Business news :Nike Sues in Chinese Trademark Dispute

Liu xiang

According WSJ By LAURIE BURKITT

BEIJING—Nike Inc. NKE +1.36% is fighting Chinese trademark authorities to win rights to use the Chinese-language name of Olympic hurdler Liu Xiang in its marketing, the latest in a spate of trademark disputes emerging as Western companies try to build their brands in China.

The Beaverton, Ore., sportswear company already has the right to use Mr. Liu's image and his name in English spelling,

The Trademark Appeal Board had previously denied Nike's trademark application, saying that the rights still belong to Chinese garment maker Shanghai Liuxiang Industrial Ltd.

Now, Nike is suing China's Trademark Appeal Board of the State Administration for Industry and Commerce to use the name, a spokesman for the Beijing No. 1 Intermediate People's Court said Wednesday. The court heard the case last week but hasn't yet made a ruling, the spokesman said.
Nike didn't respond to requests for comment.

Nike's dispute is the latest in a growing list of court cases that have emerged over the past year over trademarks, underscoring the challenges of branding, naming rights and trademarks in China. While the Chinese government is often criticized for its lack of intellectual-property rights enforcement, the country's own intellectual property laws are known to be so broad that they may prevent world-wide sales of products that are made in China and violate Chinese trademark laws and patent protections.
In February, Chinese authorities started seizing from retailers Apple Inc.'s AAPL +2.14% iPads that they claimed violated the rights of Proview Electronics Co., a screen maker that owned the trademark to the iPad name. Courts ruled that the Cupertino, Calif., gadget maker pay $60 million to the Chinese company.

Basketball star Michael Jordan in February cried foul against sportswear chain Qiaodan Sports Co., saying the company improperly used the Chinese version of his name to set up more than 5,700 stores. The verdict is still pending.

For years, Nike has built its marketing in China using Mr. Liu, who became a national hero and gained commercial appeal after winning a gold medal in the 2004 Athens Games and setting a world record in the 110-meter hurdles.

Subway walls around China are plastered with Nike ads featuring the athlete and Nike has also developed lines of apparel commemorating him, using LX and LiuXiang on the products rather than his name in Chinese characters. This summer, Nike launched a special sneaker called the Liu Xiang x Nike LunarGlide+ 4 to add to its other items, such as the Nike LunarGlide LiuXiang Storm Fly running jacket.
Shanghai Liuxiang Industrial, a family-run company that started in the mid-1980s, bought the trademark in 1986, long before the athlete earned his Olympic fame, as a logo that represented their family name, Liu, and the village, Yixiang, where it was founded. The company's owner, Liu Jianzhong, said Nike hasn't approached them for use of the trademark.

Nike executives said last year that it has a goal of roughly doubling its sales in China to $4 billion by 2015. But in September, Nike said sales in China have been weakening.

(A version of this article appeared December 6, 2012, on page B8 in the U.S. edition of The Wall Street Journal, with the headline: Nike's Fight in China.)