Competition Appellate Tribunal in passing off dispute lawandpolicychambers

SC Upholds Order of The Competition Appellate Tribunal in passing off dispute.

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A very pertinent and highly significant judgment of the Supreme Court of Pakistan on the construction of Section 10 (2) (a) and 10 (2) (d) of the Competition Act, 2010;

Justice Mansoor Alo Shah has authored the judgment and showed respect and complete restraint to interfere with the views of the Competition Appellate Tribunal and Competition Commission while adjudicating an appeal inย  Civil Appeals No. 444 & 445 of 2017.

The Court has set many issues at rest including the meaning and the constituent ingredients ofย  passing off and injurious falsehood. The issue involved in the case was that Rahim Foods/Appellant had passed off its products as that of the Respondent, K & N Foodsย in contravention of the provisions of Competition Act, 2010. The Competition Commission after conclusion of the inquiry and subsequently the case found the Appellant guilty of violation of Section 10 (2) (a) and 10 (2) (d) of the Act. The Commission deemed it appropriate to fine the Appellant two million PKR collectively under these two provisions of the Act; one million under each. The appellant appealed against the order of the Commission to the Appellate Tribunal wherein the Tribunal set aside the order to the extent of section 10 (2) (a) saying that no direct harm to the Respondent was caused as the Appellant had not spread misleading information regarding the product of the Respondent. Thus the offence under the said section was not made out and fiNE to the tune of one millionย  imposed under the section was declared as illegal. Feeling aggrieved by the said order, Appellant and Commission both approached the Supreme Court to address their grievances.

The Court held that no entity or a person can represent the goods he is selling as the goods of the rival competitor or manufacturer. The Court also held that in our statutory law, changes have been made to the concepts of injurious falsehood and passing off by incorporating the phrase harming the business interests of another undertakingโ€™ in subsection (a). The falsehood requires malice to be its constituent and passing off requires no such intention to cause harm to the rival. However, the Act has made the sate of mind relevant in case of passing off while omitting the same in the case of injurious falsehood under subsection (a).

The Court further expounded upon the concept of confusing similarity and held that it is not necessary for the unwary purchase to be enough intelligent and vigilant to understand minute ingredients of a product. Over all impact of characteristics not the minute details of a good is sufficient toย  prove the confusing similarity between the products.

At the end of the judgment, the Court also questioned if a quasi judicial forum feeling aggrieved by the order of its appellate forum may go into appeal against such order. In short words, whether a quasi judicial forum can be said to be an aggrieved party if its order has been set aside by appellate or upper forum. The Court, to this extent, held that no tribunal or quasi judicial forum can go into appeal by holding that he is aggrieved by the order of appellate forum.

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