The 2018 World Cup is scheduled to come up in
June 2018. The Golden State Warriors and the Cleveland Cavaliers are playing
the NBA Playoff Finals in June 2018. Roland Garros, the French Open, is also
taking place in the same month. Due to these significant sporting events, there
has been an upsurge in the sale of jerseys and sporting kits worn by athletes
and teams that are participating in the sporting fiestas.
June 2018. The Golden State Warriors and the Cleveland Cavaliers are playing
the NBA Playoff Finals in June 2018. Roland Garros, the French Open, is also
taking place in the same month. Due to these significant sporting events, there
has been an upsurge in the sale of jerseys and sporting kits worn by athletes
and teams that are participating in the sporting fiestas.
Sponsors
of sporting kits are also not left out from participating in these events; it
is reported that the English national team secured a sponsorship deal from Nike
that is valued at £400m.[1] However, due to the pricey nature of most of the
luxury items such as Gucci, Nike, Adidas and Calvin Klein, amongst others,
there is the tendency for counterfeiters to manufacture counterfeit goods and
sell them to the public who unwittingly purchase them. Statistics from the
Organisation for Economic Co-operation and Development (OECD) shows that
Ray-Ban, Rolex, and Louis Vuitton are the most copied brands worldwide with
Nike being the most counterfeited brand globally. Websites have also sprung up
that specialize in the sale of counterfeit goods and consumers have encouraged
their trade by patronizing these inferior rip-offs.
of sporting kits are also not left out from participating in these events; it
is reported that the English national team secured a sponsorship deal from Nike
that is valued at £400m.[1] However, due to the pricey nature of most of the
luxury items such as Gucci, Nike, Adidas and Calvin Klein, amongst others,
there is the tendency for counterfeiters to manufacture counterfeit goods and
sell them to the public who unwittingly purchase them. Statistics from the
Organisation for Economic Co-operation and Development (OECD) shows that
Ray-Ban, Rolex, and Louis Vuitton are the most copied brands worldwide with
Nike being the most counterfeited brand globally. Websites have also sprung up
that specialize in the sale of counterfeit goods and consumers have encouraged
their trade by patronizing these inferior rip-offs.
A
classical case is the Nigerian football jersey which is being sold through Nike
vendors for $90. However, the knockoffs and counterfeit jerseys that have
proliferated the market are being sold for as little as $5[2].
classical case is the Nigerian football jersey which is being sold through Nike
vendors for $90. However, the knockoffs and counterfeit jerseys that have
proliferated the market are being sold for as little as $5[2].
What are counterfeit goods?
Counterfeits are
goods made or sold under another’s brand name or trademark without the brand
owner’s authorization. It can be a form of trademark infringement or passing
off (depending on if the trademark is registered) as the manufacturers of the
counterfeit goods sells or passes off similar looking goods bearing the
trademark or brand of the original brand owner.
goods made or sold under another’s brand name or trademark without the brand
owner’s authorization. It can be a form of trademark infringement or passing
off (depending on if the trademark is registered) as the manufacturers of the
counterfeit goods sells or passes off similar looking goods bearing the
trademark or brand of the original brand owner.
A
trademark will be deemed to have been infringed where a person, other than the
proprietor or owner of the mark, uses an identical trademark so nearly
resembling the registered trademark as to be likely to deceive or cause
confusion in the course of trade in relation to goods in respect of which it is
registered[3]. All that the owner of the trademark would be
required to show is that the trademark has been registered.
trademark will be deemed to have been infringed where a person, other than the
proprietor or owner of the mark, uses an identical trademark so nearly
resembling the registered trademark as to be likely to deceive or cause
confusion in the course of trade in relation to goods in respect of which it is
registered[3]. All that the owner of the trademark would be
required to show is that the trademark has been registered.
