China’s top court ruled that Hall-of-Fame basketball player and Charlotte Hornets owner Michael Jordan can have his name back.
The Supreme People’s Court on Thursday revoked the rights of local sportswear-maker Qiaodan Sports Co. to use Jordan’s last name written in Chinese characters, handing a partial victory in his four-year campaign to win legal protection for his name that helps sell gear such as Nike Inc. sneakers and clothing worldwide.
Jordan’s Chinese name is “well-recognized” in China and he should have the legal right to it, the Beijing-based court said in its verdict. Qiaodan Sports, which operates about 6,000 shops selling shoes and sportswear in China, will have to give up its trademark registrations of the Chinese version of Qiaodan, pronounced “Chee-ow-dahn,” the court said.
International companies such as Tesla Motors Inc. and Apple Inc. have faced legal challenges in the world's second-largest economy, where the law generally protects whichever company registers a trademark first. While Jordan's victory could help set a precedent for foreign companies seeking to protect their intellectual property rights, more legal action is needed for global brands to capture the upper hand in their fight against China's copycats.
“Perhaps if we see a few more decisions like this then it might seem that the tide is turning, but right now this seems like an anomaly,” said Matthew Dresden, a lawyer at Seattle-based Harris Moure, which produces the China Law Blog. “The vast majority of decisions are still in favor of the trademark squatters, because the way you get trademark rights in China is by filing a trademark application, not by being famous.”
Qiaodan Sports, a family-owned business based in southern Fujian province, had registered its trademark more than a decade ago. Jordan sued the company in 2012, arguing it had damaged his legal rights to his name and asking that Qiaodan Sports' trademark registrations be removed. Lower courts had ruled in favor of the Chinese company.
“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, who’s also Chief Executive Officer of Nike’s Brand Jordan Division, said in an e-mailed statement after the ruling. “Chinese consumers deserve to know that Qiaodan Sports and its products have no connection to me.”
The court ruled that the trademark for Jordan’s Chinese name should be returned to China’s State Administration for Industry and Commerce to be re-awarded. However, the court rejected Jordan's claim to the romanized, or pinyin, form of the name “Qiaodan,” saying in its judgment that this version may not be closely linked with the basketball player.
Qiaodan Sports “respects the verdict” of the court, and would fulfill the intellectual property protection of its brands in accordance with the law, the Chinese company said in a blog posting on its official Weibo account. The company had its origins in 1984 as Fujian Jinjiang Chendai Xibian's No. 2 Daily Necessities Factory.
In 2000, it went through a restructuring and adopted the Chinese characters for Qiaodan in its name, according to a prospectus filed in 2011 for a planned listing. Qiaodan Sports in 2010 also ran court-side billboards featuring the name and its logo during the 2009/2010 U.S. National Basketball Association's regular season games, according to its website.
Still, Jordan's victory “doesn’t deal a substantive blow on the trademark pirates as it didn’t announce any penalties for violations,” said Xiang Wang, lead partner for Orrick, Herrington & Sutcliffe’s China-focused intellectual property practice.
“It would be a real milestone for fighting against trademark pirates when penalties are added in the law,” as the current costs of violation in China are “too low,” Wang said in a telephone interview.
The cost to Qiaodan Sports of its legal fight with Jordan may need to await a further judgment from in a court in Shanghai, where the U.S. sportsman in 2012 filed a separate lawsuit against the company for the unauthorized use of his name. Jordan is seeking legal damages in the Shanghai lawsuit.
“I respect the Chinese legal system and look forward to the Shanghai Court’s ruling on the separate naming rights case,” Jordan said in the statement.
–With assistance from Scott Soshnick To contact Bloomberg News staff for this story: Rachel Chang in Shanghai at firstname.lastname@example.org, Alfred Cang in Singapore at email@example.com, Daniela Wei in Hong Kong at firstname.lastname@example.org. To contact the editors responsible for this story: K. Oanh Ha at email@example.com, Daryl Loo, Sam Nagarajan. The Observer contributed.