The Competition Appellate Tribunal (CAT) recently cleared SCHOTT India from all penalties and charges made according to an appeal made by Kapoor Glass along with other domestic converter companies. It is understood that the companies had accused SCHOTT India of abusing its strong position in the glass tubes market by granting discriminatory pricing and other favourable terms to its affiliated entity, SCHOTT KAISHA as compared to other converters in the market.
Interestingly, after an initial judgment of the CCI which went against SCHOTT India, the case was referred to CAT. In its judgment, the tribunal pointed out that SCHOTT KAISHA was a vertically integrated subsidiary of the SCHOTT group and that the quantity purchased by SCHOTT KAISHA by far exceeded the purchases of any other converter company. The tribunal also clarified that there was no negative impact on the downstream market for glass tube containers and that the ultimate consumer did not suffer any damage as alleged in Kapoor Glass’s appeal.
In July 2010, Kapoor Glass, a converter and former manufacturer of glass tubes, filed information with the Competition Commission of India (CCI) alleging anti-competitive practices by SCHOTT India affecting the competition in the market for neutral USP type I borosilicate glass tubes as well as in the downstream market for the containers.
The Tribunal refuted CCI’s initial ruling that favourable prices of SCHOTT India for SCHOTT KAISHA had resulted in reduced profit margins for the other converters and deprived them of their chance to grow. In addition, it rejected the allegations by Kapoor Glass that SCHOTT’s standard trademark license agreement was unfair and restrictive to the detriment of other converters.
In its judgement, CAT clearly denied any obligation of SCHOTT India to make deliveries to Kapoor Glass, which had been stopped in 2008. The Tribunal established that Kapoor Glass had once forged SCHOTT India’s labels and thus committed a clear and unabashed breach of trademarks. It condemned such act of forging as the relevant products had a direct relation with human lives and serious consequences could ensue on account of usage of inferior quality of glass tubes. The Tribunal stated that it could not imagine the seriousness of the consequences if Kapoor Glass could pass off inferior quality glass with the help of such faked labels.