Introduction
The US basketball legend Michael Jordan won an important case in Shanghai at the end of December 2020. The court judged that a Chinese sports and shoe manufacturer who has been using Jordan's name as a trademark, was acting without permission and with the intention of misleading the consumer. However, the court did not revoke the decision that the phonetic English spelling of the Chinese translation of the name Jordan can be used. The Chinese company must formally apologize, which is something unique in the Chinese legal history.
The opponents
The special thing about this case is that the main opponent, the Qiaodan Sports Co., Ltd. (乔丹体育股份有限公司), is not a small company which violates the rights of a foreign company like an usual trademark squatter, but a large Chinese company. Qiaodan Sports is a Chinese sportswear company based in Fujian, founded in 2000 and operating nearly 6,000 stores nationwide. The company has registered around 200 trademarks related to Jordan, 12 of which were recently filed. Including Jordan’s name in Chinese, the names of his sons Jeffrey and Marcus, the number 23 and a very easily recognizable "Jump man" which is very similar to the international trademark of Michael Jordan. Jordan has filed approximately 80 lawsuits against the company since 2012. By 2010, the company had a turnover of over $ 450,000,000 and operated its business across the whole country. In 2011, an IPO on the Shanghai Stock Exchange was sought. However, these efforts failed, probably also because of the lawsuits that Michael Jordan had brought against the company in the same year. Another attempt in 2020 also failed, the IPO was suspended.
The co-defendant was the Bairen Trading Company, which has sold the products of Qiaodan Sports Co., Ltd.. The court found that Bairen Trading company, which bought the products through legal channels, was not at fault, but decided that it should not sell products with such copyright infringement in the future.
Background
Qiaodan is the Chinese transliteration of Jordan and is recognized in China as the name that stands for Michael Jordan. The company has used this brand in major marketing campaigns including advertising on China Central TV and while broadcasting NBA games in China.
In 2012, Michael Jordan began filing nullity suits against 78 of the company's trademarks. He argued that the brands violated his naming rights. However, there was a considerable period between the registrations of Qiaodan Sports and the initiation of action by Michael Jordan. For example, Qiaodan Sports had registered the trademark No. 1186599, which contains the words 乔丹and Qiaodan along with other graphics, back in 1998, which is 15 years before Michael Jordan first acted against Qiaodan Sports.
During his fight against Qiaodan Sports, Michael Jordan failed several times. He lost cases for example at the Beijing Supreme Court, where it was found that Michael Jordan did not provide enough evidence to show an exclusive link between 乔丹 and himself.
It took 4 years before the Supreme People's Court of China (SPC) first ruled in favour of Michael Jordan. In 2016, the SPC approved retrial only in a few cases, but it was a huge step and resulted in Michael Jordan finally taking a victory.
In his first SPC win, Michael Jordan successfully argued that he had the naming rights over the Chinese equivalent of his name 乔丹. Qiaodan Sports protested by claiming that Michael Jordan did not have an exclusive right to the name 乔丹 because it had its own meaning in Chinese and was also the translation of a general English surname. But the SPC believed that Michael Jordan was popular and influential in China, and when the public saw 乔丹 they thought of the basketball star. In other words, while there was no exclusive connection, there was an established connection between Michael Jordan and 乔丹. The court also found that Qiaodan Sports knew the fame and prominence of Michael Jordan as 乔丹and still registered his trademark. Given this existing connection, it is easy for the consumer to believe that Qiaodan Sports' goods could be associated with Michael Jordan and that Qiaodan Sports and Michael Jordan were related. The SPC also found that Qiaodan Sports maliciously damaged Michael Jordan's naming rights.
Legal consideration
Since the case was first filed by Michael Jordan on October 31, 2012, the case has been reviewed under the old 2001 Trademark Law. Article 31 has been changed, as well as Article 32 of the Trademark Law (in 2013 and 2019).
Michael Jordan has prevailed regarding his naming rights according to Article 31 of the Trademark Law. According to Article 99 of the General Principles of Civil Law and Article 2 of the Tort Liability Act of the People's Republic of China, natural persons enjoy naming rights. If a trademark is registered with the name of another person who has a naming right and it is likely that the public concerned falsely believes that the goods or services marked with the trademark have a specific connection to the natural person, e.g., the approval, Permission, etc., registering the trademark is considered a violation of another person's naming rights, which violates the provisions of Article 31 of the 2001 Chinese Trademark Law.
Qiaodan Sports was aware of the long-term and widespread popularity of the Michael Jordan name in China yet applied for the “乔丹” (Qiaodan) to be registered as a trademark. This registration would easily lead to the public concerned wrongly associating the goods marked with the controversial mark with Michael Jordan. Therefore, the registration of the controversial trademark violated Article 31 of the 2001 Chinese Trademark Law.
However, Jordan also has alleged a violation of Art. 10.1.8 and 41.1, which prohibit the registration of trademarks that are considered immoral or obtained through fraud or improper means. However, the SPC found that Michael Jordan was unable to prove this to a sufficient degree.
"Bad faith" was also excluded from the judgment by the SPC.
While Michael Jordan managed to regain his naming rights over "乔丹", the SPC eventually took the view that he did not have the same rights over "Qiaodan" (the Romanized / Pinyin version of 乔丹) and that "Qiaodan" is not Michael Jordan’s actual name. Before it was registered by Qiaodan Sports, the name had not been considered a famous brand that belonged to him. The court's reasoning was that the phonetic "Qiaodan" could correspond to many different Chinese characters in addition to 乔丹 and therefore there was no exclusive relationship between Michael Jordan's Chinese name "乔丹" and "Qiaodan".
The Shanghai No.2 Intermediate People's Court ruled in the first instance that Qiaodan Sports should pay the plaintiff 300,000 RMB for the emotional stress he suffered and an additional 50,000 RMB for the costs incurred during the litigation. Jordan had not made any claims for economic damages in connection with the case. Other claims of the plaintiff were denied by the court.
However, Qiaodan Sports must stop using the Chinese characters of “Qiaodan” in its company name and product brands, and publicly apologize in print and online to indicate that it has no connection with the basketball player himself. It must also take "reasonable steps" to indicate and clarify that its older brands have no real association with the NBA star.
The court found that by previously labelling Jordan's former jersey number "23" and even the Chinese translation of the names of his two sons, the company had made an "obvious attempt to mislead consumers" sufficient to determine that it was "The intention to cause or allow confusion in the public through its actions".
This unique and therefore reportable arrangement is a concession to the fact that under Chinese Trademark Law it cannot be ordered that the company does not have to completely give up the use of the Jordan name. Chinese Trademark Law provides that there is a five-year window in which registered trademarks can be contested. Many of Qiaodan's brands associated with Michael Jordan were already more than five years old at the time of the lawsuit.
Consequences for foreign trademark owners
Register trademarks in Chinese language. Registering your Latin trademarks does not automatically give you protection from the Chinese equivalent. Also, most of the people in China do not speak English. Then register that Chinese trademark ASAP to stop others to do so.
Act against maliciously registered trademarks in a timely manner, within 5 years. Once a trademark has been registered for 5 years it becomes much more difficult to have it deleted.
Please do not hesitate to contact us if you have any further questions. We look forward to hearing from you.