Adams & Adams trademark partner Steven Yeates says poor counterfeiting legislation in SA means criminals can easily introduce millions of rand worth of fake branded merchandise onto the market.
Government is trying to act tough but there appears to be a glaring omission in its plans.
"Government is in the process of reviewing all intellectual property (IP) legislation in SA," says Yeates. "The DTI recently held an IP Indaba, but the funny thing is that it is looking at reviewing all IP legislation - except the Counterfeit Goods Act."
Yeates says though the Counterfeit Goods Act is new relative to other IP legislation, there still need to be several changes to make it more efficient.
The International Trademark Association says SA has lost 21% of the value of all branded footwear and apparel sales annually through the sale of counterfeit goods.
"The act says you cannot stop trans-shipped goods. What counterfeiters do is declare imports as trans-shipped goods but this cargo will either fall off the truck or get hijacked while in SA."
In response to this, brand owners are taking the initiative and spending large amounts of money hiring private investigators to find out who the counterfeiters are.
The rise in fake products not only reduces the sales revenue of the established brands but can also lead to reputational damage.
If products are bought by consumers who assume they are the genuine article and the product does not live up to their expectations it can damage the brand in the longer term. Even consumers who know they are buying a fake may have their view of the major brands influenced through bad experiences with a counterfeit product.
Yeates estimates that the sale of illegal counterfeit goods amounts to US600bn worldwide annually, or 6% of world trade.
Though SA customs made 20000 seizures of counterfeit goods last year the trade is still rife.
Yeates says counterfeiting is spreading to consumer goods and even antiretrovirals are being faked.
Source: Financial Mail
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