Background of the Case

CCP received a formal complaint from National Foods Limited alleging that Shainal foods was copying its trademark and logo in packing, marketing, and selling its food products.

Moreover, the colour scheme and design of the Shainal Foods product was starkly similar to National Foods products, which was misleading the consumers.

CCPs enquiry committee concluded that Shainal Foods was imitating the logo, packaging, colour scheme and design of National Foods products, thus potentially harming its business interest as well as misleading the consumers.

Issues:

I. Whether the Respondent has engaged in deceptive marketing practices within the meaning and scope of section 10(2)(d) of the Act through the fraudulent use of the Complainants Trade Dress and hence a contravention of Section 10 (1) of the Act;

II. Whether the Respondent has engaged in deceptive marketing practices within the meaning and scope of Section 10 (2) (b) of the Act through the distribution of false or misleading information which lacks a reasonable basis, and hence a contravention of Section 10(1) of the Act.

III. Whether, the Respondent has engaged in deceptive marketing practices within the meaning and scope of section 10 (2)(a) through the distribution of false or misleading information that is capable of harming the business interests of the Complainant, and hence a contravention of Section 10(1) of the Act.

Foreign Judgments relied upon by the Counsels:

a) Traffix devices, Inc. Marketing displays,Inc. 532 U.S. 23 (2001)

b) Jeffrey Milstein, Inc. Vs Greger, Lawler, Roth, Inc., 58 F.3d 27, 31 (2d Cir. 1992)

c) Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763.

d) United Biscuits UK (Ltd) v ASDA Stores Ltd (1997)

e) Colgate Palmolive Co v Anchor Health & Beauty Care (Pvt.) Limited (2003) PTC 478 Del

f) Pfizer, Inc., 81 F.T.C. 23 (1972)5

Order:

The Commission held that the Respondent’s and Complainant’s trade dresses were deceptively similar, and the ordinary consumer, specifically the illiterate, would not be able to distinguish between the two products but for the brand names. Therefore, the Commission found a violation of Section 10 of the Competition Act by the Respondent to the extent of the fraudulent use of the Complainant’s trade dress.

The Commission also held that the Respondent had failed to discharge the burden of providing any level of substantiation for the authenticity of its Trade Dress to the effect that it would not cause a misleading impression that the Respondent’s products originate from the Complainant and hence match the quality thereof. In view thereof, the Commission concluded that the Respondent was disseminating misleading information to consumers lacking reasonable basis in the form of confusing similarities of Respondent’s trade dress to that of the Complainant’s trade dress, misleading consumers to the orign and place of production of the product.

The Commission further held that the Respondent’s practice of parasitic copying of the Complainant’s trade dress, being inherently deceptive, was capable of harming the business interest of the Complainant.

The Commission after due course of proceedings passed an order penalising Shainal Foods for 5 Million PKR for violating Section 10 of the Competition Act, 2010.

The order noted that though Shainal Foods was given substantial time to amend its branding to address the competition concerns, however, no serious effort was made by the company in this regard.

Current Status:

Subsequent to the Commission’s order the Undertaking filed an appeal with the Competition Appellate tribunal, consequent to which the Order in the instant matter was suspended.