1、Who Owns Trademark XinbailunRecently， under the ruling of the Guangzhou Municipal Intermediate Peoples Court， Xinbailun Trading China Co Ltd， an affiliate of U.S. sneaker maker New Balance， was ordered to compensate Chinese businessman named Zhou Lelun 98 million yuan for infringing his“Xinbailun tr

2、ademark rights.In addition to coughing up such a huge amount of money for the compensation， Xinbailun Trading was required to stop sell-ing products in the Chinese market under the trademark of “Xinbailun and publicly apologize for the harm caused to Zhou.Chinese character “Xinmeans “New in English

3、while“Bailun is pronounced similarly to “Balance.The Eight-year-long BattleEstablished in Boston in 1906， New Balance has a history of one hundred years and is billed as one of the worlds top four sneaker brands.The sportswear giant prides itself on its brand value. But in China， the giant was force

4、d to stop using the name of “Xinbailun to promote its products. By far， on New Balances Chi- nese official website， as well as online stores in Tmall and JD ， two leading ecommerce providers， the name of “Xinbailun had been eliminated.In China， it is common to see companies aiming at getting huge co

5、mpensation to squat the Chinese character mark of foreign brands before the latter made their first foray into the market.Four years ago， Apple lost the legal battle with Hong Kong-based Proview Technology Co Ltd over the iPad trademark in China. Proview registered the trademark back in 2000.However

6、， the case is differ-ent. In June 2004 when Zhou applied to register the trademark of“Xinbailun in Class 25 for his sportswear company， the brand of New Balance was little known in the country. In fact， as early as in 1996， Zhou registered the trademark of “Bailun.According to records on the website

7、 of the China Trademark Office， among four applications for “Xinbailun trademark， only the one submitted by Zhou had got approval from trademark authority and it is still valid now.As the owner of “Bailunand “Xinbailun trademarks， Zhou set up a sportswear company which produces mens shoes under the

8、two trademarks and sell shoes at large-sized shopping plazas.The legal battle over the trademark between Zhou and New Balance began in December 2007 when US-based New Balance Athletic Shoe Inc filed an objection against Zhous application for the registration of“Xinbailun， arguing that the trademark

9、copied and imitated“New Balance. The Massachusetts-based company also submitted the application for the “Xinbailuntrademark to Chinese trademark authority back in September 2006.However， after failing to block Zhous registration of the trademark， New Balance continued allow Zhou Xinbailun Trading， w

10、hich was set up in 2006 for the sales and marketing of New Balances shoes in China， to use the trademark. Official data also show that the US companys“Xinbailun trademark application is still in an invalid state.Therefore， Zhou filed a lawsuit to Guangzhou Intermediate Peoples Court against Xinbailu

11、n Trading for the infringement of his trademark rights. According to Zhou， the affiliate of New Balance uses “Xinbailun as its trademark and sells products under “Xinbailun New Balance in its online shops， which misled consumers.Xinbailun Trading rebutted that New Balance began to sell shoes with th

12、e name of “Xinbailun in China as early as in 2003 when the trademark “Bailun was not yet used commercially.The Shanghai-based company also added that “Xinbailun was used as the name of the company and did not infringe on Zhous trademark rights. It even accused Zhou of squatting the Chinese trademark

13、 “Xinbailun.Why New Balance lost the China trademark case？ Li Zhenghong， a lawyor at Shanghai Dacheng Law Office， explained，“China adopts the registration system to protect the trademark rights， which means the one who is first to register the trademark owns it. However， in the United State， the one

14、 who is first to use the trademark owns it.Obviously， Xinbailun Trading made a huge mistake in dealing with the trademark issue， as the trademark law in China is different from that in the US.According to Chen Ruojian， a partner of Duanheduan Law Office， New Balances infringe-ment was obvious in thi

15、s case， as it used the name of “Xinbailunto promote its products after knowing that the name had been trademarked.98-Million-yuan CompensationSome said the compensation is too high. According to the Trademark Law of China， if the actual losses are difficult to confirm， the compensation is half of th

16、e profit from infringing the trademark rights.The best way to confirm the losses is to calculate the losses caused by the infringement， according to Huang Wushuang， professor at the Intellectual Property Institute of the East China University of Political Science and Law. Huang is also research at t

17、he Intellectual Property Judicial Protection Research Center of the Supreme Peoples Court.“The losses not only include the decline or no growth in market share， but also include the reputational damage， added Wang.In view that Xinbailun Tradings behaviors of marketing products with the name of Xinba

18、ilun misled consumers， the influence can be eliminated through the corrective advertising.In America， the corrective advertising is often used to restore brand reputation and the compensation only accounts for 25% of the tort-feasors total advertising fees. In China， the court often ordered the tort-feasor to issue a public apology which has little help to restore t