On June 23, 2016, the Guangdong High Court of China (the High Court) released its decision in New Balance Trade (China) Co, Ltd v Zhou Lelun. In this decision, the High Court upheld the lower court’s decision finding the Chinese affiliate of New Balance to be liable for trademark infringement of the registered trademark 新百伦 (Xin Bai Lun). However, the High Court reduced the damages awarded from 98 million yuan (approximately $20 million CAD) to 5 million yuan (approximately $1 million CAD).
Previously, in April 2015, the Guangzhou Intermediate Court (the Intermediate Court) awarded Zhou Lelun, owner of the registered Chinese trademark 新百伦, a judgment for 98 million yuan against New Balance, finding that New Balance’s use of the trademarks NB and NEW BALANCE in combination with the Chinese transliteration, 新百伦, constituted trademark infringement of Mr. Zhou’s registered mark.
In reducing the damages awarded to Mr. Zhou, the High Court considered the following factors:
- the bad faith of New Balance in using the registered mark despite previous knowledge of the existence of the mark;
- the actual losses suffered by Mr. Zhou;
- the manner in which New Balance used the trademark;
- the reputation of both parties;
- the scale of distribution of infringing goods;
- the duration of infringement; and
- the reasonable expenses to cease the trademark infringement.
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Summary By: Michael House