Manolo Blahnik has prevailed in a decades-long legal battle over its name in China. Since 2000, the famed footwear brand has been engaged a trademark fight against Chinese businessman Fang Yuzhou, who successfully secured a registration for the “Manolo & Blahnik” trademark for use on footwear in China that year, benefitting from the fact that China issues trademark registrations on a first-to-file (as opposed to a first-to-use) basis, and thereby, standing to significantly limit the operations of the Manolo Blahnik brand in the Chinese market, despite years of existing operations in other markets and major marketing placement, such as in the HBO series, Sex and the City. The win for Blahnik, which comes by way of a June decision from the Supreme People’s Court of China that invalidates Yuzhou’s registration, paves the way for the 50-year-old brand to engage in a major expansion effort on the Chinese mainland, as well as in Taipei and Hong Kong.
Blahnik’s China-centric trademark fight – which has been rife with losses, including the trademark office’s determination the Blahnik failed to present evidence of sufficient sales in the Chinese market prior to 2000 – is hardly a novel one. For decades, well-known consumer-facing companies have suffered a similar fate. Upon building their brands in the West and amassing trademark rights in their names, logos, and other branding elements in markets where they were operating, they look to expand internationally, including in China, where they are met with a common-but-unfortunate reality: a native Chinese entity or individual has beaten them to filing and receiving trademark registrations for the same name as their brand, either in English or in the Chinese transliteration. This is precisely what some of the world’s most well-known brands – from Tesla and Pfizer to Apple, Hermès, Akris, and Supreme, among others – have grappled with.
China’s trademark system has long-garnered criticism among international rightsholders for this exact reason, for enabling a practice that is largely characterized as trademark-squatting. As Akin Gump attorneys William Leahy and Stephen Kho note, “The structure of China’s trademark system is ripe for abuse by squatters.” This is because China is “a first-to-file jurisdiction for trademark registration, [and] its system does not require evidence of prior use or ownership when filing, leaving registration of popular foreign marks open to third parties” that are not the otherwise rightful owners of such marks, but that are looking to piggyback on – and profit from – the goodwill associated with well-known brands. Moreover, the system has traditionally favored native entities due to their easy access to the China Trademark Office (“CTMO”), which exacerbated China’s laissez-faire attitude towards bad-faith trademark registrations.
Faced with mounting pressure from brand-owners and even from within the CTMO to better address the rampancy of trademark-squatting and bad faith filings, China’s trademark body moved to incorporate squatting-specific language in the national Trademark Law by way of amendments that went into effect this time last year. Among the provisions that came into force on November 1, 2019: a particularly closely-watched one that provides – in Article 4 – that “[a]ny bad faith trademark applications without intent to use shall be refused.” (This provision is bolstered by other additions to the national trademark law, as well as existing provisions in China’s General Principles of the Civil Law and Anti-Unfair Competition Law).
Since the amendments came into effect, the CTMO has, in fact, started to refuse trademark applications based on Article 4, according to Bird & Bird LLP attorney’s Hank Leung, Dawn Hui, and Ivy Dai, which suggests that the amendments “have improved the CTMO’s practice in examining bad faith applications.”
Famous Cases on the Trademark Front
In addition to amendments to trademark legislation, a growing number of legal battles are providing a blueprint for brands looking to claim rights in their names and other trademark assets in China. Among the most famous cases to date resulted in a win for Michael Jordan, who, following almost a decade of litigation, won a hard battle against Qiaodan Sports Co., Ltd. China. In a decision dated March 26, 2020, the Supreme People’s Court of China overturned the lower courts’ decisions and ruled in favor of the NBA legend in one of the invalidation proceedings over a trademark registration for “Qiaodan”– a commonly recognized phonetic translation for the name “Jordan” – along with a design that depicted a basketball player in midair attempting a layup, which Qiaodan Sports had held since 2007 for use in connection with its manufacturing, marketing, and sale of clothing.
In a separate case, the Shanghai Pudong People’s Court issued a decision in favor of New Balance in an unfair competition lawsuit against New Barlun Co Ltd., ordering the Chinese athletic company to pay the Boston, Massachusetts-based sportswear giant damages of RMB 10.8 million ($1.5 million at the time) in connection with its unauthorized use of the stylized letter “N” on its shoes. The PPC’s April 2020 decision – which brought an end to New Balance’s 16-year battle against the copycat brand that had enjoyed significant success by imitating New Balance’s stylized “N” logo – followed from years of losses for New Balance in the form of opposition and invalidation proceedings against the registration of the mark by New Barlun.
Taken together, this growing string of cases – the Manolo case, included – are consistent with larger trends being put forth by Chinese courts in recent years, which have seen them exhibit increasing willingness to protect non-native brand owners’ rights in China after exhibiting significant preference for native entities, and in some cases, to exercise their discretion and award damages above the statutory limits. Ultimately, these cases are part of a still-growing pool of litigation that will see Western brand owners successfully claiming rights in their trademarks in China from infringing parties and trademark squatters.
Reflecting on the outcome in the newest case, Manolo Blahnik, the brand’s eponymous founder and creative director, said: “We are truly humbled and grateful for the support we have received in China and internationally, both from within the fashion industry and beyond. This generous assistance has been a significant contributing factor to this successful result.”
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