In The Matter Of Show Cause Notices Issued to MIs Sfahique & Sons and Ors.

Pakistan

30.06.2016

MRTP/ Competition Laws

A strong likelihood of confusion on part of targeted consumer is central to a determination as to existence of a deceptive marketing practice through fraudulent use of another's trademark

In instant case, proceedings initiated pursuant to Show Cause Notices issued to Respondents for prima facie violations of Section 10 of Competition Act, 2010. Complainant alleged that, Respondents have copied its distinct and registered logo (the Wing Device) in a way that motorcycles manufactured by the Complainant and those manufactured by the Respondents are indistinguishable. Complainant further alleged that, three Respondents, through use of deceptively similar logos (the Objected Logos), are creating an impression in minds of consumers, that their products are actually those of Complainant's and they are passing off their goods to consumers as goods manufactured by Complainant.

Enquiry Report does not amount to a determination of liability or guilt of Respondents and has been considered by Commission to extent of prima facie facts and recommendations contained therein, after which Commission found it necessary in the public interest to initiate proceedings. Term "fraudulent use" in Section 10(2)( d) of Act, refers to fraudulent marketing by an undertaking, where circumstances are such that the targeted consumers arelikely to rely on the marketing scheme of undertaking, to commercial detriment of another. Furthermore, a strong likelihood of confusion on part of targeted consumers as well as free riding on the goodwill attached to another's trademark is central to a determination as to the existence of a deceptive marketing practice through fraudulent use of another's trademark. Such likelihood of confusion is presumed in case of use of an identical trademarked sign or logo. However, this presumption is not attracted where there is a combination of material similarities and distinctive features, in which situation a comparison and analysis is required of intrinsic and external factors to determine how likely it is that consumer confusion shall result objectively. Such factors may include among others, extent of similarity in the overall trade dress of competing products, distribution channels for sales and whether the products are related or are sold in different geographic markets.

If logos are viewed in isolation without any attention given to other external factors of overall marketing strategies, certain striking similarities do exist at first sight in terms of overall shape and design of two wings. However, when further attention is paid and specifically in view of adjoining respective brand names of parties being affixed to logs at the base, logo and brand name seen as a whole confirm existence of distinctive features. Furthermore, when extraneous factors such as overall layout of their respective marketing practices are seen in juxtaposition with each other, similarities are blurred even further.

Use of objected logo by the Second Respondent being similar to a much earlier version of the Complainant's Wing does not have potential to impair identification and differentiation ability of targeted consumer from a deceptive marketing perspective within the scope of Section 10(2)(d) of the Act. On basis of a pictorial comparison of two logos above, it is observed that there has been no identical use of Complainant's existing Wing Device by Third Respondent. However, overall appearance may be seen as similar, if logos are seen in isolation of all other components including the circled star emblem located at centre of the said Respondent's logo. However, when two logos are compared in the presence of distinctive features and adjoining brand names of the parties, the Commission finds no conclusive deceptive behaviour on part of Third Respondent. This view is further strengthened by existence of other important factors to be considered from a competition viewpoint, such as completely distinct colour scheme, overall layout and tag lines of the respective marketing campaigns of two parties. Furthermore, an exclusive chain of authorized distributors and dealers exist for sale of Third Respondent's motorcycles, based on which the likelihood of confusion is negated on part of the targeted consumers. None of three Respondents were engaged in deceptive marketing practices in contravention of Section 10 of Act.

Tags : Contravention Provisions Deceptive marketing

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