Ranchers vs Zakori Group International

Intellectual Property Rights infringement trademark

Dispute between two parties on trademark

Case Summary
CEO Ranchers Ahmed Raza and CEO of Zakori group Ayoub Khan were once business partners
who entered into a joint venture to promote and develop international franchises. They formed a
partnership firm named Zakori International and successfully operated two brands in Pakistan “,
Mr. COD and “Ranchers”.
Both CEO jointly agreed to promote business and to use the Ranchers trademark. Zakori group
without concern of business partners granting master franchising rights for the trademark
"Ranchers."
Additionally, the respondents incorporated a private limited company named "Ranchers Cafe
(Pvt.) Ltd." for the same business conducted by the Ranchers and Zakori group under the
trademark "Ranchers." The use of the trade name "Ranchers" by the company is considered an
infringement under section 40 of the Ordinance 2001.

Dilemma
Zakori group international to promotes the entrepreneur startup to develop their business ,
managing and Ranchers café provides quality food and services. Both are business partners.
However, the conflict arose when Zakori Group, without the consent of Ahmed Raza, granted
master franchising rights for the trademark "Ranchers" to another party named Messrs. Royal
Manor. This action violated the Trade Marks Ordinance, 2001, specifically section 24(5), which
restricts such granting of rights without the consent of the trademark co-owners.
Zakori Group incorporated a private limited company called "Ranchers Cafe (Pvt.) Ltd." for the
same business conducted by Ranchers and Zakori Group under the trademark "Ranchers." This
use of the trade name "Ranchers" by the company was considered an infringement under section
40 of the Ordinance 2001.
The Intellectual Property Tribunal returned the plaint, stating that since the trademark had not
been physically used by the third party in the course of trade, the suit was not maintainable
under the
Trade Marks Ordinance, 2001. The tribunal also stated that since the dispute was between the co-
owners of the trademark, it could not be agitated before the tribunal.
As per the Harvard’s Law Review, Volume 48 (1954 – 1955)
“In essence, a trademark owner is protected from the use of his mark by another
party in a way that could influence consumers to associate that party's products
with the trademark owner's. This defense against trademark infringement, or the
prohibition against passing off someone else's goods as the owner's by using the
owner's mark, may be referred to as a defense against passing off.”

Both parties agree on a joint

venture Terms and conditions:
• Partnership agreement between CEO Ahmed Raza and CEO of Zakori group
Ayoub Khan. Ayoub khan said to conduct the business of promoting, developing,
and managing i
• Partnership firm was formed and registered by named of Zakori International and
Thepartnershipg two successful brands in Pakistan namely “Mr.COD” and “Ranchers”.
• Its Joint venture partner in respect of the franchise restaurant operated by it under the
name and style of “RANCHERS”

Court
Both party arguments
Breach contract Zakori group her Business Partner Ranchers Café brand image
damage and goodwill .
Zakori International granted Messors Royal Manor a limited license and franchise for
operating a “ Ranchers” restaurant in sectors 1-8 Markaz Islamabad. Zakori International
without the consent of Rancher entered into a tripartite joint venture agreement with
Messrs Royal Manor. The further license was extended without the consent of Ranchers (
joint partner) Zakori International and Ranchers clearly infringed the registered
trademark jointly owned. Clear restrictions are imposed by subsection (5) and section
(24) of the ordinance 2001. Zakori International conducted the same business under the
trademark of Ranchers café (PVT)LTD. Gives the intellectual property tribunal
jurisdiction over passing off actions which can either be a passing off action simpliciter
or an action of infringement
 of the trademark coupled with passing off where the case of passing off action is based on
infringement of trademark such suit shall necessarily require determination of the
question whether there had been any infringement of the trademark and where the
infringement of the trademark is alleged the suit must in the view section 17,18, and 39 of
the intellectual property of organization of Pakistan act 2012 instituted before tribunal
notwithstanding the allegation in the suit were coupled with the allegation of passing off.
Both parties argue Afnan Karim advocate supreme court and Syed Rifaqat Hussain
advocate on record for the petitioner. Zia ur Rehman Advocate supreme court and
Mansoor Sharif advocate on the recorder of respondents RS 10 million for causing a loss
injury and damage to the goodwill and reputation of the registered trademark of the
Ranchers Cafe owners and for a rendition of the account by the Zakori group for the
profit wrongfully made by them from the unlawful use of “Ranchers” trademark without
consent of the Ranchers partners.

COURT DECISION
The court held that the respondent's actions of granting master franchise rights and incorporating
a company using the trademark "Ranchers" without the partner's consent were clear violations of
the Trademarks Ordinance, 2001. These acts fell within the jurisdiction of the Intellectual
Property Tribunal as per the Intellectual Property institution of Pakistan Act, 2012. The case
was remanded to the tribunal to further continued in accordance with the law.
The court also discussed the scope of infringement of a registered trademark and passing off
under the Trade Marks Ordinance, 2001.
Ranchers’ case fell within the jurisdiction of the Intellectual Property Tribunal, and the acts
complained of were actionable under the Trade Marks Ordinance, 2001

The Intellectual Property Tribunal (the "tribunal") returned the CEO of Ranchers Raza
Ahmed plaint filed against the infringement of a registered trademark "Ranchers," for a
perpetual injunction holdback the defendants CEO of Zakori group from using the said
trademark, as being not maintainable before the
tribunal in this case. The Single Judge of the Islamabad High Court dismissed the petitioner's
FAO against the order passed by the tribunal.

