Beginning in 2012, a native Chinese company began offering up sneakers that looked familiar. With their silhouettes that mirror a certain cult “dad” trainer to the appearance of the letter “N” on the side of the shoes, the shoes were dead-ringers for New Balance’s offerings, including, its 31-year old “574” sneaker. The similarities go beyond the shoes, themselves, though, and extend to the company’s name: New Bunren, which has a Chinese pronunciation that is “highly similar” to New Balance’s and when written using Chinese character is “identical” to the Chinese spelling of “New Balance.”
It would not take long before New Bunren and its lookalike wares caught the eye of New Balance, or more specifically, before they spawned a legal fight with New Balance that has stretched over years and continents. The Boston-based footwear brand first initiated the still-ongoing battle against New Bunren in Chinese court in 2014, accusing the aggressive Chinese counterfeiter of hijacking its registered name and “N” logo, and then filed suit against New Bunren’s American subsidiary three years later in court in the U.S.
Almost exactly two years after it filed suit against USA New Bunren International Co. in federal court in Delaware In November 2017, alleging that New Bunren had “adopted several confusingly similar marks” – from its name to a capitalized letter “N” logo, the court has sided with New Balance (in part), holding that New Bunren ran afoul of New Balance’s exclusive rights in its “N” logo regardless of whether the Chinese company actually sold any of the “N”-branded sneakers in the U.S.
Focusing exclusively on claims that New Balance made in connection with its “N” trademarks, Judge Maryellen Noreika of the U.S. District Court for the District of Delaware granted New Balance’s motion for summary judgment (and, thereby, ruling in favor of New Balance) on its claims of federal trademark infringement and dilution, and false designation of origin.
Judge Noreika was unpersuaded by New Bunren’s argument that because none of its allegedly infringing products were actually “shipped to or sold in any physical stores in the United States,” it could not be held liable for trademark infringement, dilution, or false designation of origin. To be exact, counsel for New Bunren argued that the 7-year old company company’s activities do not constitute “use in commerce,” which is required by the Lanham Act, the U.S. federal trademark law, in order for a finding of liability for the aforementioned trademark offenses.
image via complaint
In short: New Bunren argued that while its sneakers were “marketed via the www.new-bunren.com website,” it should be shielded from trademark liability because it did not actually transport or sell them in the U.S., which it cited as the legal standard for determining “use in commerce.”
In her December 4 decision, Judge Noreika took issue with the standard cited by New Bunren, stating that the requirement that goods/services bearing a trademark be “shipped to or sold” in the U.S. in order to constitute “use in commerce” is “the standard for a mark to qualify for protection or registration, not the standard for proving infringement.”
Instead, the standard for infringement is quite a bit lower, and met in this case based on the fact that while New Bunren may not have shipped or sold any sneakers in the U.S., and also did not include “any pricing information or purchasing instructions on [its] website,” New Bunren, nonetheless, “did provide a ‘contact us’ form, [and] … at one point had an Alabama phone number that consumers could call if they were interested in purchasing the products.” According to the judge, “This leaves open the possibility that its products could have been sold through the internet and directly shipped to a consumer,” and thus, meets the “in commerce” requirement for infringement.
Speaking specifically to the lack of pricing information on New Bunren’s website, the judge held that was not a controlling factor, as “there is no requirement that advertising or promotions contain pricing information and purchasing instructions [in order to amount to commercial speech], as demonstrated by billboards, print ads in fashion magazines, product placements in movies, and the sponsored wearing of items by celebrities and influencers.”
“All of those activities,” she stated, “are regarded as advertisements and promotions but do not necessarily contain pricing information and purchasing instructions.”
The judge further held that with such use in commerce in mind, paired with the similarities between New Balance’s “N” mark and New Bunren’s “N” mark, consumers are likely to confuse the two, and thus, granted summary judgment in favor of New Balance on its federal trademark infringement and false designation of origin claims.
She also sided with New Balance in terms of its trademark dilution claim, asserting that New Balance is sufficiently famous (as required for a claim of trademark dilution), as indicated by the “approximately $75 million [it spent] annually on global marketing expenditures” between 2012 and 2017, the “hundreds of millions of pairs of shoes, articles of apparel, and other merchandise bearing the ‘N’ marks” that it sold during that time, and the “more than $20 billion in revenue” it generated in that 5 year period.
As for New Balance’s state law claims, those will proceed to trial.
*The case is New Balance Athletics, Inc., USA New Bunren International Co. Limited LLC, 1:17-cv-01700-MN (D.Del).