Imagine the sheer consternation of company executives from the global athletic shoe manufacturer New Balance a couple years ago when they were slapped with a $16 million fine by a Chinese court in a trademark infringement complaint the company had filed -- against a business rival that had clearly misappropriated the company's long-existing and instantly recognizable "N" shoe logo.
That upside-down world -- it's our mark, but you can seemingly steal it, make money and actually pad profits by being awarded damages when we complain about misappropriation -- has long plagued American companies operating in China.
Chinese law holds that trademark protection goes to the party that first applies for it, even if another company has been using a mark, slogan or logo for decades.
Such protection has clearly stymied and frustrated American companies with foreign clout, some of which have retreated from the Chinese market as a result.
Not New Balance, which the New York Times recently notes "has fought against dozens of counterfeit manufacturers" while competing in the Chinese market over many years.
Notably, it just won what is arguably a fundamentally meaningful victory, with a Chinese court mandating payment of $1.5 million from three domestic shoe manufacturers that have been fueling product sales through the affixing of the aforementioned "N" logo on their footwear.
That has highly confused Chinese consumers, stated the court last week, and "drastically damaged" New Balance in the process.
Although the award is comparatively tiny by U.S. standards, it is widely perceived as being a potential game changer in China.
"I don't think this is a one-off," stated one case commentator in the wake of the ruling, who joins other industry voices in an assessment that China might now be taking some small but significant steps to enhance the credibility of the country's intellectual property realm globally.