In today’s highly competitive market environment, the protection of intellectual property rights has become increasingly important. Recently, the Jiangsu High People’s Court issued a final judgment in a dispute concerning infringement of the “New Balance” trademark and unfair competition. The ruling not only safeguarded the legitimate rights of the trademark owner but also provided a model and valuable insights for IP protection. This article offers a professional analysis from the perspective of intellectual property law.

I. Case Background and Key Holdings

This case involves a dispute between the appellants—Jiangxi Qinpao Trading Co., Ltd. (formerly Jiangxi New Balance Leading Sportswear Co., Ltd.) and an individual, Mr. Zeng—and the appellees—New Balance Athletics Inc. and New Balance Trading (China) Co., Ltd. The appellants used marks and corporate names similar to “New Balance” without authorization, causing consumer confusion and mistaken purchases. Such conduct seriously harmed the rights and interests of New Balance and disrupted the fair market order.

In its final judgment, the Jiangsu High People’s Court held that although Jiangxi New Balance Leading Company registered trademarks consisting of several edged five-pointed stars and a central "N" logo, as well as the "N" trademark, it did not use the trademarks correctly in actual use. Instead, it used different shades of light and dark to present the five-pointed star pattern and the letter "N," diluting the five-pointed star logo while highlighting the "N" logo. Furthermore, the slanted, capitalized, and bold "N" letter actually used differed significantly from the "N" trademark. Jiangxi New Balance Leading Company's use of this method of changing the composition and colors altered the distinctive features of the aforementioned registered trademarks, making them highly similar to the overall image of the registered trademark in question. Through New Balance's continuous use and extensive promotion, the "New Balance" trade name has established a long-term and stable correspondence with its trademarks and "New Balance" athletic shoe products, and has gained considerable influence. As a competitor in the same industry, Jiangxi New Balance Leading Company should have been aware of the brand recognition of "New Balance" in China. However, it still registered and used the same company name, "Jiangxi New Balance Leading Sporting Goods Co., Ltd.," which has the same word composition and pronunciation as "New Balance." Subjectively, it had the intention to capitalize on the brand recognition of "New Balance." Objectively, the existence of both New Balance Company and Jiangxi New Balance Leading Company is likely to cause the relevant public to confuse the products offered by the two companies or mistakenly believe that the two companies are related, thereby harming the interests of consumers, violating legal regulations and generally accepted business ethics in market transactions, and constituting unfair competition.

Ultimately, the court determined that the appellants’ actions constituted trademark infringement and unfair competition. The court ordered them to cease the infringing acts and compensate the right holders. The ruling reflects the judiciary’s firm stance on IP protection and provides important guidance for similar disputes.

II. Professional Intellectual Property Analysis

1. Determination of Trademark Infringement

According to Article 57 of the Trademark Law of the People’s Republic of China, using a trademark identical or similar to a registered trademark on identical or similar goods without the registrant’s permission, in a manner likely to cause confusion, constitutes infringement.

In this case, the appellants used marks similar to “New Balance” on sports shoes they manufactured without authorization. Evidence such as notarized purchase records and sales data demonstrated that consumers were misled during the purchasing process. The court found that the conduct constituted trademark infringement, consistent with the statutory provisions and demonstrating zero tolerance toward trademark infringement.

2. Determination of Unfair Competition

Besides trademark infringement, the appellants also engaged in acts of unfair competition. Article 6 of the Anti-Unfair Competition Law prohibits business operators from carrying out confusing acts that mislead the public into believing their goods or services are associated with another party.

The appellants used a company name containing the Chinese characters for “New Balance,” which clearly constituted an act of confusion. The court found that their conduct damaged the commercial reputation and goodwill of the rightful trademark owners and undermined fair market competition. The defendants were ordered to cease using the misleading company name and bear corresponding liability.

3. Determining the Amount of Damages

Determining damages is often difficult in IP infringement cases. In this case, both trial courts applied punitive damages, considering factors such as the infringer’s profits, the rights holder’s reasonable expenses, and the severity of the infringement.

The court relied on evidence related to sales volume, profit rates, and the proportion of infringing goods and ultimately determined the damages amount using punitive principles. This approach increases the cost of infringement and enhances relief for rights holders.

4. Application of Punitive Damages

Punitive damages are an important measure in IP protection. According to the Supreme People’s Court’s Interpretation on the Application of Punitive Damages in Civil IP Cases, punitive damages may apply when infringement is intentional and serious.

The court held that the appellants’ infringement was intentional and severe; therefore, punitive damages were appropriate. This not only increases the consequences of infringement but also serves as a deterrent to potential infringers.

III. Lessons and Future Outlook

This judgment protects the rights holder while offering valuable lessons:

• Rights holders should strengthen IP layout and protection awareness by filing trademark and patent applications in a timely manner. 

• When infringement occurs, rights holders should take legal action promptly, including sending cease-and-desist letters and initiating lawsuits. 

• Courts should continue applying strict protection principles and intensify penalties for infringement.

Looking ahead, as IP awareness increases and legislation continues to improve, the environment for IP protection will become even stronger. More enterprises are expected to respect and protect intellectual property, contributing to a fair and orderly market environment.