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The impact of counterfeiting

8 Jul 2008

South African intellectual property laws have been refined over the years to afford protection to the holders of certain forms of intellectual property, including trademark and copyright holders, allowing them to take action against the counterfeiting of their products. With the advent of the 2010 FIFA World Cup not too far off, the issue of protection of intellectual property is becoming an even more pressing issue.

Counterfeit goods are, in essence, an imitation or clone of goods which embody copyrighted work, or bear the trademarks of others or are copies of an intellectual property right. These imitations would have been undertaken without the authority of the owner of the intellectual property and with wrongful intent.

In 2007, the Department of Trade and Industry's data showed that there was a colossal loss of revenue of R540 million just between the period 1 April 2005 - 31 March 2006 owing to counterfeit goods on the market. The same study revealed that, between 2003 and 2005, loss of revenue owing to fake goods was running into R2 billion. These figures are likely to be aggravated by the opportunities for counterfeiting that the World Cup will provide.

Intellectual property holders have at their disposal one of the most impressive forms of anti-counterfeiting legislation in the form of the Counterfeit Goods Act 1997 (CGA) which effectively provides for the search (if required), seizure and destruction of the counterfeit goods. The CGA is couched in fairly precise terms and provides for the criminal and civil prosecution of the infringers.

A person having an interest in protected goods, whether as an owner or agent or licensee of an intellectual property right or as an importer, exporter or distributor of protected goods, has locus standi (legal standing) to lodge a complaint in respect of counterfeit goods under the CGA.

In order to tighten the laws as contained in the Income Tax Act 1962 and the Customs and Excise Act 1964 relating to intellectual property, the Legislature has introduced the new Revenue Amendment Act no 35 of 2007. Most commentators are adopting a “wait and see” approach with a view of ascertaining if the amendments are able to achieve more than the CGA has achieved since its introduction.

The protection of one's intellectual property should be done in consultation with an attorney skilled in IP who would be best suited to advise you on your rights and the procedures to be followed in order to obtain the relevant protection.