Africa is the world’s second-largest continent. It covers nearly 12 million square miles – approximately one-fifth of the earth’s land area. Including the surrounding islands, Africa comprises almost 60 territories, with a population of more than 1 billion people.
After decades of stagnant economic growth, in recent years Africa has seen a remarkable resurgence. With a forecasted growth of approximately 6% for the next two years (according to the International Monetary Fund), Africa is the fastest-growing region in the world (ahead of East Asia in eight of the past 10 years, according to The Economist). Linked to this economic growth has been a massive growth in counterfeits throughout Africa.
This chapter concentrates on anti-counterfeiting measures and developments in Kenya, Mauritius, Tanzania and Uganda.
Kenya is the only country in East Africa with a specific anti-counterfeiting law. The Anti-counterfeit Act (13/2008), which came into force on July 7 2009, was established to combat the prolific trade in counterfeit goods in Kenya. Previously, trademark owners had to rely on either civil remedies, including trademark infringement and passing off, or criminal remedies, which were available under various pieces of legislation including:
- the Trade Descriptions Act;
- the Standards Act; and
- the Customs and Excise Act.
However, these acts were entirely inadequate and lacked effective mechanisms, procedures and penalties appropriate for combating trade in counterfeit goods.
The Anti-counterfeit Act enables owners of rights protected under the Copyright Act, the Seeds and Plant Varieties Act, the Trademarks Act and the Industrial Property Act to take action against counterfeits of their products and provides streamlined and effective enforcement measures for achieving this end. It also brings Kenya substantially into compliance with certain provisions of the Agreement on Trade-Related Aspects of IP Rights, to which it is a party.
The act also established the Anti-counterfeit Agency, based in Nairobi, which is responsible for the functioning of the act and, on a practical level, is primarily responsible for the organisation of raids and the detention and seizure of counterfeit products. The members of the agency and other inspectors – which include police officers, authorised customs officers and inspectors appointed under the Standards Act and the Weights and Measures Act – have the power to search and enter premises with a view to seizing counterfeit goods. These inspectors may also arrest, without a warrant, anyone who is reasonably suspected of committing an offence under the act. Any goods seized by an inspector should be sealed and stored, subject to several technical requirements. Anyone aggrieved by the actions of an inspector may, at any time, apply to the courts for an order that the goods be returned to him or her. Where goods are seized by an inspector, those shall be returned unless the party from whom they were seized is charged with an offence under the act.
In addition to the independent powers granted to inspectors to search and enter premises, a rights holder may lodge a complaint with the executive director of the Anti-counterfeit Agency, providing all the information necessary to satisfy him or her that an offence has been committed under the act. If the executive director is satisfied that the complaint is legitimate and complies with the act’s other requirements, he or she shall order an inspector to search and enter the identified premises with a view to seizing the counterfeit goods.
The rights holder may also apply to the customs commissioner in the prescribed manner to seize and detain suspected counterfeit goods. Under the act, the commissioner is obliged to respond to applications within three working days.
Customs will not open suspect containers, take photographs or collect samples of the offending products until a court order is obtained. Court orders normally take approximately four weeks to obtain. Once obtained, representatives of the relevant parties – including a representative of the rights holder which can verify whether the goods are counterfeit – should be present when the container is opened. If the goods are confirmed to be counterfeit, Customs will issue a written report and notify the importer that unless it applies to court, the goods will be forfeited and destroyed.
In practice, Customs has proved to be ineffective, notwithstanding the specific provisions of the Anti-counterfeit Act. Despite the prevalence of counterfeits, surprisingly few are seized by Customs and even fewer are subsequently detained and destroyed. Despite the fact that, on the face of it, Kenya has a perfectly adequate law for dealing with counterfeits, its effect has been greatly compromised by the serious lack of resources and infrastructure, which is exacerbated by a lack of will among many of the main protagonists. However, the agency itself, while under-resourced, appears to be doing all in its power to execute its own duties, and indeed has had many successes.
The most effective action that can be taken against counterfeits in Mauritius is recording the affected trademark with Customs, which is particularly efficient and certainly the most effective in the region. Customs watch notices are governed by Section 66 of the Customs Act. The provisions of this section, and in particular Sections 66A and 66B, were considered recently by the Supreme Court in The Polo/Lauren Company, LP v Mohammad Naushad Tejoo (SCR No Co 372/11). The plaintiff had applied to Customs, under Section 66, for the detention of an unauthorised shipment of goods that infringed its registered trademark rights. Pursuant to this application, Customs had seized and detained a substantial shipment of goods, imported by the defendant, which bore the plaintiff’s registered trademarks.
The plaintiff claimed that the defendant had infringed these trademark rights in terms of Section 40 of the Patents, Industrial Designs and Trademarks Act 2002 – in particular, Sections 40(3) and 40(5):
40(3) Any registered owner may, where the use of any sign similar to the registered mark or in relation to goods and services similar to those for which the mark has been registered, is likely to cause confusion in the public, institute court proceedings…
40(5) The rights conferred by registration of a mark shall not extend to acts in respect of articles which have been put on the market in Mauritius by the registered owner or with his consent.
The defendant objected on a number of technical points, including the following:
- Counsel for the defendant was not authorised to act;
- It had not been proved that the plaintiff was the owner of the registered trademarks;
- The plaintiff had not complied with Section 66A of the Customs Act; and
- The seized goods did not infringe the plaintiff’s registered trademark rights.
All of the defendant’s arguments were summarily dismissed by the court.
Within the context of this chapter, it is useful to summarise the court’s decision insofar as it related to the procedural aspects of Section 66, as well as infringement under Section 40 of the Patents, Industrial Designs and Trademarks Act.
In respect of Section 66 of the Customs Act, the defendant argued that the trademark owner had not requested the suspension of clearance of the imported goods. In dismissing this argument, the judge gave a useful summary of that section.
