Penalty increased for fraudulent use of startbucks marks

Penalty increased for fraudulent use of startbucks marks


ISLAMABAD, MAY 31: The Competition Appellate Tribunal (CAT) has dismissed the appeal filed by M/s Options International (SMC-Pvt.) Limited, a Pakistani company penalized by the Competition Commission of Pakistan (CCP) for the fraudulent use of the international coffee chain STARBUCKS’ branding in its restaurants. In its decision, the CAT increased the penalty from the originally imposed Rs. 5 million to Rs. 6 million.

STARBUCKS, a globally recognized chain of coffeehouses registered in the State of Washington, lodged a formal complaint that the Lahore-based restaurant, Options International, was selling “Starbuck Coffee” while fraudulently using “STARBUCKS MARKS,” in their branding thereby deceiving consumers and harming its business interests. STARBUCKS clarified that it had not opened any franchise in Pakistan.

The CCP’s enquiry concluded that Options International 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. During the enquiry, Options admitted the violation.

During proceedings, CCP passed an interim order on STARBUCKS’ request, directing Options International to stop using the labelling and packaging bearing the STARBUCKS trade name and logo without authorization.

In its final order, CCP’s bench noted that although Options had stopped using STARBUCKS MARKS and committed to complying with its directions, yet the unauthorized use of the STARBUCKS MARKS spanned a substantial period. Consequently, the bench imposed a penalty of Rs. 5 million on the company. Additionally, the bench directed Options International to inform the general public through newspaper advertisements for three consecutive days about its fraudulent use of the STARBUCKS MARKS.

Options International filed an appeal against the CCP’s order before the CAT, which dismissed the appeal and increased the penalty amount on the basis that Options continued using the trademark even after filing commitment before CCP. This decision underscores the CCP’s commitment to curb deceptive marketing practices through fraudulent use of trademark, firm name, or product labelling or packaging of a local or foreign business concern.