Top court upholds Jordan’s IPR over sportswear firm

A shopper walks past a Qiaodan Sportswear retail shop in Beijing on Thursday. Photo: AP

China's top court on Thursday ruled that three trademarks registered by Fujian-based Qiaodan Sportswear have violated basketball legend Michael Jordan's rights.

The Supreme People's Court (SPC) on Thursday overturned two decisions made by Beijing courts and asked the State Administration for Industry and Commerce to issue a ruling on the disputed trademarks.

Jordan is known as "Qiaodan" in Chinese.

"I am happy that the Supreme People's Court has recognized the right to protect my name through its ruling in the trademark cases," Jordan said in an e-mailed statement cited by Bloomberg. "Chinese consumers deserve to know that Qiaodan Sports and its products have no connection to me."

Qiaodan Sportswear, however, said the ruling would not interfere with the company's operations. Of the 68 disputed trademarks the company has filed, the SPC has ruled in favor of the firm in 50 of them.

The company told sports.sina.com.cn that the three trademarks are defensive trademarks and therefore would not stop the company from using the Chinese characters "Qiaodan" in its products or advertisements.

A defensive trademark is applied by a well-known trademark owner for goods or services that are not intended to be used, to prevent other traders from using it.

The company also said it plans to go public, the 21st Century Business Herald reported.

Rare victory

Although Jordan's court victory has limited impact, the ruling is rare for foreign brands in China, where companies, including Apple and New Balance, have often come out on the losing end of trademark disputes.

"Because a trademark is an integral part of intellectual rights, the SPC decision will serve as a good example, proving that China will protect every company's or individual's intellectual property rights (IPR) in accordance with Chinese laws," Xu Xinming, a Beijing-based lawyer specializing in IPR told the Global Times.

Jordan accused Qiaodan Sportswear of using his name without authorization, as he believes "Qiaodan" to be a Chinese transliteration of "Jordan," but the Trademark Appraisal Committee rejected Jordan's 2012 appeal in 2014 to cancel the company's trademarks.

After the Beijing No.1 Intermediate People's Court ruled against him in 2014, he appealed to the Beijing High People's Court, which also rejected his claim in July 2015.

Last month, China released a State-level guideline on providing better protection for property rights, stressing the need to intensify IPR protection.

The guideline also vowed to raise the amount of compensation for IPR violations, creating a punitive damages system to protect IPRs, including copyright and patent rights.

"Before the punitive damages system, the amount of compensation used to be very low under the principle of compensatory damages, meaning, the punishment was inadequate in curbing infringements," Zhao Zhanling, a legal counsel with the Beijing-based Internet Society of China, told the Global Times.

"In many cases, the compensation could not even cover the plaintiff's legal fees, which encouraged violations," Xu noted.

Identifying fakes

An information system will be established to identify counterfeit products, which will tarnish the credit record of violators, and their penalties will be made public, according to the guideline.

"The credit records will forever follow the violators, effectively serving as a warning to others that the punishment is not limited to one-time compensation, but will affect you for a long time," Xu said.

The guideline also provides for a bigger role for IPR courts in China, unifying rulings on offenders, be they civil, criminal or administrative cases.

China's revised Trademark Law, set to strengthen intellectual property protection, took effect in May 2014, and an amendment passed by the country's top legislature in August 2014 raised the compensation ceiling for trademark infringement to 3 million yuan ($0.44 million), six times the previous limit.

The Beijing Administration for Industry and Commerce on Wednesday revealed 10 major cases of IPR infringement and counterfeit goods to the public. Among the cases, two companies were busted for illegally using Olympic symbols, and the violators were fined as much as 3.72 million yuan.

According to Wang Shan, the head of the agency's trademark department, Beijing has ruled on 1,819 IPR infringement cases and counterfeit goods, 41 percent more than last year.