2), also in Class 25.
Shortly after obtaining its first registration, New Balance began to encounter many imitators using the letter 'N' on the side of their trainers. The defendants challenged the similarity between their use of the letter on their shoes and New Balance's use of the trademark that it had registered in 1983. New Balance replied by citing Article 5 of the Anti-unfair Competition Law 1993, which protects trade dress (ie, the unique decoration of a well-known product). The Hangzhou Intermediate Court, the Shanghai Huangpu District Court and the Shanghai Second Intermediate Court recognised that New Balance's use of the 'N' logo on both sides of its trainers constituted the peculiar trade dress of well-known goods and ruled in its favour in judgments dated April 13 2006, April 23 2012 and December 28 2012, respectively.
In 2010 Hainan Qierte Investment LLC filed applications to register two trademarks (Figures 3 and 4) in Class 25. The registrations were granted in 2012.
Both marks were subsequently assigned to another company, Qierte Co, Ltd, in 2013.
On January 7 2014 New Balance brought an invalidation action against the two disputed marks (Figures 3 and 4) before the Trademark Review and Adjudication Board (TRAB), citing Article 28 (similar marks on similar goods), Article 31 (causing harm to another party's prior right) and Article 13 (well-known trademarks) of the Trademark Law 2001. New Balance also referred to the Anti-unfair Competition Law.
On March 31 2015 the TRAB ruled against New Balance, finding that:
New Balance appealed the decision before the Beijing IP Court. On May 10 2016 the court ruled in New Balance's favour, finding that:
As the court found that the registration of the disputed marks had violated Article 28 of the Trademark Law, it held that there was no need to examine the plaintiff's argument regarding trade dress.
Qierte and the TRAB filed an appeal with the Beijing High Court.
On October 25 2016 the Beijing High Court quashed the first-instance judgment on the basis that:
On April 21 2017 New Balance applied to the Supreme People's Court for a retrial.
In its retrial application, New Balance:
In September 2017 the Supreme People's Court formally accepted New Balance's application for a retrial on the ground of possible improper application of the law. The retrial is now pending.
As the Supreme People's Court did not elaborate on the argument of an improper application of the law, it is difficult to speculate on the intentions behind its decision.
The Supreme People's Court may see this case as a good opportunity to apply the new direction taken in its Interpretation of the Revised Trademark Law 2017 regarding how courts should assess the likelihood of confusion. The court's prior practice was to:
The new method, which the court clearly wishes to be applied in all types of case, is to look at the big picture and consider, among other things:
Another possible explanation is that the Supreme People's Court considers that the TRAB and the Beijing High Court erred when they ignored the prior judgments affirming the protection of trade dress.
For further information on this topic please contact Xingnan Ming or Jinling Ding at Wanhuida Peksung by telephone (+86 10 6892 1000) or email (firstname.lastname@example.org or email@example.com). The Wanhuida Peksung website can be accessed at www.wanhuida.com and www.peksung.com.
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