Upholding Brand Integrity: The Case Of New Balance Athletics

Introduction:

The Delhi High Court on 21^st October 2024 passed a judgment regarding a trademark dispute between New Balance Athletics, Inc., a globally recognized sportswear brand, and Kiran Shoe Company, a footwear manufacturer based in India. In 2024, New Balance filed a lawsuit in the Delhi High Court, alleging that Kiran Shoe Company had engaged in trademark infringement and unfair competition by manufacturing and selling products marked with “N” and “550” symbols that closely resembled New Balance’s trademarks. Through an ex parte injunction, product seizures, and final court orders, New Balance successfully halted the defendant’s activities, underscoring the importance of intellectual property rights in protecting brand reputation.

Background:

In 2024, New Balance Athletics, a prominent global footwear manufacturer, filed a legal suit in India against Kiran Shoe Company, accusing them of trademark infringement, passing off, and engaging in unfair competition. The case, New Balance Athletics v Pulkit Khubchandani, centred around the defendant’s production and sale of footwear that used marks resembling New Balance’s well-known “N” logo and “550” brand identifier. New Balance alleged that Kiran Shoe Company’s use of similar marks was likely to confuse consumers, leveraging the reputation of New Balance’s trademarks to boost their own sales.

New Balance’s Claims:

New Balance’s trademarks, particularly the “N” device and “550” model number, have a longstanding association with their brand, first introduced in the U.S. in the 1970s and registered in India in 1987. New Balance argued that their trademarks are recognized and have gained substantial goodwill over the years. They claimed that the defendant’s products, marked with similar designs, were effectively counterfeit versions of their own, creating an unfair advantage by misleading consumers about the products’ origins.

After noticing these infringing activities in May 2024, New Balance initiated a private investigation. This investigation revealed that Kiran Shoe Company was selling footwear featuring the disputed marks through both their website and various e-commerce platforms. New Balance maintained that this imitation was a deliberate attempt to capitalize on the brand’s established reputation.

Court’s Initial Rulings:

On May 28, 2024, the Court issued an ex parte interim injunction, restraining Kiran Shoe Company from manufacturing or selling footwear with the contested marks. A Local Commissioner was appointed to conduct a raid at the defendant’s premises, which led to the seizure of a significant number of counterfeit items bearing New Balance’s trademarks, as well as other counterfeit items from other brands. In response, the defendant submitted an affidavit stating they had ceased using the infringing marks and promised not to use or register similar marks in the future.

However, New Balance argued that Kiran Shoe Company’s long history of counterfeit activities and misleading branding practices demonstrated intentional infringement, with no credible explanation for adopting the disputed marks. This supported New Balance’s claim that the infringement was not accidental but a calculated move to benefit from New Balance’s established brand image.

Judgement:

During proceedings on October 7, 2024, the Court noted that the defendant had agreed not to engage in counterfeit activities resembling New Balance’s trademarks. By October 21, 2024, Kiran Shoe Company consented to a decree of injunction, permanently halting their dealings in infringing products. Despite the injunction, New Balance pursued additional compensation for damages and costs, citing expenses incurred during their investigation, filing fees, and the cost of appointing the Local Commissioner. The Court recognized that Kiran Shoe Company’s actions were a clear, deliberate infringement aimed at misleading consumers and enhancing their own sales through New Balance’s brand identity.

In its final judgment, the Court ruled in favour of New Balance and issued the following directives:

1. The suit was decreed in favour of New Balance, confirming the plaintiff’s claims as outlined in their prayer clause.
2. The infringing products seized by the Local Commissioner were ordered to be destroyed by Kiran Shoe Company in the presence of a New Balance representative.
3. New Balance was awarded costs amounting to ₹5,00,000 and additional damages of ₹2,00,000, to be paid by the defendant within four months from the date of judgment.

Conclusion:

This case emphasizes the importance of brand protection and the consequences of trademark infringement in a globalized market. By granting New Balance an injunction and awarding costs and damages, the Court reinforced the brand’s exclusive rights over its trademarks and discouraged attempts to profit from another company’s reputation. The Court’s decision serves as a reminder that intentional infringement and unfair competition are taken seriously under Indian trademark law, offering brands both protective and punitive measures to uphold their intellectual property rights.