However,
where the trademark is unregistered, the counterfeiter will still be liable for
passing off his goods as that of the owner of the trademark/brand. The owner of
the brand would however have to show that there is an already established
goodwill and reputation attached to the brand.
where the trademark is unregistered, the counterfeiter will still be liable for
passing off his goods as that of the owner of the trademark/brand. The owner of
the brand would however have to show that there is an already established
goodwill and reputation attached to the brand.
How valuable are counterfeits?
It
is estimated that the production of counterfeit goods has grown by over 10,000%
over the last two decades. A study by the International Chamber of Commerce (ICC) estimated
that the global value of all counterfeit goods reaches over $650
billion every year. The same study projected that by 2015 the
upper bound of the global value of counterfeit and pirated goods was $1.77
trillion, a number that is roughly equal to the GDP of Brazil
and represents over 2 % of the world’s total economic output in 2014[4]. In 2016 alone, the U.S. government seized $1.38
billion in counterfeit goods across various industries[5]. The United Arab Emirates has also had its
fair share of counterfeits as it is reported that in 2016, the Department of
Economic Development (DED) in Dubai seized 67.7 million counterfeit items
amounting to Dh1.16 billion. Also in 2017, the Anti-Economic Crimes department
of Dubai Police handled 243 cases involving commercial fraud and piracy – worth
Dh28, 882,985, including cases involving 719,134 counterfeit products[6].
is estimated that the production of counterfeit goods has grown by over 10,000%
over the last two decades. A study by the International Chamber of Commerce (ICC) estimated
that the global value of all counterfeit goods reaches over $650
billion every year. The same study projected that by 2015 the
upper bound of the global value of counterfeit and pirated goods was $1.77
trillion, a number that is roughly equal to the GDP of Brazil
and represents over 2 % of the world’s total economic output in 2014[4]. In 2016 alone, the U.S. government seized $1.38
billion in counterfeit goods across various industries[5]. The United Arab Emirates has also had its
fair share of counterfeits as it is reported that in 2016, the Department of
Economic Development (DED) in Dubai seized 67.7 million counterfeit items
amounting to Dh1.16 billion. Also in 2017, the Anti-Economic Crimes department
of Dubai Police handled 243 cases involving commercial fraud and piracy – worth
Dh28, 882,985, including cases involving 719,134 counterfeit products[6].
Recent
statistics from The Economist shows that
counterfeit products make up 5 to 7% of world trade[7]. As at 2014, it was said to have cost an estimated
2.5 million jobs worldwide[8]. Clearly, counterfeiting of goods appears to be a
lucrative business for the counterfeiters.
statistics from The Economist shows that
counterfeit products make up 5 to 7% of world trade[7]. As at 2014, it was said to have cost an estimated
2.5 million jobs worldwide[8]. Clearly, counterfeiting of goods appears to be a
lucrative business for the counterfeiters.
What to do where a brand is
being counterfeited
being counterfeited
Civil remedies
The
likelihood that consumers will be confused by the goods, which is the standard
of trademark infringement, is evident in counterfeiting as the counterfeiter’s
primary purpose is to confuse or dupe consumers.
likelihood that consumers will be confused by the goods, which is the standard
of trademark infringement, is evident in counterfeiting as the counterfeiter’s
primary purpose is to confuse or dupe consumers.
Thus
although there is no statutory civil remedy provided for counterfeiting under
Nigerian law, the owner of a brand can institute an action at the Federal High
Court for trademark infringement.
although there is no statutory civil remedy provided for counterfeiting under
Nigerian law, the owner of a brand can institute an action at the Federal High
Court for trademark infringement.
Where
the trademark is unregistered in Nigeria, the owner of the brand can bring an
action for passing off which can be instituted at the High Court.
the trademark is unregistered in Nigeria, the owner of the brand can bring an
action for passing off which can be instituted at the High Court.
Where
a brand owner is successful in a civil action, he can get orders of injunction
restraining further acts of infringements, delivery of infringing articles and
items as well as accounts for profits, costs and damages.
a brand owner is successful in a civil action, he can get orders of injunction
restraining further acts of infringements, delivery of infringing articles and
items as well as accounts for profits, costs and damages.
