CCP imposes pkr 45 million penalty on two snack food sellers for deceptive marketing practices

ISLAMABAD: The Competition Commission of Pakistan (CCP) has passed an order imposing a total penalty of PKR 45 Million on two snack food (Nimco) sellers for copying the registered trademark and other designs of another company and violating Section 10 of the Competition Act, 2010.

“Nimco Corner” sent a complaint to the CCP that its registered trademark, firm name, and product packaging, were being fraudulently used by “Mr. Nimko Corner” and “Karachi Nimco.” Nimco Corner claimed to be the sole proprietor of the registered name ‘NIMCO’ since 1947, as well as, distinctive logos and packaging.

The CCP’s enquiry established that Mr. Nimko Corner and Karachi Nimco had violated Section 10 by imitating the trademark, packaging, color scheme, design and get up of products of Nimco Corner. On the enquiry’s recommendations, show causes notices were issued to two companies.

During the hearings, Mr. Nimko Corner failed to appear before the bench despite several reminders. The bench found that Mr. Nimko Corner had committed severer violation by using the identical colour schemes, taglines, shapes, patterns, and the firm name of Nimco Corner. It also copied the exact taglines, their placement, graphical patterns and font style thus giving an impression of being associated with Nimco Corner.

The bench observed that Mr. Nimko Corner instead of investing in developing its own brand, opted to free ride on the trademark, “NIMCO” owned by Nimco Corner. It clearly violated Section 10 by imitating the trademark and packaging material of the complainant.

Similarly, the bench also found Karachi Nimco of violating Section 10 by using the word “NIMCO” in its branding and also copying the firm name and packaging of Nimco Corner.

While rejecting the objections raised by Karachi Nimco’s counsel, the bench held that under Section 59 of the Competition Act, the Act shall have an overriding effect on any other law for the time being in force, which inter alia includes the Trademark Ordinance.

The CCP’s order noted that during enquiry as well as proceedings before the Commission the two companies have admitted the use of M/s Nimco Corner trademark and trade dress and instead of correcting their behaviour were justifying their conduct by raising misplaced and unsubstantiated submissions.

The CCP imposed a penalty of PKR 25 Million on Mr. Nimko Corner and PKR 20 Million on Karachi Nimco for violating Section 10 of the Competition Act and directed the companies to cease and desist from the use of word “NIMCO”, trademark, trade dress and packaging material similar to that of the M/s Nimco Corner. The two companies were also directed to repackage their products to distinguish them from the products of M/s Nimco Corner.

CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity, to ensure economic efficiency and to protect consumers from anti-competitive practices indulging deceptive marketing.

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