Courts hand down harsher sentences for counterfeiting crimes

Africa has seen a substantial increase in investment and growth over the past 50 years and, as a result, it is increasingly being targeted as a market for counterfeit goods. 

“While the demand for branded goods is growing, and instances of counterfeit goods are on the increase, intellectual property enforcement measures remain inadequate in some African countries. They also differ from country to country and vary across regions. As a result, a ‘one size fits all’ anti-counterfeiting strategy cannot easily be applied,’ says Jadon Wolmarans, Director of the Anti-counterfeiting Department at specialised law firm KISCH IP.

“As a result of an increase in these crimes, we have seen the South African courts handing out harsher penalties than in the past. Recently our firm has seen a number of successes, particularly in the Durban Commercial Court (DCC) where the court found that a group of importers were guilty of intending to sell counterfeit items of a high-end global fashion label,” continues Jadon.

According to the Counterfeit Goods Act, the sanction likely to be imposed by a court for a guilty charge is a fine based on the quantity of articles counterfeited (up to a maximum of R5 000 per article) combined with a suspended sentence. The average sentence for a guilty charge in the commercial court is a one-year sentence and/or a fine of about R5 000. The guilty party will also have a criminal record which means – in terms of Section 69(8)(b)(iv) of the Companies Act – that they will be disqualified from being a director of a company. They may also be imprisoned without the option of a fine, or fined more than the prescribed amount, for some offences.
In a recent counterfeit matter in which KISCH IP represented the complainant, the DCC imposed an unusually severe sentence of 10 years’ imprisonment. The accused was a repeat offender and, although there was not a large quantity of goods involved, the courts saw it well to impose such a sentence.

In addition to the DCC, Specialised Commercial Crime Courts in Pretoria, Johannesburg, Durban and Cape Town also deal with counterfeit infringements. The DCC sees an especially large number of anti-counterfeiting matters because Durban is our biggest port, handling about 600 containers a day before COVID-19 struck – each container raising the possibility of counterfeit goods being imported. 

“KISCH IP works with an array of authorities when it comes to counterfeit goods. We work with customs officials and border police when goods are found at borders. When goods are found in the market, we work with the Commercial Crime Units of the HAWKS and/or South Africa Police Service,” says Jadon. “We ensure that the seizure of goods is lawful and conducted in line with the provisions of the applicable legislation and procedures.”

Seized counterfeit goods are stored and secured in a designated counterfeit goods warehouse, pending the finalisation of criminal or civil proceedings.

By working with the relevant authorities and prosecutors to prepare the case, KISCH IP helps to ensure compliance with prescribed time limits and the collation of evidence necessary for successful prosecution.

“The outcomes of these cases suggest that legal action is a viable option for brand protection. KISCH IP recommends that brand owners approach an IP attorney sooner rather than later so that protection strategies can be put in place and implemented before the brand is seriously devalued by cheap look-alikes,” concludes Jadon.