Chinese shoemakers ordered to pay New Balance $1.5 million

Suzhou Intermediate People’s Court said that the three companies, who make shoes under the brand New Boom "seized market share from New Balance" and "drastically damaged" the business reputation of the US company, the New York Times said, citing a copy of the decision that was sent to the newspaper by New Balance.

The court said the three defendants relied on the "malice of free-riding" and their actions led to "confusion by a large number of consumers", the New York Times reported.

Sportswear multinational Nike won a trade mark case in China in 2004, when a Chinese court ruled that  trade mark protection in China covers not only the marketing of goods under the Nike brand name, but also their manufacture.

The decision was part of a case brought by Nike against Cidesport, a company which owns rights to the use of the word 'Nike' in Spain.

The 2004 dispute arose from the fact that Cidesport manufactured its own Nike branded goods in China, where the US giant has registered its Nike mark.

Trademark law expert Alexander Bayer of Pinsent Masons, the law firm behind Out-Law.com, said: "The ruling is a landmark decision that will help international companies to gain confidence in the Chinese legal system. To my knowledge this is the highest amount that has been paid in a Chinese trade mark dispute. Recent developments in Chinese trade mark case law show that having trade mark protection in China pays off, not only for Chinese companies. This was very different 15 years ago. Companies, independent of their origin, are now able to enforce their trade mark rights in China so that it is no longer attractive for infringers to continue with the infringement under a different name."