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22 September 2016
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.
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).
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.
The Competition Commission had to consider whether:
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:
The commission's reasoning was as follows:
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.
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