Section 66A(1) of the Customs Act provides that “any owner or authorised user of a collective mark or mark or copyright may apply in writing to the director-general to suspend the clearance of any goods imported or being exported on the grounds that his collective mark or mark or copyright is being or is likely to be infringed”. Section 66A(2) states that “an application made under subsection (1) shall specify a period not exceeding two years during which the director-general may suspend the clearance of goods”.
Further, the application must be accompanied by:
- evidence that the applicant is the owner or authorised user of the collective marks, mark or copyright (Section 66A(3)(a));
- a statement of the grounds for the application and prima facie evidence showing that its rights have been or are likely to be infringed (Section 66A(3)(b)); and
- particulars relating to the description of the goods, making them readily recognisable by Customs, and the place where such goods are to be found (Section 66A(3)(c)).
The applicant must provide adequate security to protect the director general from any loss or damage that may result from the suspension of clearance of the goods and to cover any reasonable expenses that are likely to be incurred as a result of such suspension (Section 66A(4)). Under Section 66B, the director general shall, on receipt of the application, either grant or reject it within four days and inform the applicant in writing. Under Section 66A(3), where the application is granted, the director general shall notify the importer, exporter or its agent in writing of the suspension of the clearance of the goods.
The judge found that the plaintiff had complied with Section 66, and that therefore Customs had properly detained and suspended for clearance the defendant’s shipment of goods.
This judgment is under appeal.
While there is no specific anti-counterfeiting legislation in Tanzania, the Merchandise Marks Act and its regulations contain specific provisions for dealing with counterfeits. The Merchandise Marks Act, read with the Merchandise Marks Regulations 2008, makes it an offence to deal in or manufacture counterfeit goods.
The act also gives appointed inspectors the power to enter without warrant and inspect any premises in which they have reason to believe that an offence against the act has been or is about to be committed, and to:
- examine goods and all books, accounts and documents relating thereto;
- take samples of any goods, and take copies of any book, account or document as aforesaid, or part thereof;
- seize, remove and detain any goods which they have reasonable cause to believe may afford evidence of an offence against the act, and any container, receptacle, book, account or document relating thereto; and
- require any occupant of such premises to render such explanations and give such information relating to any goods therein as may be reasonably required by such inspector or officer in the performance of his or her duties.
In addition, the act gives the Fair Competition Commission the powers to identify, seize and destroy counterfeit products.
The commission will, on being informed by Customs, confiscate counterfeit goods, and after investigation has the power to destroy those products.
While the Fair Competition Commission and the Merchandise Marks Act appear to be reasonably fit for purpose, the resources available to the commission are modest. Customs is also seldom proactive and generally has been ineffective in identifying counterfeits or indeed notifying the commission of such counterfeits entering the Tanzanian borders.
While Uganda is considering a Counterfeit Goods Bill, which should be substantially similar to the equivalent Kenyan law, the only existing laws dealing with counterfeits are the Penal Code and the Trademarks Act 2010. In terms of Section 71 of the Trademarks Act, “any person with an intention to defraud or to enable another to defraud any person, forges or counterfeits a trademark commits an offence and is liable on conviction to a fine or imprisonment not exceeding two years or both”. Inspectors, including police officers, may, at any reasonable time, enter any premises, ship, aircraft or vehicle for the purpose of ascertaining whether there are any counterfeits therein.
Section 74 of the act specifically states that an inspector may inspect:
- a substance or article appearing to be an infringing trademark;
- a container or package appearing to be used or intended to be used for infringement; or
- a plant or equipment appearing to be used or intended to be used in connection with the production, reproduction or other manufacture of an infringing trademark.
The act provides substantial powers to inspectors to seize and detain, among other things, counterfeit goods. Crucially, inspectors are protected from personal liability and therefore should not be inhibited in the execution of their duties.
An owner or registered user of a trademark which has reasonable grounds to suspect that goods are being imported that infringe its rights may lodge an application with the court or any other competent authority for the seizure by Customs of those goods. The term ‘competent authority’ is not defined, but as inspectors have the right to seize and detain counterfeits, it is assumed that such inspectors would have the authority to seize counterfeit goods at Customs. The court or such other competent authority must inform the applicant (the rights holder) within a reasonable period whether it has accepted the application and the period within which Customs should take action.
The act therefore provides substantial administrative powers to the appointed inspectors to take action against counterfeits, but criminal proceedings are also possible in terms of the Penal Code.
Provisions dealing with counterfeits can also be found in Sections 377 to 380 of the code.
Section 378 prohibits any person from forging or counterfeiting any trademark or from using a trademark on any goods which do not originate from the trademark owner.
Section 379 prohibits the sale of counterfeit goods unless the seller can show that it has taken all reasonable precautions against committing an offence or it had no reason to suspect the authenticity of the mark. This section also provides that any goods or products to which a counterfeit trademark was attached or packed in a container bearing a counterfeit trademark are to be forfeited.
Section 380 provides that goods which infringe the Penal Code should be forfeited.
Although the Ugandan anti-counterfeiting laws are not perfect, the main issue – as with the region as a whole – is a lack of resources, infrastructure and will to tackle the problem seriously. That said, Ugandan Customs periodically does proactively seize and detain suspected counterfeit consignments; but in order for those goods to remain detained and subsequently destroyed, a court order is necessary, which can be an extremely onerous and expensive process, making it in many instances impractical as a tool to deal with counterfeits.
The past few years have seen unprecedented economic growth in Africa, as well as considerable growth in the import of counterfeits into Africa. Matching those developments, there have been substantial legislative and judicial developments in much of the continent and its surrounding islands. However, much more needs to be done, particularly to educate and build up an effective enforcement infrastructure.
This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.