The growing number of counter-feit goods in South Africa is a significant challenge for businesses and consumers.
Specialist international intellectual property (IP) law firm Spoor & Fisher partner Paul Ramara says that the latest trend in counterfeiting is producing fake products centred around the 2010 FIFA World Cup theme, and South Africa, as the 2010 FIFA World Cup host, has been targeted for these counterfeit goods.
“Counterfeiting of goods has increased, particularly sports manufacturer adidas’ soccer clothing range, owing to South Africa hosting the World Cup,” he says.
While ‘Football Fridays’ encouraged South Africans to be more supportive of their country and their team, counterfeiters see it as a way of introducing more products into the market, he adds.
Because of the efforts of the South African Revenue Service’s Customs and Excise, R105-million of counterfeit adidas goods have been seized from January to date, most of these during the import stages of the goods.
Ramara points to other goods that have been seized, which include R5,5-million of fake DVDs and CDs, R28-million in foot-wear and other counterfeit goods valued at R194,7-million.
He attributes the prevention of these goods entering the market to South Africa’s Counter-feit Goods Act No 37 of 1997, which has also contributed to the country’s progress in seizing counterfeit goods.
The Act came about as a result of South Africa’s obligation to an agreement on trade-related aspects of IP rights, better known as TRIPS. “We are in a fortunate position in that this legislation specifically deals with counterfeiting,” he explains.
Once the goods have been seized, criminal action can be taken and the penalties under the Act are severe, says Ramara. First-time offenders may receive a fine of R5 000 for each counterfeit article, three years’ imprisonment, or both.
“What most people do not realise is that Interpol has identified counterfeiting and piracy, because of the high profit margin, to be part of organised crime. It is a challenge,” he continues.
Counterfeit goods are not limited to clothing in the retail sector, but also affect the medical, pharmaceuticals and engineering-related industries.
“In 1995, 109 children died in Nigeria as a result of fake cough medication. About 20% of the pharmaceuticals on the market are counterfeit or stolen. However, only when one considers the impli- cations of supporting counter- feits, such as the death of children, cellphones exploding during use or creams causing terrible skin reactions, does one realise the magnitude of the challenge,” says Ramara.
Consumers need to be educated on the consequences of supporting counterfeit goods. “As long as there is a demand for a product and consumers are willing to buy it, there will always be counterfeiters selling the product,” says Ramara.
He adds that it would be difficult to estimate the value of the losses sustained owing to counterfeiting, as there are no exact figures available on the number of counterfeit goods in South Africa, the type of product or its selling price.
Ramara explains that specialised units have been established by the South African Police Service and the Department of Trade and Industry to assist the owners of IP rights with anti- counterfeiting law enforcement. Contact with the brandholders’ representatives can also be made for confirmation, reports or concerns.