Your options in the fight against counterfeit goods

Counterfeiters have for many years taken advantage of technological challenges in developing countries. FILE PHOTO | NMG

By CATHY MPUTHIA
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Summary

• Kenya is one of a few countries globally that has a stand- alone anti-counterfeit law and an anti-counterfeit Agency.
• Yet despite the existence of legislative and institutional framework, Kenya still has high levels of counterfeiting.
• The law relates counterfeiting to intellectual property rights, which means it is easier to recover against counterfeiters if you have an intellectual property right.

Kenya is one of a few countries globally that has a stand- alone anti-counterfeit law and an anti-counterfeit Agency. Yet despite the existence of legislative and institutional framework, Kenya still has high levels of counterfeiting. The law relates counterfeiting to intellectual property rights, which means it is easier to recover against counterfeiters if you have an intellectual property right.

Counterfeit has been defined to include manufacturing and repackaging of imitated goods such that consumers are confused. It also includes manufacturing or making unauthorised copies without consent of the intellectual property owner. Counterfeit marks are often similar to the genuine marks.

Other than the stand-alone Anti-counterfeit Act, counterfeiting legal environment includes a series of other laws like the consumer laws, intellectual property laws, torts laws, criminal laws and common law. There are, therefore several avenues through which counterfeiting can be stopped.

Counterfeits are extremely harmful to the consumer. Counterfeited goods are often also illegal as they aren’t subjected to regulatory testing and standards such as testing by the Kenya Bureaue of Standards. Consumers who knowingly or unknowingly consume counterfeits endanger their health and safety.

Counterfeiting is disadvantageous to the government in terms of uncollected taxes and revenues. Counterfeiters operate in darkness, as a result they often don’t pay taxes therefore denying the government revenue in tax. Investors are also discouraged from investing in countries where counterfeiting is rampant as they stand to suffer damage to business from the illegal works of counterfeiters.

Counterfeiting is harmful to the genuine intellectual property rights owner. Counterfeits eats into his market share and damage a genuine product’s reputation. The only one who benefits from counterfeits is the counterfeiter. In this article I want to demonstrate how different categories of persons can address counterfeits and counterfeiters.

The first category is the consumer. The Constitution and the Competition Act 2010 guarantee consumers a high level of consumer welfare. Under Section 55 of the Competition Act, it is an offence to mislead or lie to consumers about the quality of goods or that goods are new.

Under the same law, the Competition Authority of Kenya is required to publish a warning to the public of the dangers of consuming counterfeited sub-standard goods.

The Authority may also require a counterfeiter to recall sub-standard goods, disclose the defects and dispose off the goods.

Under the law, a consumer can recover damages in court, for any injuries or losses sustained due to consuming harmful counterfeits.

A genuine intellectual property rights owner aggrieved by counterfeiting has recourse against the counterfeiters through enforcement mechanisms in the Anti-counterfeit Act.

The law gives wide powers to the Anti-counterfeit Agency to fight counterfeiters. Inspectors appointed under the Act have powers to enter and inspect premises where there is suspected counterfeiting. Their powers include seizing the counterfeits and tools used to make them and arrest suspected counterfeiters provided good legal grounds. Suspected counterfeiters can be criminally prosecuted, meaning it is a crime to counterfeit.

A genuine holder of intellectual property rights can lodge complaints against counterfeiters. The penalty for counterfeiting includes a jail term not more than five year or a fine not less than three times the value of counterfeited goods.

If you are a consumer injured by a product you later found out to be a counterfeit you can report the same to the authority or file a court action against the seller.

Similarly, if you are a manufacture and hold intellectual property rights, you can lodge a claim at the Anti-Counterfeit Agency for criminal persecution of the counterfeiter.