Since Boston-based shoemaker New Balance introduced their shoes to customers in China, they've been struggling to fight off local copycats. Three Chinese shoemakers who have been manufacturing counterfeits with the brand's signature tilted "N" logo have been protected under China's trademark law -- until now.
Those three shoemakers owe New Balance $1.5 million in damages and legal costs -- a win lawyers are calling the largest trademark infringement award ever granted to a foreign business in China.
Professor Leah Chan Grinvald, an international intellectual property law professor at Suffolk Law School in Boston, says that while this case may be perceived as precedent-setting, Chinese courts don't see it that way.
"One of the unique things about Chinese courts that is different from U.S. courts, is that they don't follow precedent. So when we say precedent-setting, it is really up to other courts in China to decide whether or not they actually want to follow that precedent."
China is home to a large percentage of U.S. manufacturing, and its history of intellectual property theft there is a long one. But Grinvald says it's a little more nuanced than a pure counterfeit offense.
"Copycats are a little bit different than counterfeit, in that they try to evoke the same product and properly evoke the logo, but they're not using the actual logo," says Grinvald.
That's the case with three defendants in this lawsuit, one of which is named "New Boom"; it sounds similar to New Balance but it wouldn't be identified as counterfeit.
So how was New Balance able to pull off a victory? Grinvald says they took a strategic approach: choosing China's broader anti-unfair competition law instead of the narrow trademark law. Trademark law works a little differently in China. Unlike in the U.S., Grinvald explains, rights for a trademark are granted to whomever files first.
Will other companies follow in New Balance's footsteps? Maybe. But Grinvald says they'll be careful when considering whether it's worth it.
"The one thing that other American and other foreign companies need to take into account is the cost that this kind of lawsuit takes" she says.
New Balance invested a lot of time and money into this lawsuit -- time that could have been invested in their business.
WGBH News did not receive a response seeking comment from New Balance's senior counsel for intellectual property
Click on the audio link above to listen to the entire conversation between WGBH's Morning Edition Host Joe Mathieu and Leah Chan Grinvald, professor at Suffolk Law School in Boston.