Criminal remedies
With
regards to criminal remedies, the brand owner can report the counterfeiting to
the government authorities and actions can be brought under the Merchandise
Marks Act[9] and/or the Trade Malpractices (Miscellaneous
Offences) Act.[10]
regards to criminal remedies, the brand owner can report the counterfeiting to
the government authorities and actions can be brought under the Merchandise
Marks Act[9] and/or the Trade Malpractices (Miscellaneous
Offences) Act.[10]
Section
3 of the Merchandise Marks Act provides that every person who forges any trade
mark, falsely applies to goods any trade mark or any marks so nearly resembling
a trade mark as to be calculated to deceive or applies any false trade
description to goods is guilty of an offence.
3 of the Merchandise Marks Act provides that every person who forges any trade
mark, falsely applies to goods any trade mark or any marks so nearly resembling
a trade mark as to be calculated to deceive or applies any false trade
description to goods is guilty of an offence.
Furthermore,
anyone who sells or has in his possession for sale or any purpose of trade or
manufacture, any goods or things to which any forged trade mark or false trade
description is applied, or to which any trade mark or mark so nearly resembling
a trade mark as to be calculated to deceive is falsely applied is also guilty
of an offence except if he can prove that he acted innocently or had no cause
to suspect the genuineness of the trademark.
anyone who sells or has in his possession for sale or any purpose of trade or
manufacture, any goods or things to which any forged trade mark or false trade
description is applied, or to which any trade mark or mark so nearly resembling
a trade mark as to be calculated to deceive is falsely applied is also guilty
of an offence except if he can prove that he acted innocently or had no cause
to suspect the genuineness of the trademark.
Where
the counterfeiter or the seller of the counterfeit goods is found guilty under
the Merchandise Marks Act, he will be sentenced to a term of 2 years or a fine
or both imprisonment and a fine. The Merchandise Marks Act also
prescribes imprisonment for 6 months or a fine ofN
conviction by a Magistrate. In both cases, the offenders are liable to forfeit
all chattel, articles or instruments used in committing the offences.
the counterfeiter or the seller of the counterfeit goods is found guilty under
the Merchandise Marks Act, he will be sentenced to a term of 2 years or a fine
or both imprisonment and a fine. The Merchandise Marks Act also
prescribes imprisonment for 6 months or a fine of
conviction by a Magistrate. In both cases, the offenders are liable to forfeit
all chattel, articles or instruments used in committing the offences.
Regulatory bodies
The
brand owner may also lay complaints before regulatory agencies such as the
Nigeria Customs Service (NCS) and the Standards Organisation of Nigeria (SON).
Although Nigeria does not presently have a customs recordal system, brand
owners can petition the Comptroller General of the NCS and request for the
organization’s involvement with regards to the prevention of the importation of
counterfeit goods at the ports and borders. Where there are reasonable grounds
to suspect that anything is liable to forfeiture, the NCS can seize and detain
such counterfeit goods immediately upon entry into the Nigerian ports or
borders.
brand owner may also lay complaints before regulatory agencies such as the
Nigeria Customs Service (NCS) and the Standards Organisation of Nigeria (SON).
Although Nigeria does not presently have a customs recordal system, brand
owners can petition the Comptroller General of the NCS and request for the
organization’s involvement with regards to the prevention of the importation of
counterfeit goods at the ports and borders. Where there are reasonable grounds
to suspect that anything is liable to forfeiture, the NCS can seize and detain
such counterfeit goods immediately upon entry into the Nigerian ports or
borders.
