In the midst of trademark battles in China, New Balance is policing its famous “N” and the source-identifying design of its 574 sneaker in the U.S., with the sneaker-maker filing suit against Michael Kors, arguing that the fashion brand “recently began using an N design on footwear that is virtually identical and confusingly similar to” its own mark, as well as the trade dress-protected design of its 574 sneakers. According to the complaint that it filed in a federal court in Massachusetts on Wednesday, New Balance claims that Kors’ “intentional adoption of a letter N on footwear is likely to cause confusion among consumers and/or suggest an affiliation, connection, or association [with] New Balance” when no such affiliation exists. 

Setting the stage in the newly-filed complaint, New Balance assets that it has “exclusively used the letter N as a trademark on footwear since the 1970s,” selling “hundreds of millions of pairs of shoes bearing N Marks worldwide, which represent many billions of dollars in sales.” Beyond the N trademark, alone, New Balance assets that it has made “long-standing and widespread use of the N Mark with saddle device, and the 574 trade dress,” the latter of which is the company’s “best-selling shoe worldwide, with sales of more than 7,000,000 pairs projected in 2021. It is one of the most popular athletic shoe designs sold by any manufacturer in the world.”

Against that background, New Balance alleges that Kors recently began making and selling lookalike sneakers, namely, the “Pippin” and “Olympia” models, which “use a prominent N design that is partially incorporated on the saddle.” (Per New Balance, a “saddle” is a layered cut piece located at the mid-foot that wraps around top and bottom of the laces to the other side.) Specifically addressing the Pippin shoe, New Balance claims that “consumer confusion is a near certainty because the Michael Kors N design appears in a virtually identical commercial context; namely, incorporated into the saddle of a shoe design that strongly evokes the New Balance 574 trade dress.”

Given its consistent and widespread use of – and the resulting fame of – its marks, New Balance argues that Kors’ adoption of similar designs is hardly a coincidence, and in fact, the New York-based brand “must have known of New Balance’s rights in the marks.”

To make matters worse, New Balance assets that “Michael Kors (the individual) is a well-known ‘fan’ of New Balance, which increases the potential for consumers to mistakenly believe that the Michael Kors products are licensed by or affiliated with New Balance,” which points to a Harper’s Bazaar interview in which Mr. Kors states that he has “a good 15 pairs of New Balance in black, and I don’t always wear black. In the summer I’ll go to this dusty putty color. That’s my summer shoe.”

Ultimately, New Balance argues that Kors’ “intentional adoption” of a letter N on lookalike footwear constitutes trademark infringement and a false designation of origin, as well as trademark dilution, as it is “likely to dilute the distinctive source identifying quality of the famous N marks.” As such, New Balance sets out claims of federal trademark infringement, trademark, dilution and unfair competition, as well as dilution under Massachusetts state law, and is seeking monetary damages, as well as injunctive relief to bar Kors from further infringing and diluting its marks.

Beyond that, New Balance has asked the court to issue an order “directing the destruction of: (i) all infringing products, including all recalled infringing products; (ii) any other footwear products that use a copy, reproduction, or colorable imitation of the N Marks and N Mark with Saddle Device in Defendant’s possession or control; (iii) all advertising materials related to the infringing products in Defendant’s possession, custody, or control, including on the Internet.” 

The case comes after New Balance nabbed a win early this year in a trademark case that is part of a larger and long-running legal battle that has pitted it against New Barlun, a Chinese sportswear company that has been trading on its name and various trademarks for more than 15 years. In a decision dated January 5, the Shanghai Huangpu District Court ordered New Barlun Co. Ltd and Shanghai Shiyi Trade Co. Ltd to pay damages of RMB 25 million ($3.85 million) to New Balance, in one of the largest judgments awarded to a trademark holder in the sportswear market in China to date. 

Siding with New Balance, the court found that New Barlun’s lookalike sneakers generated substantial revenues for the company, which is viewed as one of the “most prolific and aggressive copycat brands” in the Chinese sportswear space, and that such success was largely attributable to the fame and reputation of the New Balance brand and its “N” trademark in China. The court also revealed that the defendants had acted in bad faith when they continued to operate even after the court had issued an interim injunction order barring them from manufacturing and selling the infringing footwear for the duration of the case.

Source: The Fashion Law