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.
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. 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.
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
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. 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.
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. In 2016 alone, the U.S. government seized $1.38
billion in counterfeit goods across various industries. 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.
Recent statistics from The Economist shows that counterfeit products make up 5 to 7% of
world trade. As at 2014, it was said to have cost an estimated
2.5 million jobs worldwide. Clearly, counterfeiting of goods appears to be a
lucrative business for the counterfeiters.
What to do where a brand is
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.
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
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.
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.
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 and/or the Trade Malpractices (Miscellaneous
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.
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.
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
100 upon summary conviction by a Magistrate. N
In both cases, the offenders are liable to forfeit all chattel, articles or
instruments used in committing the offences.
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.
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.
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.
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.
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!
For extensive information on
brand protection and intellectual property rights, you may contact the author
of this article at firstname.lastname@example.org.
Association secures new £400m England kit deal (The Guardian, 13 December 2016
Cup kit sells out in minutes as fakes flood Lagos markets (CNN)
Section 5(2) of
the Trademarks Act
& Piracy (BASCAP) (International Chamber of Commerce) <
handle counterfeit cases worth Dh29m in 2017 (Khaleej Times)
on (The Economist
counterfeiting (International Organisation for
Chapter M10 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 I Corporate & Commercial I Dispute Resolution