On
the other hand, the SON is the statutory body
vested with the responsibility of standardising and regulating the quality of
all products that are to be used in Nigeria. It has a set of guidelines for
exports to Nigeria called the Standards Organization of Nigeria Conformity
Assessment Programme (SONCAP). SONCAP is used to verify products exported to
Nigeria except those that appear on the Excluded Product List.
the other hand, the SON is the statutory body
vested with the responsibility of standardising and regulating the quality of
all products that are to be used in Nigeria. It has a set of guidelines for
exports to Nigeria called the Standards Organization of Nigeria Conformity
Assessment Programme (SONCAP). SONCAP is used to verify products exported to
Nigeria except those that appear on the Excluded Product List.
A
brand owner who has information about the counterfeiting of his product may
make a complaint at the SON office. SON may then conduct an investigation and
depending on the outcome, it may carry out a raid to confiscate the counterfeit
products.
brand owner who has information about the counterfeiting of his product may
make a complaint at the SON office. SON may then conduct an investigation and
depending on the outcome, it may carry out a raid to confiscate the counterfeit
products.
Conclusion
Part
of what fuels counterfeiting is the fact that consumers tend to view buying a
counterfeited luxury good or jersey as being harmless and a good bargain. But
consider this: counterfeits wreak havoc on the economy and cause other
financial turmoil for businesses such as theft of intellectual property rights,
low turnover, stolen know-how, lost jobs, wrongful lawsuits caused by
counterfeited products and price hikes.
of what fuels counterfeiting is the fact that consumers tend to view buying a
counterfeited luxury good or jersey as being harmless and a good bargain. But
consider this: counterfeits wreak havoc on the economy and cause other
financial turmoil for businesses such as theft of intellectual property rights,
low turnover, stolen know-how, lost jobs, wrongful lawsuits caused by
counterfeited products and price hikes.
While
the brand owners and security agencies continue to find ways to stop
counterfeiters from profiting from sale of counterfeited goods, the consumers
have their own part to play: do not buy that counterfeit!
the brand owners and security agencies continue to find ways to stop
counterfeiters from profiting from sale of counterfeited goods, the consumers
have their own part to play: do not buy that counterfeit!
For extensive information on
brand protection and intellectual property rights, you may contact the author
of this article at doturu@aelex.com.
brand protection and intellectual property rights, you may contact the author
of this article at doturu@aelex.com.
[1]Football
Association secures new £400m England kit deal (The Guardian, 13 December 2016
Association secures new £400m England kit deal (The Guardian, 13 December 2016
[2] Nigeria World
Cup kit sells out in minutes as fakes flood Lagos markets (CNN)
Cup kit sells out in minutes as fakes flood Lagos markets (CNN)
[3] Section 5(2) of
the Trademarks Act
the Trademarks Act
[4] Counterfeiting
& Piracy (BASCAP) (International Chamber of Commerce) <
https://iccwbo.org/global-issues-trends/bascap-counterfeiting-piracy/>
& Piracy (BASCAP) (International Chamber of Commerce) <
https://iccwbo.org/global-issues-trends/bascap-counterfeiting-piracy/>
[5] Why Counterfeit Sports Merch Is on the Rise Despite Government
Efforts to Fight Fakes (Fashion Law)
Efforts to Fight Fakes (Fashion Law)
[6]Dubai Police
handle counterfeit cases worth Dh29m in 2017 (Khaleej Times)
handle counterfeit cases worth Dh29m in 2017 (Khaleej Times)
[7] Knock-offs catch
on (The Economist
on (The Economist
[8]Crackdown on
counterfeiting (International Organisation for Standardisation)
counterfeiting (International Organisation for Standardisation)
[9] Chapter M10 Laws
of the Federation of Nigeria 2004
of the Federation of Nigeria 2004
[10] Chapter T12
Laws of the Federation of Nigeria 2004
Laws of the Federation of Nigeria 2004
Davidson Oturu
LL.M
Partner at
Aelex/IP, Franchising & Brand Protection | Corporate & Commercial | Dispute Resolution
Aelex/IP, Franchising & Brand Protection | Corporate & Commercial | Dispute Resolution