When Fighting Back Backfires

In 2015, American footwear giant New Balance was ordered by a Chinese court to pay 5 million yuan (approximately 800,000 USD) in damages to a Chinese businessman who had registered the Chinese transliteration of "New Balance" — "Xin Bai Lun" (新百伦).

The twist? The Chinese company that sued New Balance had registered the name after New Balance was already operating in China. New Balance argued they had prior rights. The court disagreed.

The Chinese Name Problem

New Balance had been selling shoes in China under the English name "New Balance" and using various Chinese translations informally. A Chinese individual named Zhou Yuelun registered "Xin Bai Lun" (新百伦) as a trademark in 2004.

New Balance was aware of the registration but continued using "Xin Bai Lun" in their Chinese marketing, believing their prior use of the English name gave them rights to the Chinese translation. They were wrong.

The Court's Ruling

The Guangzhou Intermediate People's Court ruled that:

  1. Zhou Yuelun owned the registered trademark "Xin Bai Lun"
  2. New Balance's use of "Xin Bai Lun" constituted trademark infringement
  3. New Balance must pay 5 million yuan in damages

The court found that New Balance had been aware of the Chinese trademark registration but continued using the name anyway, which increased the damages award.

Key Lessons

1. Your Chinese name is a separate asset. Owning "New Balance" in English doesn't automatically give you rights to "Xin Bai Lun" in Chinese. Each version needs its own registration.

2. Ignoring existing registrations makes things worse. New Balance knew about the Chinese registration but continued using the name. Courts view this as willful infringement, leading to higher damages.

3. "Translation" trademarks are real threats. Squatters often register Chinese transliterations of famous foreign brands. These registrations are legally valid in China's first-to-file system.

4. Damages can exceed what the squatter "deserves." The 5 million yuan award was based on New Balance's profits from using the name, not on the squatter's actual losses. Infringement damages in China can be substantial.

5. Act fast or pay more later. New Balance could have challenged the registration early or negotiated a purchase. Instead, they ignored it and ended up paying damages to the very person they should have acted against.

The Bottom Line

New Balance is a billion-dollar global brand with experienced legal teams. Yet they lost 5 million yuan because they didn't prioritize registering their Chinese name. The lesson for every international brand: your Chinese brand name needs to be registered as a trademark, separately from your English name.