Michael Jordan’s Great Win in China—or Is It?

On December 8, 2016, Beijing time, the China Supreme People’s Court issued a public decision granting Michael Jordan a win in his four-year battle over the right to own his name in Chinese characters.  But the win was not a complete one. In that same decision, Supreme Court concluded that Michael Jordan does not own the phonetics of the name JORDAN in Chinese characters.

What exactly does this mean?

The dispute started more than a decade ago between “Qiaodan Sports” (a Chinese sportswear company headquartered in the southeastern part of China) and Michael Jordan (the six-time NBA champion from the United States). Qiao-Dan is the English phonetic (the so called “transliteration”) of JORDAN in Chinese characters. If you say “Qiao-Dan” to a Chinese native speaker, he or she recognizes that as referring to JORDAN in English.

The beginnings of the conflict date back to the 1990s. When Nike expanded the Air Jordan brand to China in the 90s, it registered the JORDAN mark in English. It did not, however, register the JORDAN mark in Chinese characters.

Qiaodan Sports was established around 1998. It started out as a small footwear company based in Fujian Province, China. In the ten-year period (between 2000 and 2010), Qiaodan Sports registered a number of QIAO-DAN trademarks. As further evidence of its true intent, it also obtained trademark registrations in various iterations of the jump man silhouette. Today, Qiaodan Sports owns close to 500 trademark registrations in China.  Some of these marks are shown below:

 mj1  mj4  mj3  mj2

For whatever reason, Nike either failed to oppose these marks or decided not to pursue appeals with the Chinese courts. By 2012-2013, Qiaodan Sports had consistently used its Chinese version of the JORDAN mark for more than a decade. Once registrations in China pass the five-year mark, they are very difficult to remove through invalidation actions. And throughout that time, Qiaodan Sports continued to build its sports and footwear apparel empire. By 2015, it owned more than 5700 retail stores across China and had annual sales of RMB 3 trillion (roughly US $500 million). At one time, it even considered becoming a publicly traded company in China.

mj5

A picture of Qiaodan Sports’ retail store in China

In 2012, Michael Jordan commenced actions to cancel Qiaodan Sports’ trademarks, filing more than 78 appeals and lawsuits with China’s Trademark Appeal Board, Beijing First Intermediate Courts, and Beijing High People’s Court. He lost them all.

In 2016, the China Supreme People’s Court (the equivalent of the Supreme Court in the United States) accepted Michael Jordan’s appeal. The Supreme Court held a public hearing in April and issued its decision in December wherein it supported 3 out of 10 appeals filed by Michael Jordan, denying the other 7. The Supreme Court ruled that Michael Jordan enjoys personal name rights over the Chinese characters for QIAO-DAN (the 3 wins). While giving with one hand, the court took away with the other, denying Michael Jordan’s rights in the corresponding Chinese phonetics for JORDAN (the 7 losses).

Is this really the “great win” as the media is claiming?  Not quite.

Out of the three trademark registrations discussed in the Supreme Court decision in which Michael Jordan was successful (outlined below), only the first registration would have a practical business impact on Qiaodan Sports. A quick search of Chinese trademark records shows that there are over 100 marks in China that are registered with JORDAN in Chinese characters. Among these 100+ marks, there are eight registrations that are comprised solely of the two QIAO-DAN characters. Qiao-Dan Sports  is still the owner of the English phonetics QIAO-DAN, the jersey shirt number “23”, and the flying man silhouettes.

Unlike the United States, China follows the first-to-file system.  This means rights are based almost exclusively on registrations (except for some cases where senior rights are recognized as “famous”—a very high threshold to establish in China). Michael Jordan was having a hard time getting support from the China administrative and judicial system precisely because he (or Nike) did not have any senior rights in JORDAN through Chinese registrations. Quite simply, while Michael Jordan was one of the fastest on the basketball court, Qiaodan Sports was faster before the Chinese trademark office.  Qiaodan Sports beat Nike and Michael Jordan to it.

It is important to understand that there is no “fixed” Chinese mark for an English brand.  The Chinese language is a “fluid” language where the meaning of each character is determined mostly by the context (i.e., its surrounding characters). A Chinese brand can be created by translation (such as “Apple”), transliteration (such as “Google”), brand concept (e.g., BMW’s Chinese brand literally means “treasure horse”), nickname (Viagra is known as “great brother” in China), or a combination of any of the above methods. In this case, after Nike’s entry to the Chinese market in the 90s, due to the lack of an “official” Chinese name for Jordan, the market simply created one.  Over the years, the two specific QIAO-DAN characters have formed an exclusive connection with  “JORDAN” in English.  This exclusive connection, however, is only in the commercial world. Trademark owners have to take it one step further to register the English and Chinese marks together to formally and legally establish the connection.

While Jordan now owns the QIAO-DAN characters, he does not own the “sound” (the phonetics) for these characters.  However, it was still a good win for Jordan for the following reasons:

  • Characters are a more popular form of use than the phonetics; thus, among the two, Jordan won the more important one.
  • Qiaodan Sports’ bad faith was recognized by the Supreme Court based upon its ownership of the silhouette logo, the famous jersey number “23,” and the names of Jordan’s two sons, in English and Chinese characters. Ultimately, this finding could be helpful in prevailing in the lower courts.
  • Overall, this is a favorable development for western brand owners. Through this win, Michael Jordan and Nike have formally announced to Chinese consumers that the company “Jordan Sports” has no connection to either the real Michael Jordan or Nike.  The message will be heard loud and clear.

Lessons learned from the Jordan v. Qiaodan lawsuit? If you are doing business in China and you do not yet have a formal Chinese brand name, search the market to see if one has been created for you and, if so, register it immediately. If not, devote your resources to creating one. If you already have a Chinese name, make sure to monitor the market periodically to make sure no other names—such as nicknames— have been created for your brand, and consider whether it makes sense to register them for defensive purposes. And if there are multiple Chinese brands floating in the market that all refer back to the same English brand (not uncommon in China), while it is important to seek protection legally, it is also important to start a campaign to “unify” your brand name in Chinese.

 

DISCLAIMER: Although we wish to hear from you, information exchanged in this blog cannot and does not create an attorney-client relationship. Please do not post any information that you consider to be personal or confidential. If you wish for Finnegan, Henderson, Farabow, Garrett & Dunner, LLP to consider representing you, in order to establish an attorney-client relationship you must first enter a written representation agreement with Finnegan. Contact us for additional information. One of our lawyers will be happy to discuss the possibility of representation with you. Additional disclaimer information.

Tagged , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: