‘The café was fraudulently using the official logo of int’l coffeehouse chain, Starbucks’
ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed a penalty of Rs5 million on a Lahore-based café, owned by Options International (SMC-Pvt) Limited (Options), for violating Section 10 of the Competition Act, 2010, as it fraudulently used the official logo of international coffeehouse chain, Starbucks.
“Starbucks Corporation is registered in Washington, USA, and runs an international network of coffeehouses through its authorised operators, licensees, and franchisees operating in more than 66 countries uniformly using the Starbuck Marks,” according to a statement issued by the CCP on Monday.
Starbucks sent a formal complaint to the CCP that Options was engaged in the marketing, advertising, selling, and offering to sell “Starbucks coffee” by using the Starbucks Marks on the signboard of its coffee houses and restaurants, including on the packaging material, menus, flyers, its Facebook page, and other promotional material, without any authorisation.
The practice was not only harming the business interest of Starbucks but also deceiving the consumers. The CCP’s inquiry established that Options has violated Section 10 of the Competition Act by fraudulently using the official trademark of Starbucks. On the inquiry’s recommendations, a show-cause notice was issued and hearings were held.
During the proceedings, CCP received another application from Starbucks seeking an interim order in the case to prevent further damage to its business and goodwill until the commission concludes its proceedings.
On 17 August 2018, the CCP passed an interim order directing Options International to immediately stop using the Starbucks logo in its products until the conclusion of the proceedings and issuance of the final order.
In the final order, the CCP bench noted that although Options has stopped using Starbuck Marks and also filed commitment to comply with its directions, however, since the unauthorised use of Starbucks Marks spanned over a substantial period of time, the bench imposed a penalty of Rs5 million on the company.
The bench directed Options to inform the general public through newspaper advertisements for three consecutive days, from the date of the order, about its fraudulent use of the Starbucks Marks.
CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity in order to enhance economic efficiency and to protect consumers from anti-competitive practices, including deceptive marketing practices.
SECP should have thrown out the complaint unless Starbucks agreed to set up stores in Pakistan. There is no business interest to harm or damage when you are not operating in the country.
While Intellectual Property is a right in itself, job creation should also be a priority.