Chief lawyer Xu Xinming acting for the plaintiffs, Furui Stainless Steel Water Tower Factory of Xincheng District, Huai Yuan County, (“Huaiyuan Furui Factory”) won its appeal against the ruling no. 147543 of the Trademark Review and Adjudication Board in favour of Zhongshan Furui Shower Equipment Co.,Ltd (“Zhongshan Frae Company”). On July 11,2014 , Beijing First Intermediate People’s Court handed down decision number 4321 quashing the decision of the Trademark Review and Adjudication Board relating to trademark no. 7405468 - the “福瑞”(Furui) trademark and ordered that the case be reconsidered by the Trademark Review and Adjudication Board.
Zhongshan Frae Company was incorporated on August 23, 2003 and specializes in middle-high grade bathroom products. It’s products are exported to Asia, Europe, America and other places.
On April 26, 2004, Huaiyuan Furui Factory was established in Xincheng District, Huaiyuan County, Anhui Province. It has since been committed to selling “福瑞” (Furui) branded products such as water towers, pressure water tanks, solar water heaters, pipe fittings and other bathroom related products. These “福瑞”(Furui) branded products are popular in and outside Anhui province. In order to protect the “福瑞”(Furui) trademark, Huaiyuan Furui Factory applied for registration number 7405468 of the “福瑞” (Furui) trademark with the State Trademark Office under the specific use of goods in class 11: water towers, pressure water tanks, solar water heaters, etc,. Within the statutory time limit permitted for objections, Zhongshan Frae Company filed an objection against Huaiyuan Furui Factory’s application on the basis that it violated its prior right. On Dec. 11,2012, the State Trademark Office made a ruling to dismiss the objection of Zhongshan Frae Company.
On January, 20, 2013, Zhongshan Frae Company applied to the Trademark Review and Adjudication Board to review their decision and asked that the State Trademark Office not approve the application for registration of the “福瑞”(Furui) trademark by Huaiyuan Furui Factory on the basis that their products, sales contracts, advertising, marketing and other foreign market activities use words “福瑞Frae and images” and as such, is already in use by Zhongshan Frae Company. Zhongshan Frae Company accused Huaiyuan Furui Factory of prejudicing their trade name rights through preemptively registering the “福瑞” (Furui) as a trademark. On January 7, 2014, The Trademark Review and Adjudication Board upheld the claims of Zhongshan Frae Company and ruled that the “福瑞” (Furui) mark shouldn’t be approved for registration.
Huaiyuan Furui Factory began looking for an experienced IP lawyer to advise them and after comparing several, chose to retain Xu Xinming, the Chief Lawyer of the China Intellectual Property Lawyers Net (www.ciplawyer.com). After carefully researching the case, Lawyer Xu filed a lawsuit at the Beijing First Intermediate People’s Court on the basis that the main evidence submitted by Zhongshan Frae Company to the Trademark Review and Adjudication Board had no probative force.
The main arguments for the plaintiffs were as follows:
1. The plaintiffs had solid grounds upon which to use and apply for registration of the “福瑞” (Furui) trademark.
Zhongshan Frae Company was established in Zhongshan City of Guangdong Province in 2003. It was only 1 year later that Huaiyuan Furui Factory was founded in Bengbu City of Anhui province. At that time, the plaintiffs were not aware of the trade name of Zhongshan Frae Company and it was not possible that Zhongshan Frae Company’s name extended beyond Zhongshan City of Guangdong Province to Bengbu City. In addition, since inception, Huaiyuan Furui Factory has been using the mark “福瑞” (Furui) on all its products, therefore, Huaiyuan Furui Factory had a bona fide, legitimate right to have the “福瑞” (Furui) mark protected by law.
2. Since 2004, Huaiyuan Furui Factory has used the “福瑞” (Furui) mark on its products and has developed consumer recognition.
Since 2004, the plaintiff has established a business in the operation of water towers, pressure water tanks, solar water heaters, etc. bearing the mark “福瑞” (Furui) and “福瑞” (Furui) branded products have been sold in and outside of Anhui province. As a consequence, the “福瑞” (Furui) mark was known to the market as being associated with Huaiyuan Furui Factory.
3. It was unconscionable for the defendant to over exaggerate the right of Zhongshan Frae Company in the “福瑞” (Furui) trade name.
First, the tade name right is regional. The same trade name could be used by different entities in different regions. The plaintiffs’s rights to the “福瑞” (Furui) mark weren’t influenced by or excluded by the use of the same mark by Zhongshan Frae Company which were exported and not sold locally.
Second, Zhongshan Frae Company hardly ever used the Chinese trade name “福瑞”（Furui） on Chinese market.
Third, there are obvious differences between the trade name right and the trademark right. The trademark is used to identify the source of the goods and to distinguish between different goods whilst the trade name is used to identify the enterprises and is not generally used to differentiate between the source of the goods. Over time, “福瑞” (Furui) has become the trade name and the trademark of the plaintiffs. After long-term use, the “福瑞” (Furui) mark has been linked to Huaiyuan Furui Factory and it is unlikely that their products would be mistaken for the products of Zhongshan Frae Company.
4. In accordance with the Trademark Law, the first application at the Trademark Office for a particular mark shall be approved.
According to article 29 of the “Trademark Law”, Chinese legal protection for trademarks follow the principle of earlier application. In this case, the plaintiffs and Zhongshan Frae Company both used the same trade name “福瑞” (Furui) while the plaintiffs also used “福瑞” (Furui) as a trademark. Since the plaintiffs filed the application for registration of the “福瑞” (Furui) mark first, then in accordance with the above legal principle, the Trademark Office should approve the plaintiffs’ application for registration. The Trademark Review and Adjudication Board violated the above legal principle when it overruled the plaintiffs’ application for registration of the “福瑞” (Furui) mark on the basis of Zhongshan Frae Company’s trade name right. Therefore, the Trademark Review and Adjudication Board’s ruling was incorrect and should be revoked.
On June 24, 2014, the Beijing First Intermediate People’s Court held a public hearing of this case and on July 11,2014, delivered it’s decision to revoke No. 7405468 “Furui” trademark objection review ruling made by the Trademark Review and Adjudication Board and ordered it to reconsider the case from the beginning.