Decision No. 806/13.07.2010 of the Commission on Protection of Competition

7Claimant: Orgahim AD
Defendant: Megahim AD – client of IP Consulting Ltd.

The Commission on Protection of Competition (CPC) has started proceedings on correspondence No CPC 169/04.03.2010 on the grounds of Article 94 (1) in relation to Article 38 (1), point 3 from the Protection of Competition Act (PCA) on demand by Orgahim AD, Rouse, against Megahim AD, Rouse, to ascertain the fact of eventual infringement of rights related to Article 31 and 33 in relation to Article 32 from PCA, enacting ceasing of the infringement and imposing the sanctions provided for in the law.

Essence of the claim: Orgahim AD (the claimant) claims that it is an enterprise with more than 100 years of history (established in 1901) and that is has won recognition as one of the largest manufacturers of paints, lacquers, enamel lacquers, etc. with the following trademarks “Fasagen”, “Hemelikon”, “Leko”, “Interin”, “Emanel”, “Blago”, etc. The claimant Orgahim AD points that Megahim AD undertakes rival activity on the market by offering lacquer-paint products – paints, lacquers, coloring agents, diluents, etc. The claimant also considers the assertions that certain products paints and lacquers from the ones manufactured by the defendant consist of Teflon pointed in an advertisement by Megahim AD, aired during January-August 2009 on bTV, Nova TV, Diema, Diema 2 untrue and points out that Orgahim AD has offered paints and lacquers ascertained to consist of Teflon since 2007.  On 12.07.2010 Orgahim AD files a request with two additional claims: Marketing Communications OOD to be constituted as litigant and an expertise to be appointed to check the technological documentation of the opposite party related to the manufacturing of paints and lacquers by giving an answer to the question “whether there is polytetrafluoroethylene (PTFE) in the paints and lacquers from the “Teflon” series of Megahim AD and in case there is, whether the invested quantity is enough in order to lead to the advertised results.

Position of Megahim AD: The products from the “Teflon” series are developed by Megahim AD together with E.I.du Pont de Numerous Company (referred to hereinafter as DuPont) – a company with 206 years of history. One of the internationally known brands of DuPont is TEFLON – a name, protected as a trademark in Bulgaria, the European Community and different countries all over the world. The defendant claims that the TEFLON technology does not necessarily mean usage of the Teflon compound, but represents a certain technological result –  improvement on the ability for easy cleaning and increasing the resistance to staining of the holding having in mind that this result cannot be achieved only through PTFE, as alleged by Orgahim AD on several occasions. As far as the advertisement campaign is concerned Megahim AD points that the manufacturing of co-products with DuPont is related to the beginning of the advertisement campaign with the purpose to draw the attention of the public to the newly developed product series under the brand TEFLON. The usage of the trademark TEFLON in the advertisement serves to identify the goods and services. Megahim AD contend that the advertisement campaign does not lead astray.

Legal conclusions: It is obvious from the printed materials from the website of Megahim AD presented by the claimant as well as from direct access by CPC that the presentment of the products of the defendant with the trademark Teflon is legitimate and according to the requirements laid down in a lease contract between DuPont and Megahim AD. The presented by Orgahim AD Protocol by the University of chemistry, technology and metallurgy, which the claimant considers indisputable proof of its claim that the paints produced by Megahim AD do not contain PTFE, has been rebutted by a specialist in analyses at DuPont. CPC holds that the process advertisement does not lead astray in relation to Article 33 PCA. Therefore as far as there is no proof for the misleading character of the advertisement, the advertiser shall remain out of liability.

D E C I S I O N     O F     C P C

  1. THERE HAS BEEN NO INFRINGEMENT OF THE RIGHTS stipulated in Article 31 from PCA by Megahim AD.
  2. THERE HAS BEEN NO INFRINGEMENT OF THE RIGHTS stipulated in Article 32 (2) in relation to Article 33 (1) from PCA by Megahim AD.