On May 25 2016, known as Africa Day, the African Union celebrated its golden jubilee. Africa has seen a vast increase in investment and growth over the past 50 years and many companies have already mobilised to capture the emerging demand. With the growth in investment, Africa is increasingly being targeted as a market for counterfeit goods and merchandise as a result of the urban population's growing demand for many goods that are not widely available, as well as the lack of means to buy them.
While demand for branded goods is growing and counterfeit goods are on the increase, the IP rights protection measures available to rights holders differ from country to country, but remain largely inadequate in most African countries. As a result, a 'one size fits all' anti-counterfeiting strategy cannot easily be applied or adopted to cover the key regions and territories in Africa.
Further, the market structure in Africa differs substantially from first-world markets such as Europe and America. As such, the best practices developed and applied in these territories cannot necessarily be applied in Africa in order to achieve the same results.
In order to establish effective anti-counterfeiting strategies, rights holders must understand Africa and its nuances. Although trade is growing, outside South Africa it is still narrow and underdeveloped. The most common and popular trading channels in Africa are the simple tabletop or 'spaza' shops, which are owned and managed by local entrepreneurs and set up at the side of the road or in local markets in order to capture the passing trade. These businesses are supported and supplied by an efficient and well-developed informal distribution structure. Further, informal cross-border trade is important to Africa and more than 43% of Africans are involved in this type of trade, which contributes significantly to economic growth, job creation and job security. As a result, counterfeit goods are increasingly sold, transported and distributed across African borders using these well-developed and largely uncontrolled informal trade routes.
Therefore, an effective African anti-counterfeiting strategy should focus not only on the countries relevant to brand holders, but also on neighbouring territories, taking into account the retail structure, main trade channels and distribution routes in Africa.
As an initial step, rights holders should ensure that their primary trademarks are registered both in the main countries where they offer their goods or services and in neighbouring territories. Without the existence of a registered trademark, it is almost impossible to act against counterfeiters in Africa, especially in territories where common law rights or the protection of well-known trade marks is not recognised. Copycat infringement – where infringers adopt a label imitating the original label – is on the increase. As such, consideration should be given to the registration of labels for primary products to provide statutory protection against the use of a similar label or get-up.
Although Customs remains a critical element in an effective anti-counterfeiting strategy, the relevance and success of actions by Customs differs from country to country. Not all African countries have established customs practices based on the registration of brands and the detention of suspected counterfeit goods; it is possible to record brands with Customs in only a handful of countries. Where formal customs recordal procedures are available (in South Africa, Mauritius, Ethiopia, Morocco, Tunisia and Egypt), brand holders should record their brands. In other territories, an informal strategy can be adopted to ensure the identification and support the notification of suspected counterfeit goods. This has proven to be effective in key African jurisdictions including Namibia, Zambia, Mozambique, Kenya, Tanzania, Uganda, Rwanda, Ghana and Nigeria.
However, a strategy focused on customs recordals and actions alone is inadequate, particularly as inspections and measures to stop counterfeit goods at ports, airports and borders differ from country to country. In each country it is necessary to assess and work with local police services and regulatory bodies (eg, the National Agency for Food and Drug Administration and Control in Nigeria and the Anti-counterfeiting Agency in Kenya) with the capacity and infrastructure to tackle counterfeit goods in the region.
Rights holders should also take steps to formalise and strengthen their own distribution channels in the region and across borders. Based on product demand, informal distribution channels and methods are well entrenched in Africa, facilitating the trade in counterfeit and parallel goods. Rights holders should build up their understanding and knowledge of these distribution and retail channels in order to act against key counterfeiting players. However, this takes time, money and patience. A long-term approach, with consistent, supported actions against both retailers and suppliers, should be implemented, with a view to obtaining or extracting information on the source and supply of these goods.
In each country, rights holders should adopt a zero-tolerance approach to anti-counterfeiting and take action to the full extent of the law. Where appropriate, they should institute criminal or civil proceedings against known infringers, particularly in the case of repeat offenders or where other extenuating circumstances justify the money and time needed to deal with the issue. The ongoing prosecution of offenders not only builds up a valuable body of case law, but also sends a clear message to the market regarding the severity and consequences of dealing in counterfeit goods.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.