ISLAMABAD: The Supreme Court has refused to arbitrate a dispute between the international coffee chain, Starbucks, and a local restaurant accused of using its name and logo to allegedly deceive customers.
The controversy revolves around the use of Starbucks’ name and logo by Messrs Options International (SMC) Pvt Ltd (appellant) to sell its products under that name and style. Starbucks, a globally recognised chain of coffeehouses registered in the US state of Washington, had lodged a formal complaint before the Competition Commission of Pakistan (CCP) that the Lahore-based restaurant, Options International, was selling “Starbuck Coffee” while fraudulently using “Starbucks Marks” in their branding, thus deceiving consumers and harming its business interests.
CCP’s decision
Consequently, the CCP’s inquiry concluded that the appellant had prima facie violated Section 10 of the Competition Act by disseminating false and misleading information, deceiving consumers, and harming the business interests of the complainant. The CCP imposed a penalty of Rs5 million on the appellant and ordered an additional penalty of Rs100,000 per day in case of non-compliance.
A three-judge Supreme Court bench, headed by Chief Justice of Pakistan Qazi Faez Isa, later took up an appeal moved by Messrs Options International (SMC) Pvt Ltd against the May 29 decision of the Competition Appellate Tribunal.
Local restaurant’s use of the global coffee chain’s name and logo ‘deceptive’, complainant says
The appellant had assailed the CCP’s decision to impose penalty on December 19, 2018, before the tribunal. But the tribunal decided the appeal by enhancing the penalty amount from Rs5m to Rs6m while reducing the per day penalty to Rs5,000 only from Rs100,000 with effect from December 3, 2021.
During the hearing, the Supreme Court inquired from Advocate Taimoor Aslam Khan, representing the appellant, whether his client disputes that the name Starbucks and logo were registered trademarks. The counsel conceded that both the name and logo were registered abroad and in Pakistan.
The SC observed that it did not agree with the submission made by the counsel, adding that the appellant had put itself forward by selling its own products under the international brand name Starbucks and using its logo, which must have had the effect of distorting competition within Pakistan because a local vendor selling similar products as those being sold by the appellant, would be at a serious disadvantage and not able to compete therewith since the unsuspecting public would believe, understand or perceive the same to be the genuine products of the complainant. The counsel objected to the levy of penalties but when the court inquired from the counsel whether the law authorises the penalties, he conceded.
Published in Dawn, August 11th, 2024
