In what lawyers are calling the largest award to a foreign company in a trademark dispute in China, a Chinese court has ordered local shoemakers to pay New Balance Athletics Inc. $1.5 million in damages and legal costs.

Does this decision mean IP strategies in China will change for the Boston-based company? Daniel McKinnon, senior counsel for IP and global brand protection at New Balance, said “not really,” though it does offer an encouraging sign that counterfeiters in China may now have to factor more risk into their business models.

The Aug. 17 ruling from the Suzhou Intermediate People’s Court, which has yet to be made public but was provided to Corporate Counsel by McKinnon, found that defendants Zheng Chaozhong, Xin Ping Heng Sporting Goods Limited Co. and Bo Si Da Ke Trading Limited, who are behind a brand called “New Boom,” had objectively “seized a large part of the market share of New Balance sports shoes.” With the sale of shoes with a slanted “N” design on both sides of a shoe, the court wrote, the defendants took advantage “of the hard-won honors and market influence of New Balance shoes … and shall bear the corresponding liability.”

The decision, which came just days after President Donald Trump ordered an investigation into China’s alleged theft of intellectual property, stipulates that along with paying the more than $1 million in damages, the defendants must immediately stop selling the infringing products and publish a public statement in a nationally distributed newspaper to “eliminate the bad effect caused to New Balance.”

“I think we’re seeing a sort of changing of the guard, if you will, a step in the right direction for upholding intellectual property rights,” McKinnon said of the ruling. “But I don’t think we’re all the way there yet,” he noted, because while this is the largest award for a trademark case in terms of damages in China, “it’s still not the same that we would see in other developed nations.”

But New Balance has not always met with success in Chinese trademark fights. In April 2015, a Chinese court fined the company roughly $16 million for use of the Chinese name of New Balance. On appeal, the fine was reduced to around $750,000, but New Balance still lost.

At least part of the struggle for New Balance and other companies looking to protect their IP comes down to China’s first-to-file system, which means whoever files an application first is given priority. While the nation has made recent revisions to its trademark law to provide greater protection and impose harsher penalties on infringers, trademark squatting continues to be an issue.

“The China trademark office right now is overwhelmed with these type of bad-faith filings,” McKinnon said. At any given time in the U.S., New Balance may be opposing the registration of two to three trademarks, he said, but “in China, we are opposing over 1,000.”

Despite the challenges, New Balance’s aggressive approach to protecting the company’s IP hasn’t changed, according to McKinnon, and what’s more, fighting despite a potential loss in court is what may actually bring about change. “Without companies like New Balance and others really pushing aggressively and saying that, in the face of these challenges and in the face of the likelihood of loss, we still move forward and fight these fights … I don’t think we’d see this change we’re starting to see,” he said.

“Obviously, like all companies, we need to work within budget constraints and we need to prioritize our legal matters, so all of that factors in, but when it comes to the protection of our intellectual property, New Balance has always been on the more aggressive side,” McKinnon added. “We don’t always win, but we always fight. That’s sort of been our motto all the way through.”

While it’s true that courts in China don’t follow precedent, McKinnon said they do follow trends, which may mean the ruling will have a wider impact. “As certain Chinese courts receive praise or encouragement for positive decisions they’ve rendered, other courts will at least take that into consideration when making decisions,” he explained.

At the end of the day, McKinnon believes New Balance’s win and others like it are what’s needed to actually deter counterfeiters. Currently, there’s a high volume of trademarks that are being applied for in China because people know if they can get those trademarks on the books, they can produce goods with those marks, he said.

“They know, ultimately, the monetary damages that they will have to pay for all of this bad faith activity is relatively low. So it’s really a cost-benefit analysis,” McKin­non said. “The true moment that we’re going to see the tide begin to turn in China is when the damage awards in these infringement cases are at such a level that they are actually discouraging the desire to counterfeit.”