CAT upholds CCP's Rs5m penalty on Irshad Trading for deceptive marketing

May 24, 2024 (MLN): The Competition Appellate Tribunal (CAT) decided to uphold the Rs5 million penalty imposed by the Competition Commission of Pakistan (CCP) on Irshad Trading Corporation for deceptive marketing practices.

The penalty was imposed by CCP on Irshad Trading for fraudulently using its competitor, Polycon Pakistan (Pvt.) Limited’s trademark, violating Section 10 of the Competition Act, 2010.

Polycon lodged a formal complaint with the CCP, alleging that Irshad Trading Co. was unlawfully using its registered trademark and brand name to manufacture, market, and sell water storage tanks, and was also misrepresenting itself as a joint venture of Polycon.

The CCP’s enquiry committee established the violation of Section 10 by Irshad Trading.

During the proceedings, Polycon confirmed that Irshad Trading had been its authorized distributor until September 2018, after which the distribution agreement was terminated.

Despite the agreement’s termination, Irshad Trading continued to manufacture, market, and sell products with Polycon's logo until February 2019.

Irshad Trading stopped the practice after the CCP’s show cause notice, but the unauthorized use had already harmed Polycon’s business interests.

Irshad Trading admitted to the violation, citing a lack of awareness of copyright laws and Section 10. They admitted having manufactured water tanks using Polycon’s trademark after the termination of the distribution agreement.

Taking a lenient view in light of Irshad Trading's commitment to refrain from such deceptive marketing practices in the future, CCP imposed a penalty of Rs5m and directed the company to cease using Polycon’s trademark, trade name, and products.

Although Irshad Trading challenged the CCP’s order in CAT, it failed to appear before the Tribunal on the scheduled hearing dates, leading to the dismissal of the appeal for non-prosecution.

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