New Balance has landed a favorable — and landmark — ruling in a trademark infringement case in China, prompting many to proclaim, “Progress!” Interestingly, the court’s decision comes just 10 days after President Donald Trump revealed a probe into China’s alleged “theft” of U.S. intellectual property. It also came on the same day as the modern-day hashtag, one of fashion’s favorite marketing tools, turned 10 years old.
New Balance, New Progress in China?
Just 10 days after President Donald Trump signed a presidential memorandum authorizing an investigation into China’s alleged “theft” of American intellectual property, New Balance was handed a win in its trademark infringement case against three Chinese entities, which, according to its lawsuit, were making unauthorized use of its “NB” mark.
The Suzhou court’s ruling — which comes with a $1.5 million damages award for New Balance, something of small change considering the size of awards in trademark infringement suits in the U.S. — is noteworthy nonetheless given the difficulty non-native Chinese entities face in prevailing in intellectual property suits in China, a country that has been accused of not only turning a blind eye to U.S. IP but blatantly infringing it, as recently as last week by the president of the U.S.
Fashion and other consumer goods brands have struggled to reclaim their rights in China and/or put a stop to infringements, and when it comes to trademarks, in particular, China has proven highly problematic territory for brands ranging from Apple and Facebook to Hermès and Moncler, many of which have fallen prey to the truly widespread amount of trademark- and cyber-squatting at play in the Chinese market.
Unlike in the U.S., where trademark rights are acquired by the first party to use a certain mark in connection with goods and services, China awards rights to the first party to file an application for registration with its IP office. In lieu of the need to prove good faith use of a trademark in commerce in order to achieve a registration, native Chinese entities have taken to filing registrations for well-known Western brands before those companies expand East and then either selling goods under that name and profit handsomely or to essentially hold the trademark ransom and demanding an exorbitant fee from the company to recover it.
Carol Wang, a lawyer at Lusheng Law Firm, which represented New Balance in the case, said in a statement that the brand is optimistic that the court’s decision in this case, “while rare,” will still “send a strong and powerful message that should make it easier for foreign brands doing business here.”
If China’s response to the Trump-imposed probe is any indication, the New Balance suit was far more coincidence than a sign that China is planning to actively play nice with the U.S. and its IP holders. A spokesman for the Ministry of Commerce said on Thursday that it “will take all the necessary measures to resolutely defend the interests of China and Chinese firms” against a U.S. trade investigation.
As the ministry’s go-to response to criticism of China’s willingness to improve its efforts to address IP “theft” and infringement issues, it has expressed “strong dissatisfaction” with the U.S. launch of the probe into the country’s alleged theft of U.S. intellectual property, calling it “irresponsible.”
Not for nothing, the country has in the past several years been introduced revisions to its trademark laws to include provisions to assist non-native rights holders in fighting the widespread practice of trademark- and cyber-squatting. Most notably, beginning in May 2015, trademark-specific provisions were implemented to allow for greater damages amounts in cases of infringement, and to provide procedures to reduce bad faith filing and a quicker turnaround time for trademark applications, as well as stricter standards against the unauthorized use of “well-known” marks.
Happy Day for Hashtags
Hashtags — as we currently understand them — turned 10 this week, and with their decade in the world has come a barrage of legal issues surrounding the use and protectability of such metadata labels. Initially utilized to parse data for operating system programming — back when it was still referred to as the “hash symbol” — the hashtag has come to serve as a popular way for brands to market themselves, and promote their products and services.
Yes, in the 10 years that have elapsed since Chris Messina, a former Google designer, first proposed that Twitter adopt the hashtag as a way to organize “groups,” brands have taken to relying on and deriving value from hashtags, particularly ones that are distinctive to their brands.
Alexander Wang, for instance, used #Wang10 to celebrate his brand’s 10-year anniversary. Marc Jacobs Insta-scouted models for his fall 2015 ad campaign thanks to #CastMeMarc. Nike had its #BetterForIt campaign, and Nasty Gal’s Sophia Amoruso coined none other than the #Girlboss hashtag.
Not surprisingly, after creating a hashtag — or a handful of hashtags — that caught on amongst consumers and social media users, many companies have looked to the law to protect their tags and prevent others from using them in ways that might confuse consumers. And even less surprising — given the fact that trademark registrations have been awarded for hashtags — hashtag-specific lawsuits have been filed, but more commonly, hashtags have been cited in many trademark suits. And the role that these little identifiers pay for brands — and lawsuits — does not appear to be ceasing anytime soon.
Julie Zerbo is the founder of The Fashion Law.