Counterfeit goods are a huge problem for brand holders across the entire continent of Africa and Kenya is no exception. Fortunately, the Kenyan Authorities are taking steps in the right direction. One of these positive developments in Kenya was that President Uhuru Kenyatta recently issued a stern directive to all law enforcement agencies to combat counterfeit goods in Kenya and to have these goods destroyed as soon as possible.
Unlike most other African countries, Kenya is one of the fastest growing economies in Sub-Saharan Africa. The economic expansion has been boosted by a stable macro-economic environment, low oil prices, rebound in tourism, strong remittance inflows and a government led infrastructure development initiatives.
With a positive reflection on the growth of the Kenyan economy, it makes perfect sense for brand holders/multinational companies to enter into this upcoming market. However, with multinational companies investing in Kenya, it opens the doors for opportunistic counterfeiters to copy these companies’ products.
So this raises the question – how would brand holders protect their brands against counterfeiters in Kenya?
The Custodians responsible for guarding the Kenyan borders and marketplace against counterfeit and/or illicit goods are:
- The Kenya Revenue Authority (“KRA”);
- The Kenya Bureau of Standards (“KEBS”); and
- The Anti-Counterfeit Authority (“ACA”).
In short, the KEBS is in charge of verifying the quality and standards of the products entering the Kenyan market. The KRA is tasked with collecting taxes for products entering the Kenyan borders. Finally, the ACA holds the responsibility of identifying and detaining counterfeit goods entering or currently present in the Kenyan market. I will focus this article mainly on the latter enforcement agency’s role in combating counterfeit goods.
The ACA derives its powers from the Kenya Anti-Counterfeit Act, 13 of 2008 (hereinafter “the Act”) which came into force on 1 July 2009. The Kenya Anti-Counterfeit Act is specifically designed to combat the trade in counterfeit goods in Kenya. This makes Kenya one of the few countries in Africa with specific legislation designated to combat the trade in counterfeit goods.
Of particular importance is that the Act gave birth to the ACA in 2010. The ACA is mandated to administer anti-counterfeiting policies and Laws in Kenya. The Act is viewed as giving the ACA proverbial “teeth” with which to fight against the rise of counterfeit products in Kenya.
Despite its youthful character, the ACA has recorded major achievements in various areas since its inception. According to the ACA’s 2017–2020 strategic plan, key achievements by the ACA include seizing counterfeit goods estimated to be worth Kshs 880 million (over USD 8.5 Million). Out of these seizures, cases involving goods worth Kshs 522 million (over USD 5 Million) have been concluded.
There are mainly two strategies in combatting counterfeit goods in Kenya.
The first strategy would entail instructing a commercial investigator in Kenya to conduct discreet investigations in the Kenyan market with the specific mandate to identify shops and/or business premises that are offering for sale and/or selling counterfeit goods. Once the potential suspects have been identified, the brand holder will be able to lodge a complaint with the ACA. After consideration of the complaint, the ACA will make the necessary arrangements for a search and seizure operation (“raid”) to be conducted. Following the raid, the post raid procedure will kick in as discussed below.
The second strategy entails the ACA proactively entering the market and identifying shops and/or business premises that are offering for sale and/or selling counterfeit goods. In addition to the in-market enforcement, the ACA also has a presence at the various ports of entry in Kenya. In the event that the ACA seizes suspected counterfeit goods (either in-market or at the port of entry), they will promptly notify the brand holder, or its representative for Kenya, of the seized goods.
Once the goods are formally seized, the post raid procedures will commence. This entails that the prescribed documentation should be filed with the ACA on behalf of the brand holder. Some of these documents include:
- A signed Complaint Form;
- An Analysis Affidavit, which inter alia stipulate reasons as to why the goods are counterfeit; and
- A signed Indemnity.
After filing the prescribed documentation and attending to payment of the complaint fees, the brand holder has a period of 3 months from the date of seizure in which it could attempt to settle the matter with the Suspect/Importer.
The Settlement Agreement usually involves the Suspect signing an Undertaking to inter alia:
- Delivery up to the brand holder the infringing goods for destruction; Refraining from infringing any of the intellectual property rights of the brand holder;
- Agreeing not to import and/or offer for sale and/or sell and/or distribute counterfeit goods bearing the registered trade marks of the brand holder;
- Disclosure of the source of the counterfeit goods; and
- Payment of complaint fees and destruction costs directly to the ACA.
Should the brand holder be successful in the settlement of the matter, the matter will be finalised and the goods will then proceed to destruction. If no settlement is reached within the 3 month period, the ACA will proceed to launch criminal proceedings against the suspect.
If the suspect is found guilty in the criminal proceeding, the Court will inter alia order that the goods be forfeited to the state for the purpose of destruction and the suspect could face an imprisonment term not exceeding five (5) years or a fine, or both in some instances. In the case of a second offence, the suspect could face an imprisonment period not exceeding fifteen (15) years or a fine, or both in some instances.
In conclusion, it is clear that the forecast of combatting counterfeit goods in Kenya is promising and we expect to receive further positive results in the near future.
This article was first published in Business Day.