The word counterfeit is often used in the context of trade marks. How often do you hear someone say this: ‘I’m not going to buy this suspiciously cheap ‘‘name” product from this market trader, it’s clearly a counterfeit, by buying it I’ll be encouraging illegal behaviour, something that will not only give me sleepless nights but will also set a bad example to my fellow South Africans, far better to pay a much higher price for the real thing, thereby ensuring that the multinational that manufactures it continues to make super profits, pay massive executive bonuses, and keep all its poorly paid Asian workers in employment’?
But what is a counterfeit? Is it an exact or near-exact imitation of another product, or does it have a wider meaning? The question’s important because we have in this country an act called the Counterfeit Goods Act – a rather pernicious piece of legislation that allows holders of IP rights to enlist the aid of the authorities (the police, of course, have nothing better to do than get involved in disputes about brand names!) to seize goods that are counterfeit. The Act’s been around since 1997, but it’s had surprisingly little scrutiny from the courts. So the decision that was handed down on 19 November 2010 by the Appeal Court in a case involving Puma knock-offs – Puma AG v Rampar – is important.
The judgment was written by our leading IP judge, Louis Harms, and it confirms what has been blatantly obvious for some time - that laws have little to do with logical thought or clear expression. So, although logic and dictionaries may suggest that a counterfeit is an exact or near-exact imitation of another product, the Act makes it quite clear that cloning is not required. Au contraire, something can be counterfeit even if the manufacturer of the copied product hasn’t ever manufactured goods of that type, provided that they are covered by the manufacturer’s trade mark registration. So, for example, if you copy the Puma trade mark but apply it to a type of shoe that Puma doesn’t even make, it’s still a counterfeit. Or, to use a nice example from the world of money mentioned by the judge – it would be no defence to say that the R300 note you’ve proudly produced isn’t a counterfeit because there isn’t a real R300 note (the defence of insanity might, however, still be available).
So what is required for something to be counterfeit? Well the test is similar to the test for trade mark infringement, but not quite the same. A trade mark is infringed if there is a likelihood of confusion between the products, but the product is only a counterfeit if it was ‘calculated’ to confuse. Intention is the added factor. In most cases, that won’t be too difficult to prove.
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