TheFinalJudgmentMadeintheCaseof“NewBalance”

On June 23, 2016, the Guangdong Higher People’s Court made the final judgment in the infringement case regarding the trademark “新百伦” (the counterpart trademark of “New Balance” in Chinese) between Mr.Zhou Lelun and the New Balance Trading (China) Co., Ltd.. In this final judgment,the court significantly reduced the damages for the infringement by the company New Balance.
Mr. Zhou Lelun, the brand owner of “百伦” and “新百伦”, applied for the registration of above-mentioned trademarks respectively in 1994 and 2004 in class 25 for shoes. The registration succeeded in 1996 as well as in 2011.
On July 15, 2013, Mr. Zhou filed a lawsuit against the New Balance Trading (China) Co., Ltd., alleging the company New Balance infringed his trademarks “百伦” (865609) and “新百伦” (4100879) by using “新百伦” on the sport shoes and requesting the payment of damage of RMB 98 Mio.. In the firstinstance, the Guangzhou Intermediate People’s Court ruled that the company New Balance infringed the trademarks of Mr. Zhou, shall stop the useof the brand “新百伦” on its products and pay damage of RMB 98 Mio. to Mr. Zhou, which equals to 50% of the total profits of the company New Balance during the period ofinfringement. Later, the company New Balance filed appeal against the ruling ofthe first instance.
In the final judgment, the appellate court confirmed part of the ruling of the first instance court, such as the infringement of the trademark by the company New Balance. However, the appellate court considered it inappropriate that the first instance court determined the amount of damages based on the total profits of the company New Balance, saying there were many factors contributing to the total profits and the usage of “新百伦” was merely one indecisive factor. Considering of the bad faith of the company New Balance, the loss of Mr. Zhou, the usage mode of the infringing mark, the scale of infringement and the duration of infringement, the appellate court ruledthat the amount of damages (including the compensation of reasonable costs and expenses of Mr. Zhou) should be RMB 5 Mio..