Following a complaint filed by Atlas Honda Limited against Shafique and Sons, Pak Hero Industries (Private) Limited and United Motors Company for deceptive marketing practices, the Competition Commission conducted an enquiry and initiated proceedings against the three undertakings. However, it found that none of the accused could be held responsible for the alleged deceptive marketing practices within the meaning of Section 10 of the Competition Act 2010.

Facts

Atlas Honda Limited is a public limited company engaged in the manufacturing, marketing and distribution of motorcycles and associated goods in Pakistan under the globally renowned brand name Honda, and is the registered owner of the trademark HONDA and its wing device logo (Figure 1).

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The version of the wing device that the complainant uses was launched in 1988.

The respondents are also engaged in the manufacturing, assembling and distribution of motorcycles in Pakistan, marketing their motorcycles under the respective brand names of JINAN, PAK HERO, UNITED SEVEN STAR and SHINE STAR. Along with their respective brand names, all three respondents use the wing device logo or variations thereof.

Issues

The Competition Commission had to consider whether:

  • the respondents resorted to the unauthorised and fraudulent use of the complainant's distinctive and registered logo on their products to mislead consumers regarding the origin of the products; and
  • such conduct amounted to the distribution of false or misleading information capable of causing harm to the business interests and goodwill of the complainant under Section 10 of the Competition Act.

Analysis

With regard to the "fraudulent use of another's trademark, firm name or product labelling or packaging" constituting a deceptive marketing practice under Section 10(2)(d) of the Competition Act, the Competition Commission observed that a strong likelihood of confusion among targeted consumers along with free riding on the goodwill attached to another's mark is essential to determine the existence of a deceptive marketing practice through the fraudulent use of another's trademark. As such, the commission focused on the nature of the accused parties' conduct and its effects on competition in the market (as opposed to recognition of the complainant's IP rights).

In light of its observations and the facts presented, the Competition Commission concluded that from the objective viewpoint of targeted consumers purchasing motorcycles through specialised distribution channels:

  • there was no significant likelihood of deception; and
  • the respondents had not resorted to the unauthorised or fraudulent use of the complainant's logo under the meaning of Section 10 of the Competition Act.

The commission's reasoning was as follows:

  • At first glance, certain striking similarities exist between the logos in terms of the overall shape and design of the wings; however, when viewed in isolation and when further attention is paid to the mark as a whole, the parties' respective brand names affixed at the bottom of their logos render the marks distinctive from each other.
  • While the wing device that Pak Hero Industries used was strikingly similar to the complainant's former logo (used before 1988), there is no perception of unfair competition or a potential distortion of completion in the relevant market, as the complainant has ceased to use the logo.
  • Shafique and Sons and Pak Hero Industries replaced their objectionable logos and committed to refrain from using them in future and instead use their respective brand names with their revised logos on all products and promotional material.
  • United Motors Company sells its motorcycles through an exclusive chain of authorised distributors and dealers and, as such, the likelihood of confusion among the targeted customers is negated. However, the commission recommended the use of its brand name along with its existing logo.

Decision

Based on the above, the commission decided that the respondents' conduct and their use of the objectionable logos did not amount to "the distribution of false or misleading information, which is capable of harming the business interests" of the complainant under Section 10(2)(a) of the Competition Act.

For further information on this topic please contact Sanaya Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email (sanaya.vachha@vellani.com).

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