The Ranchers CEO Ahmed Raza entered into a partnership agreement, according to the
averments, in order to pursue the business of marketing, developing, and managing foreign
franchises. In this way, Zakori International, a partnership firm, was established and registered. It
now manages the well- known brands "Mr. COD" and "RANCHERS" in Pakistan. In the joint
name of the petitioner, the trademark "RANCHERS" is registered and party no 1. It is also said
that in accordance with the provisions of the franchise agreement, M/S Royal Manor was given a
restricted license and franchise by Zakori International to run a "Ranchers" restaurant in Sector
1-8 (Markaz), Islamabad. However, Ranchers café CEO Ahmed Raza entered into a tripartite
joint venture agreement ("JVA") on behalf of Zakori International without the Ranchers CEO
consent regarding the franchise restaurants it operated under the name and style of "Ranchers,"
with M/S Royal Manor and one Afnan Shareef, the Party No.
2. Zakori International allegedly agreed to grant master franchise rights regarding "Ranchers"
under the terms of the said JVA. The petitioner claimed that Zakori International's participation
in the aforementioned JVA would not have been possible without the petitioner and Party No. 1
jointly owning the registered trademark "RANCHERS," which the Party No. 2 blatantly violated
by unilaterally granting the agreement to Party No. 2 the right of master franchising of
"RANCHERS" without the petitioner's consent. Additionally, this went beyond the bounds of the
law because subsection (5) of section 24 of the Trade Marks Ordinance 2001 clearly restricts it.
Additionally, the Parties Nos. 1 and 2 established a Private Limited Company called "Ranchers
Café (Pvt.) Ltd." as Party No. 3 to do the same business as Zakori International under the
"Ranchers" trade mark.

According to Order VII, Rule 10 of the C. P. C., the Tribunal returned the complaint on
the argument that the suit cannot be maintained because Party No. 2 has not actually used the
trademark in the course of their business, as required by Sections 46(1) and (2) of the Ordinance,
2001, and that, because the dispute involves the Party No 1 and another co-owner of the
trademark, no violation of Sections 23(5) read with 69 of the Ordinance, 2001, may be brought
before the Tribunal.

The Court determined that Party No. 1 had granted master franchise rights for the in-
question trademark to the third party without the petitioner's agreement after hearing the
arguments
of the solicitors and reviewing the pertinent statutes. It was obviously against provision 24(6) of
the Ordinance, 2001, which gave the disgruntled co-proprietor (Petitioner) the right to file a
complaint for infringement. According to sections 24 and 40 of the Ordinance, 2001,
respectively, the use of the name "Ranchers Cafe (Pvt.) Ltd." by the company formed by the
Party and a third party was a clear violation of the registered trademark "Ranchers" and was
therefore actionable under those provisions. Thus, it is unquestionable that the petitioner's case
fell within the tribunal's exclusive jurisdictional ambit as defined by sections 17, 18, and 39 of
the Intellectual Property Organization Act, 2012. the case was remanded to the tribunal and the
petition for leave to appeal was changed into an appeal and approved.
Affected party CEO argument
Ahmed Raza, as the petitioner, sought a perpetual injunction restraining the defendants
(Zakori Group and the third party) from using the "Ranchers" trademark. He also claimed
damages of Rs 10 million for the loss of business , injury and damage caused to the not maintain
Ranchers quality and Standard , reputation of the registered trademark.
The Intellectual Property Tribunal initially dismissed the plaint, stating that the suit was not
maintainable under the Trade Marks Ordinance, 2001, as it involved co-owners of the
trademark. However, the Islamabad High Court overturned this decision and held that the actions
of the Zakori Group constituted clear violations of the trademark laws. The case was remanded
to the tribunal for further proceedings.

In this ongoing legal battle, CEO Ahmed Raza seeks to protect the brand image and business of
Ranchers, while CEO Ayoub Khan of Zakori Group faces allegations of breaching the
partnership agreement and causing harm to Ranchers' trademark rights and reputation.

Conclusion
CEO of Ranchers Ahmed Raza Vs CEO of Zakori group Ayoub Khan this dispute on the breach
of a partnership Contract and the infringement of intellectual property rights of trademark .The
issue arise when Zakori Group granted master franchising rights for the "Ranchers" trademark
without the permission of their business partner, Ranchers. This violated trademark laws and led
to the incorporation of a company
using the same trademark, further damaging Ranchers' brand image and business. The court held
that Zakori Group's actions were clear violations of the Trade Marks Ordinance, 2001, and
remanded the case to the Intellectual Property Tribunal for further proceedings. Ultimately, this
case highlights the importance of protecting intellectual property rights and maintaining the
integrity of business partnerships.

Recommendation
Unethical practice without concern of partners. zakori group should be asked to her business
partner when entering into a new agreement of license to 3rd party.
Case : Questions
1. What were the terms and conditions of the joint venture agreement between Ahmed Raza
and the Zakori Group?
2. Why did the Intellectual Property Tribunal initially dismiss the plaint filed by Ahmed
Raza?
3. What was the decision of the Islamabad High Court regarding the case?
4. What were the arguments presented by Ahmed Raza as the affected party?
5. What jurisdiction did the court determine the case fell under?
6. What were the grounds on which the court found the actions of the Zakori Group to be in
violation of the trademark laws?
7. What was the outcome of the case and what further actions were taken?
8. What is the significance of the Trade Marks Ordinance, 2001, in protecting trademark
rights in Pakistan