The Background

New Balance, the iconic American athletic footwear and apparel company, entered the Chinese market in the 1990s. However, the company did not register its Chinese trademark “Xīn Bǎilún” (新百伦) in a timely manner. A Chinese entrepreneur named Zhou Lelun registered “新百伦” for his own company, “New Barlun,” and began producing shoes under that name. By the time New Balance sought to enforce its rights, Zhou’s company had already built a significant business using the mark.

The Legal Battle

In 2013, New Balance sued Zhou’s company for trademark infringement. The case went through multiple appeals and finally reached the Guangzhou Intermediate People’s Court. In a landmark 2017 ruling, the court dismissed New Balance’s claims and instead ordered the US company to pay ¥35 million RMB (approximately $5.88 million USD) in damages to the Chinese defendant for “trademark squatting and unfair competition.” The court found that New Balance had used the Chinese name “新百伦” in commerce and marketing without first obtaining a valid registration, thereby infringing on the prior rights of the Chinese registrant.

Business Impact

The financial penalty was significant, but the strategic damage was far greater. New Balance was forced to rebrand its entire Chinese product line and marketing materials to avoid further liability. The company lost years of brand equity built around the “新百伦” name. Competitors seized the opportunity to capture market share. New Balance’s market share in China — which had been growing at 15–20% annually — stalled for three consecutive years following the ruling.

Pinyin Reference: First-to-file = xiān dào xiān dé, 先到先得; Trademark squatting = biāo zhì zhàn jù, 标志占据.

The Background

Few brands command more global equity than Apple. Yet in 2010, when Apple launched the iPad in China, it discovered that the trademark “iPad” (as well as its Chinese transliteration píng guǒ, 苹果 related marks) had been registered in China by a Taiwanese company called Proview Technology back in 2001. Proview had registered the mark for computer products and had used it on its own tablet devices — albeit with minimal commercial success.

The Legal Battle

Apple attempted to negotiate a purchase of the trademark, but when talks stalled, the company filed a lawsuit in the Shenzhen Intermediate People’s Court in 2011, seeking a declaration that it owned the iPad mark in China. The court ruled against Apple in December 2011, stating that Proview was the lawful registrant. Apple appealed, but the Guangdong Higher People’s Court upheld the decision in early 2012. Facing the prospect of being barred from selling the iPad in China — a market that was already generating over $5 billion in annual revenue for the company — Apple chose to settle.

The Outcome

In July 2012, Apple agreed to pay Proview $60 million USD to acquire the global rights to the iPad trademark in China. The settlement was widely reported as a “massive premium” over the original registration cost of approximately $15,000 that Proview had paid. Apple’s own legal costs were estimated at an additional $10–15 million.

Executive Takeaway: Even the world’s most sophisticated IP litigator cannot overturn China’s first-to-file system through courtroom arguments alone. The most cost-effective strategy is registration before market entry. Apple’s $60 million settlement was a bargain compared to the alternative — but it was a completely avoidable cost.

Pinyin Reference: Trademark registration = shāng biāo zhù cè, 商标注册; Priority right = yōu xiān quán, 优先权.

The Background

Starbucks entered the Chinese market in 1999 when it opened its first store in Beijing’s China World Trade Center. But unlike New Balance and Apple, Starbucks adopted a proactive and systematic trademark strategy from day one. The company registered its core brand name “Xīngbākè” (星巴克) — a creative transliteration that sounds both close to “Starbucks” and conveys a meaning of “star” and “buck” — across 45 trademark classes in China before even opening its first store.

The Legal Battle

In 2003, Starbucks discovered that a Chinese company named “Shanghai Xingbake Coffee” was using the “Xīngbākè” (星巴克) brand and a similar green mermaid logo. Starbucks filed a lawsuit in the Shanghai No. 2 Intermediate People’s Court. The court quickly ruled in Starbucks’ favor, finding that the defendant had intentionally copied the well-known marks of Starbucks. The court ordered the infringer to cease all use of the marks, change its corporate name, and pay damages.

The Strategic Advantage

Because Starbucks had registered the mark before any Chinese entity could register it first, the legal framework protected them immediately. The company did not need to prove “prior use” or “brand reputation” — it simply needed to show its registration certificate. This is the crucial difference: under China’s first-to-file system, a registration certificate is prima facie evidence of trademark ownership.

The result? Starbucks now operates over 6,000 stores across 200+ cities in China, making it the company’s second-largest market globally after the United States. Its trademark portfolio is considered one of the most robust of any foreign brand in China. When McDonald’s, KFC, and other competitors have faced trademark disputes in China, Starbucks has remained virtually untouched — a direct result of its registration-first strategy.

Executive Takeaway: Starbucks’ approach demonstrates that the first-to-file system, while risky for the unprepared, can become a competitive moat for companies that play by its rules. Registration is not a one-time event but an ongoing strategic process.

Pinyin Reference: Registered trademark = zhù cè shāng biāo, 注册商标; Well-known mark = zh