On March 28, the well-known international sports brand NIKE sued a Chinese shoe manufacturer for patent infringement at the court. NIKE claimed that the Chinese footwear manufacturer Bestwinn from Fujian had infringed on at least 20 design patents by producing, using, selling and exporting sneakers identical to those holding NIKE Patent in style and appearance to the United States.

A lawsuit filed by NIKE to the U.S. Federal District Court in Nevada revealed that although NIKE had warned Xiamen Chengda of alleged patent infringement on several occasions, but the latter continued to produce and sell accused infringing shoes, including popular NIKE Flyknit series. From 2013, NIKE commenced sending e-mails to Xiamen Chengda in an attempt to request it to cease the production of infringing sneakers and even more it dispatched representatives to meet person in charge from Chengda at an International Shoe Expo. and kept him informed of alleged patent infringement. Over the past three years, it was pity that such kind of communication has not achieved the desired effect. Currently, NIKE claims on indemnities and petitions for a trial as well as respectfully requests the court to ban Chengda from continuously producing and selling infringing sneakers.

It is learned that Chengda was established in 2006, a company with a staff of 60, which specializes in the import and export, design, R&D, production and sales of various shoes such as casual footwear, sneakers, women's shoes and children's shoes and penetrates the market in Southeast Asia, South America, West Europe, North Europe and Central United States. As its official website shows, the annual revenues of Chengda have reached CNY 50 million to 100 million and the products for export account for 91% -100% of the total. It is worth mentioning that the U.S. large retailer Wal-Mart is one of its customers.

By taking stock of overall situation, NIKE viewed Chengda as a threat to their patents and would bring an action against Chengda to defend its rights despite the fact that there are numerous infringing enterprises.

In early this year, NIKE instituted a patent lawsuit against U.S. footwear brand SKECHERS, claiming that some of its products had infringed eight design patents newly granted to NIKE over the past two years. In China, counterfeit NIKE floods the domestic market. In January 2016, the customs in Xiamen seized 14,800 pairs of USD 150,000 worth of counterfeit NIKE, Adidas and Puma causal shoes.

(Source: Beijing Business Today)

【Comments】

Xintong Liu: From 2005 to 2014, NIKE applied for 792 footwear patents in China with invention patents accounting for 38% of the total while there has been no patent application filed by the defendant Bestwinn Company (Xiamen Chengda) announced yet so far (including design patent). From the perspective of patent tactics, Bestwinn has little chance to win this lawsuit if NIKE obtains sufficient evidence.

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Diagram for Applications for NIKE Patent from 2005 to 2014
实用新型:Utility Patent
发明专利:Invention Patent
外观设计专利:Design Patent
发明已授权:Invention Patent Granted
专利申请总数量: Number of Patent Applications
发明专利授权率:Invention Patent Granting Rate

Recently, Chinese government called for rejuvenating our country by protecting intellectual property rights as well as cracking down and increasing penalties on infringing products. Despite the fact that there are numerous infringing enterprises, their future is doomed to be bleak due to an increase in infringing costs. We can learn from the case of Bestwinn that it is inevitable for infringing enterprises to build up business by way of protection of intellectual property rights and economic transition. We hope that infringing enterprises can learn from giants like NIKE maintaining dominance when sustaining a development...

When it comes to infringing enterprises, we need to mention several established domestic sporting goods companies. As an established sporting goods company earlier in China, "LI-LING" applied for a total of 114 footwear patents from 2005 to 2014,of which invention patents accounted for only 8% of the total. Besides, "ANTA", another established sporting goods company in China, applied for 453 footwear patents in total from 2005 to 2014, of which invention patents took up only 6% of the total. We can learn from the number of patent applications, "ANTA" outperformed "LI-LING". However, in comparison with NIKE, both of them undoubtedly still have a long way to go.

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Diagram for Applications for LI-NING Patent from 2005 to 2014
实用新型:Utility Patent
发明专利:Invention Patent
外观设计专利:Design Patent
发明已授权:Invention Patent Granted
专利申请总数量: Number of Patent Applications
发明专利授权率:Invention Patent Granting Rate

Click here to view image.

Diagram for Applications for ANTA Patent from 2005 to 2014
实用新型:Utility Patent
发明专利:Invention Patent
外观设计专利:Design Patent
发明已授权:Invention Patent Granted
专利申请总数量: Number of Patent Applications
发明专利授权率:Invention Patent Granting Rate

In recent years, NIKE sustained a development while it was hard for domestic sporting goods companies to survive fierce competition. I presume that this phenomenon emerged due to rising consumption. In our daily life, Chinese people increasingly care for life quality and thus they tend to choose functional and comfortable shoes. Renowned as sporting goods companies specializing in sneakers, NIKE holds invention patents dozens of times as many as those obtained by "Lining" and "ANTA" respectively. From the ratio of invention patents to patents applied by NIKE, we can learn that its huge investment in technology will improve the functions and comfort of sneaker products and this might be underlying causes for NIKE outperforming domestic sneaker brands.

In the future, domestic sporting goods companies may be placed in worse predicament for the reason that giants like NIKE manipulate cut-edging technologies and domestic product development are inhibited by patent tactics employed by those giants. Therefore, it is vital for domestic companies to R&D technologies and employ patent tactics to capture their market in China.

It is noted that the rate of granting invention patents of NIKE has reached 67.8% while that of "LI-LING" and "ANTA" is merely 55.6% and 44.4% respectively. The gap results from patent solutions and preparation for patent applications.

From the infringement cases of Bestwinn and other domestic sporting goods companies, we can learn that it is urgent for them to defend intellectual property rights and employ patent tactics to build up business.

Note: The above data source from Baiten website.