DECEMBER 9, 2022

The Competition Act applies to all Undertakings and Actions within Pakistan that have the Potential to distort the Competition, even if the Entity whose Trademark is infringed does not have a Physical Presence in the Country --- Supreme Court of Pakistan

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The Competition Act applies to all Undertakings and Actions within Pakistan that have the Potential to distort the Competition, even if the Entity whose Trademark is infringed does not have a Physical Presence in the Country --- Supreme Court of Pakistan

 

Islamabad, 12-08-2024: The Supreme Court of Pakistan dismissed an appeal by M/s Options International (SMC-Pvt.) Ltd, upholding a significant penalty imposed by the Competition Commission of Pakistan (CCP) for unauthorized use of the globally recognized Starbucks brand name and logo. The Court's decision reaffirmed the application of the Competition Act, 2010, in cases involving trademark infringement that distorts competition within the country.

 

The appeal, filed under Section 44 of the Competition Act, 2010, challenged a judgment of the Competition Appellate Tribunal, Islamabad. The Tribunal had earlier increased the initial penalty from five million rupees to six million rupees but reduced the per-day non-compliance penalty from one hundred thousand rupees to five thousand rupees, effective from December 3, 2021, when the Tribunal became functional.

 

In its order, the Supreme Court highlighted that the Competition Act applies to all undertakings and actions within Pakistan that have the potential to distort competition, even if the entity whose trademark is infringed does not have a physical presence in the country. The Court rejected the appellant's argument that the Act should not apply since Starbucks Corporation USA did not operate within Pakistan.

 

The case revolved around a complaint by Starbucks Corporation USA, which alleged that Options International was using the Starbucks name and logo to sell its products in Pakistan. The CCP had taken action based on this complaint, leading to the penalties in question.

 

The Court also confirmed that the penalties imposed by the CCP were legally valid under Section 38 of the Competition Act, 2010. The appellant's objection to the penalties was dismissed, as their counsel conceded that the penalties were authorized by law.

 

In conclusion, the Supreme Court dismissed the appeal, maintaining the penalties without imposing any additional costs, noting the non-appearance of Starbucks Corporation USA in the case.

 

This decision underscores the strict enforcement of trademark rights and the importance of maintaining fair competition within Pakistan, reinforcing the legal framework provided by the Competition Act, 2010.

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