A Compromise between Michael Jordan and Qiaodan Sports?

Reportedly (Note this report is in Chinese), Michael Jordan, the star sportsman of NBA, recently made a statement that Qiaodan Sports Co., Ltd. (“Qiaodan Sports”) is suspected of infringement on his right of name, and he had initiated the legal proceeding in the People’s Court of China. And by the late news, the Shanghai Second Intermediate People’s Court has accepted this case. It is reported (Note this report is in Chinese) that the Qiaodan Sports has been approved by the Issuance Examination Committee of Shanghai Stock Exchange (SSE) to issue 11.25 million shares collecting RMB 1.06 billion, which would be issued publicly upon the future approval of China Securities Regulatory Commission (CSRC). (the image above is the trademark information retrieved from the trademark office of PRC)

According to the CSRC’s supervision regulations on listing, Qiaodan Sports will face difficulties in listing due to major intellectual property litigation it encounters. Then a question is arisen that whether Qiaodan Sports would compromise with Michael Jordan in order to defuse the crisis. This article will analyze the possibility as follows.

Firstly, what means a compromise? Logically, there are three possible results of the case: a) Michael Jordan authorizes Qiaodan Sports to use “Qiaodan”Brand; b) Michael Jordan gives up “Qiaodan”Brand; c) Qiaodan Sports continues using “Qiaodan” Brand without Michael Jordan’s authorization, of which, the latter two shall be subject to the sentence made by the People’s court, while only the first one could be a compromise for a concession made by the parties. Actually, it’s not likely to get the compromise as estimated by us.

I. Qiaodan Sports took advantage in previous “legal battle”

Due to the previous advantage in the past “legal battle”, it’s hard to say Qiaodan Sports will pay for the franchise from Michael Jordan. As released ( Note this article is in Chinese) by the spokesman of Qiaodan Sports, the Nike International Ltd. ( “ Nike “ ), who has long term cooperation with Michael Jordan, has filed objections and review application to eight trademarks applied by Qiaodan Sports during the period from 2002 to 2007, which were all finally rejected. And Qiaodan accompanied with its image were respectively established as the well-known trademark in 2005 and 2009 by the State Administration of Industry and Commerce. Meanwhile, according to the Trademark Law of People’s Republic of China (“Trademark Law”), the right owner shall claim for cancellation within 5 years if its trademark were squatted by others. In fact, the Qiaodan Sports has been granted the trademark registration in Class 25 (clothing, footwear, etc.) in January 2007, and on the other hand, the lawsuit filed by Michael Jordan was during February to March, which actually exceeds the said term of 5 years.

II. Michael Jordan is probably subject to the contracts with Nike

Even if Qiaodan Sports agrees to take the costive offer made by Michael Jordan for the franchise, the possibility of the franchise is still little. First, to franchise those who infringe one’s name right is obviously unpleasant. Not to speak of the long term cooperation between Michael Jordan and Nike, who and its purchased brand Converse both have tried to stop Qiaodan’s registration. And that explains their value on the brands of Jordan and also its Chinese translation. Therefore, Michael Jordan is possibly restricted by the contracts with Nike if he wants to license Qiaodan Sports, the competitor of Nike.

III. There’ re also chances for win to Michael Jordan

Although Michael Jordan’s application for cancellation is beyond the term of 5 years specified in Trademark Law as mentioned above, chances for win in the lawsuit are remained to Michael Jordan, and here’s the opinion of our colleague, Mr. Si Weijiang (Note this article is in Chinese), that as per the Article 1 of the Supreme People’s Court’s Reply to Several Questions about Trial of Case on Registered Trademark and Names of Enterprises Conflicting with First Rights, any lawsuits filed by the plaintiff for the copyright, patent of design or enterprise name infringement by the word, graphic or other elements used in the defendant’s registered trademark in accordance with the Article 108 of the Civil Procedure Law of People’s Republic Law shall be accepted by the People’s Court. Hence, if Michael Jordan sues based on such Article, it can be directly accepted by the People’s Court.

Accordingly, if the People’s Court supports Michael Jordan’s claim that the “乔丹QIAODAN” trademark and relevant graphic trademark used by Qiaodan Sports infringe Michael Jordan’s right of name, then the relevant registered trademarks will be cancelled. On the other hand, it is uncertain whether Michael Jordan has sued against the trade name of Qiaodan Sports infringes his right of name. If the Trade Name is constituted only by “QIAODAN” but without the graphic of a person playing basketball, it is almost impossible to be determined infringement, however it still may be affirmed as infringement as for the relevant trademarks used by Qiaodan Sports is affirmed as infringement, as a result the use of relevant Trade Name constitutes intentional infringement, furthermore which easily leads to confuse.

IV. It is not sure that Qiaodan Sports is able to afford the contact costs with Michael Jordan

In fact some Chinese sports enterprises recently have contracted with some NBA stars, such as LI-NING has signed with Shark O’Neal (Note this article is in Chinese). However, contrary to the high costs on contracting NBA stars, the profits of Qiaodan Sports is relatively lower because the prices of its products are much lower than LI-NING, ANTA and other competitors, therefore it is doubtful whether Qiaodan Sports is able to afford Michael Jordan in finance.

Last, despite Qiaodan Sports has already been approved for IPO as mentioned at the beginning of this article, this case may adversely influence its listing due to some changes happened to the statements of its Prospectus. The Prospectus states that “there is no commercial cooperation between the issuer and Michael Jordan; neither does the issuer take use of Michael Jordan’s image in advertising on enterprise and/ or products. Neither the trade name nor registered trademarks infringes Michael Jordan’s right of name and other rights”. However, Michael Jordan’s claims will overthrow such statement, and meanwhile the adverse impacts on the most valued brand of Qiaodan Sports may make it difficult for Qiaodan Sports to get listed in the near future.

Other recommended posts on our website:
1. The Actual Term of Trademark Registration in China
2. How to Apply for the Trademark Record in China Custom
3. How to improve the success rate of trademark registration in China?
4. Matters for Attention in Trademark Refusal Review in China
5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
9. Matters for Attention in the Patent Preliminary Injunction Application in China(I)

Author: Ms. Chen Danhong
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.

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