Don’t be the Next “New Balance”

As the proverb says, when in Rome, do as the Romans do. When entering into the Chinese market, a good Chinese name for foreign brand would be much easier for the local consumers to remember, helping to improve the brand image and promote sales of products. For example, BMW is called “宝马 (bao ma)” in China, which means precious horse. This Chinese name characterizes the noble style of BMW cars and conforms to the cognition of Chinese consumers towards dignity. Nowadays, “宝马” has become a symbol when it comes to premium cars.

In most case, foreign brand owners would have consciously registered their foreign-language trademarks in China for protection. However, one thing to be often overlooked is the protection to the Chinese names of their foreign-language trademarks. Here are some tips on how to protect the Chinese name in trademark sense.

China adopts the first-to-apply principle in trademark registration. The most effective and economic way to protect a trademark in China is to apply the mark earlier than anyone else. Otherwise, huge losses may be suffered. The story of NEW BALANCE and its Chinese name gives us the lessons.

Due to negligence of registering its Chinese name “新百伦 (xin bai lun)” in time and continuing usage of this unregistered trademark, New Balance was later sued by Zhou Lelun, the registrant of the trademark “新百伦”, for trademark infringement. The higher court at last ruled for Zhou, with a compensation of 5 million yuan (about USD 738 thousand).

It was not a good option for New Balance to use its Chinese names without registration. What’s worse, it continued to use the Chinese name after someone else had already registered this Chinese name as trademark, which eventually led to trademark infringement at the end. If New Balance had registered its Chinese name in advance, the situation may be different.

When making the trademark application for registration in China, attention shall be paid to the composition of the mark to be applied, as well as the selection of classes.

For flexible use, the foreign-language mark and the Chinese-character mark shall be at first applied respectively. Then for comprehensive protection, the application of combined trademark is suggested. Trademark copycat is a common issue in China, warning the foreign trademark owner not only registers his Chinese–character mark in use, but also applies some similar Chinese names as defensive marks.

In respect of class selection, it is suggested to divide into 3 ranks. The premier rank shall be core class(es) in which the mark has been actually used. The second rank should be relevant class(es) in which the mark has not yet been involved but is to be developed in the near future. The third rank is defensive class(es) against potential trademark squatters in which the goods/services are closely connected with the core goods/service in the market place. For example, Class 9 (sunglasses), Class 14 (jewelry)、Class 18 (bags) and Class 25 (clothes) always share the same marketing channel, and trademark squatting frequently happens among these classes.

(To be continued)