Fight against counterfeiting in the online market

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Ideas and debate

Fight against counterfeiting in the online market


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Anti-counterfeiting activists, from left, Janet Okeyo, Mary Njeri and James Some at the launch of an initiative to combat online counterfeiting in Nairobi on 19 October. PHOTOS | JEFF ANGOTE | NMG

Summary

  • The trade in counterfeit goods is a global threat that continues to thrive in many jurisdictions despite numerous measures put in place to curb it.
  • Kenya is no exception.

The trade in counterfeit goods is a global threat that continues to thrive in many jurisdictions despite numerous measures put in place to curb it. Kenya is no exception.

Between October 2019 and February 2020, the Anti-Counterfeiting Authority (ACA), in collaboration with TradeMark East Africa (TMEA) and the Department for International Development (DFID), commissioned the first national benchmark investigation into the scope of counterfeiting and trade illegal of Kenya.

The survey revealed that in 2018 alone the government lost up to 102.99 billion shillings due to counterfeiting and illicit trade in the country. Between 2016 and 2018, more than 7,000 jobs were lost in Kenya due to illicit trade, with counterfeiting accounting for 32.59 percent of jobs lost.

While there is no doubt about the devastating impact of the trade in counterfeit goods, over the years new commercial channels have emerged and over which counterfeit merchants are crowded.

Online and e-commerce marketplaces are the newest avenues for this forbidden trade, which is not only lively but also becoming difficult to fight.

Aside from the fact that regulatory and enforcement regimes were not designed to prevail sufficiently within online markets, these emerging platforms present a host of other practical challenges.

The Anti-Counterfeit Act, 2008, the main legislation banning the trade in counterfeit products, contains some provisions that restrict the trade in counterfeit products within online marketplaces.

The law creates various offenses related to counterfeit goods, including a ban on the display or display of counterfeit goods for commercial purposes. This is precisely the crime that traders of counterfeit products commit when they display or display counterfeit products on online platforms.

Other regulatory developments such as the publication of the anti-counterfeiting (registration) regulations, 2021, the establishment of the multi-agency team on illicit trade in 2018 and the inauguration of the National Observatory on Illicit Trade (NITO) in 2020, as well as the launch in World-class recommendations from the International Trade Association (INTA) on selling counterfeit goods on the Internet have not been effective in combating the trade in counterfeit goods online.

However, the legal provisions on the legal application of anti-counterfeiting measures in e-commerce are not robust and are practically non-existent.

Unfortunately, this application has been relegated as the prerogative of the owners of intellectual property rights and the brand whose products are at risk of counterfeiting.

Identifying the vendor or exhibitor of the products, tracing guilt for the purpose of an action, identifying a physical location for the purpose of executions through raids are just some of the key issues that are more difficult to address in a virtual trading platform.

The internet provides a very broad reach to online merchants of counterfeit products who are generally anonymous and have a huge volume of listings across multiple ecommerce platforms.

This also makes it difficult for rights holders and law enforcement agencies to identify all counterfeit listings and related merchants and take action against their infringements.

Faced with similar problems, many other countries have taken steps to address this new reality.

The European Union has implemented a Memorandum of Understanding (MoU) on the sale of counterfeit goods on the Internet, initially concluded in 2011 and subsequently revised in 2016.

China and India are both taking positive legislative and political action to tackle the wave of online counterfeiting, through proposed amendments to the e-commerce law and the preparation of the draft e-commerce policy, respectively.

The key measures established and proposals put forward in these jurisdictions include: defined links to both individual sellers and owners of the online marketplace for the purposes of transparency and guilt, imposing additional burdens on online marketplace owners to identify individual sellers on their platforms, and verify the genuineness of its products, the possible revocation of online commercial licenses in the event of non-compliance, and particularly stricter penalties for repeat and serious offenders.

Kenya can adopt and refine its anti-counterfeiting framework in the context of its reality and practical considerations.

First, Kenya should develop a policy that addresses various issues in the e-commerce ecosystem, including regulatory issues and the need to stimulate the national digital economy. This policy framework should take into account the needs and expectations of all stakeholders and define strategies for realizing the government’s vision.

Secondly, law enforcement personnel at the various enforcement agencies must be adequately sensitized and properly trained in identifying and enforcing measures against online trade in counterfeit products.

This goal can only be achieved with the collaboration of the various e-commerce platforms and brands who bring on board their technical skills to distinguish original products from counterfeits and provide support by sharing information on sellers and their distribution channels.

Thirdly, an inter-agency approach should be formulated to strengthen the mandate of the ACA, in particular as regards enforcement in the online space.

We are constantly living in a new reality and markets are no longer purely physical. As businesses move more and more online, the devastating effects of trading counterfeit goods also increase.

All the legal, administrative and enforcement frameworks established over the years to address this challenge in the physical marketplace will soon mean little if not adapted to function effectively with respect to the online marketplace.

The advent and adoption of online trading in Kenya is not a new phenomenon and has been with us for a while. The reform is urgent and, frankly, is long overdue.

Ndung’u is a high court attorney in Kenya. Godofa is a lawyer

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