The Competition Appellate Tribunal (CAT) has dismissed an appeal filed by Options International (SMC-Pvt.) Limited, a Pakistani company penalized by the Competition Commission of Pakistan (CCP) for the unauthorized use of the Starbucks branding in its restaurants.
In a decisive move, the tribunal not only upheld the original penalty but increased it from Rs. 5 million to Rs. 6 million.
Starbucks, the globally recognized coffeehouse chain headquartered in Washington, lodged a formal complaint against Options International, accusing the Lahore-based restaurant of selling “Starbucks Coffee” and fraudulently using Starbucks trademarks. Starbucks emphasized that it has no franchises in Pakistan, and the misuse of its brand deceived consumers and harmed its business interests.
The CCP’s investigation found that Options International had prima facie violated Section 10 of the Competition Act by disseminating false and misleading information, thereby deceiving consumers and damaging the business interests of Starbucks. During the inquiry, Options International admitted to the violation.
Subsequently, the CCP issued an interim order at Starbucks’ request, directing Options International to cease using the Starbucks name and logo without authorization.
In its final ruling, the CCP noted that while Options International had ceased using the Starbucks trademarks and pledged compliance, the unauthorized usage had occurred over a significant period. Consequently, the CCP imposed a penalty of Rs. 5 million and mandated that Options International publicly announce its fraudulent use of the Starbucks brand through newspaper advertisements for three consecutive days.
Dissatisfied with the CCP’s decision, Options International appealed to the CAT. However, the tribunal dismissed the appeal and increased the penalty, citing that Options International continued to use the trademark even after filing a commitment before the CCP.
This ruling underscores the CCP’s resolve to curb deceptive marketing practices and the fraudulent use of trademarks, firm names, or product labeling, whether involving local or international business entities.