Café fined for unauthorized use of STARBUCKS trademark

A Lahore-based café has been fined PKRs 6 million for the fraudulent and unauthorized use of the STARBUCKS trademark, by the Competition Commission of Pakistan (CCP).

STARBUCKS, a well-known trademark and a globally recognized chain of coffeehouses registered in the State of Washington, lodged a formal complaint with the CCP that the Lahore-based café, Options International, was selling “Starbucks Coffee” while fraudulently using the STARBUCKS marks in its branding thereby deceiving consumers and harming its business interests. STARBUCKS clarified that it had not opened any franchise in Pakistan and had not authorized anyone to use its famous trademark STARBUCKS.

The CCP’s inquiry concluded that Options International had prima facie violated Section 10 of the Competition Act, 2010 by disseminating false and misleading information, deceiving consumers, and harming the business interests of the complainant. During the inquiry, Options International admitted to the violation.

Therefore, in its final order, the CCP’s bench noted that although Options International had stopped using the STARBUCKS marks and committed to complying with its directions, the unauthorized use of the marks had spanned a substantial period. Consequently, the bench imposed a penalty of PKRs. 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.

This decision underscores the CCP’s commitment to curb deceptive marketing practices through the fraudulent use of trademarks, firm names, or product labeling or packaging of a local or foreign business Options International filed an appeal against the CCP’s order before the Competition Appellate Tribunal (CAT). The CAT dismissed the appeal filed by Options International, and, in its decision, the tribunal increased the penalty from the originally imposed PKRs. 5 million to PKRs. 6 million.

The judgment of the CCP and the CAT represents a pivotal moment, marked by a landmark decision that not only levies a substantial penalty against those who fraudulently utilize the trademarks of others but also serves as a poignant lesson against engaging in deceptive trademark practices. Such a ruling stands to significantly bolster the confidence of entrepreneurs and enterprises in safeguarding their intellectual property rights in Pakistan. Moreover, it underscores the importance of robust enforcement mechanisms to uphold these rights effectively. By setting a precedent for stringent consequences, this decision serves as a deterrent against future attempts to exploit trademarks unlawfully, thereby fostering a more secure and equitable environment for innovation and commerce.