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LegalJune 21, 2022

Trends & developments in the enforcement of intellectual property rights in Africa

Combatting counterfeiting in Africa is a real challenge. What are the difficulties and weaknesses of the mechanisms in place in the continent? And what is being done to improve the situation and can make a difference?

Martin Luten, Partner & European Patent Attorney at Arnold & Siedsma and Editor-in-Chief of Manual IP, interviewed Vera Albino from the IP firm Inventa. As Legal Manager and Trademark & Patent Attorney she works essentially in IP enforcement and litigation in Africa. That’s why she is the one to talk to when it comes to the problem of illicit trade.

"The Organisation for Economic Cooperation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) responsible for the EU trademark and the Community design jointly published a 2019 report, “Illicit trade: trends in trade in counterfeit and pirated goods”. Based on their findings, the international trade in counterfeit and pirated products could have amounted to as much as $509 billion in 2016, estimated to be 3.3% of world trade – up from $461 billion in 2013, representing 2.5% of world trade. Vera, do you recognize the same trend in Africa?"
"It is true that measuring the breadth of a problem is essential to being able to combat it effectively. Not only because it helps governments and the population to be fully aware of the seriousness of the problem, but also the consequences on the economy and health of the people can be assessed and appropriate actions can be taken. Unfortunately, we don’t have official statistics regarding counterfeiting on the African continent. However, we do have a few numbers. For example, we know that informal cross-border trade is a source of income for about 43% of the African population. According to the World Health Organization, counterfeit drugs are the world’s most lucrative counterfeit goods, with a global market worth approximately $200bn, and Africa accounts for around 42% of the world’s cases.
In Mozambique, for instance, 70% of the products sold on the market, such as sneakers from various brands, like Nike, Adidas and Puma, are counterfeit, according to the authorities. These numbers are very alarming, it is a growing problem, which is intensified by e-commerce on the rise and the pandemic that provided new opportunities for criminal organizations”.

"Another favoured means for counterfeiting and other illicit trade organisations continues to be the use of free trade zones. The ICC publication, “Controlling the zone: balancing facilitation and control to combat illicit trade in the world’s free trade zones – a 2020 update” for instance finds that while free trade zones continue to contribute to the economic growth of the host countries and businesses operating within them, insufficient oversight remains a major enabler of illicit activities. Does the same apply to Africa?" 
"The African continent is creating a free trade zone, the African Continental Free Trade Area. The aims of this Free Trade Area are to accelerate intra-African trade and to boost Africa’s trading position in the global market. One of the means to achieve these goals is to establish a single market within which goods, services, and persons will freely or almost freely move. Freedom of movement is a major challenge for the control of the transit of the counterfeit products. 

However, when we consider the reality of Continent, we must admit that even with full control of its borders, most African countries rarely or do not control the arrival of goods in their territory. Indeed, besides the lack of means and political will and the serious corruption issues, the geographical difficulties are also of key importance. Many of the borders are non-inhabitable and non-drivable zones, and thus, very difficult to access for the authorities. For this reason, these zones are often the operation areas of the criminal organizations. In my opinion, rather than a vulnerability, the African Continental Free Trade Area is an opportunity for the most fragile countries, a helping factor, to remove counterfeit and illicit trade by implementing new technologies.

"I understand that countries such as Mozambique are making efforts to battle against illicit trade. What are the available tools for brand owners?" 
"In Mozambique, the Penal Code and the Industrial Property Code condemn explicitly the counterfeiting. Article 309 of the Penal Code states that counterfeiting is considered to be a crime, for which the infringer could receive a fine or imprisonment. But most of the pertinent legislation in this subject is found in the Industrial Property Code. For instance, the article 223 of the Industrial Property Code indicates who can initiate an investigation of infringements (three different entities can do it: the National Inspectorate of Economic Activities (INAE); the National Patent and Trademark Office and the brand owners. Additionally, the article 226 of the Industrial Property Code provides that the brand owners can prevent counterfeit goods from entering the country, by submitting a specific request to Customs. However, it is important to emphasize that Mozambique does not have a Customs Recordal Application system, unlike other African jurisdictions (e.g., Kenya and South Africa)."

"What would be the challenges in successfully implementing these rules?" 
"In the large majority of cases, the brands’ owners start the process with an official complaint to the INAE and, at the same time, with a denunciation at the Customs, provided that they have  their trademarks duly registered in the country. Specifically, they file the complaint at the INAE, accompanied by some samples of the counterfeit products, the respective purchase receipts, the addresses of the infringing establishments, and a technical report explaining the differences between the original and the fake goods. 

When INAE receives the complaint, it contacts the National PTO to find out about the ownership and stage of the trademark in question. After the PTO’s confirmation of the trademark’s ownership, the INAE request the brand owner to provide training to the INAE Inspectors for an easy identification of the counterfeit products. Afterwards, the INAE proceeds with the location of the establishments for the seizure of the goods. Once the counterfeit goods are seized, the INAE imposes a fine on the counterfeiter and submits a report of the process to the attorney general’s office for the subsequent criminal proceeding. The collaboration between the different parties in the process is very positive, however, there are four difficulties in obtaining results (1) lack of experts who can distinguish real products from fake ones; (2) lack of material tools that would make the mechanisms more effective; (3) bureaucratic procedures; (4) Corruption."

"Mozambique has a legal framework to meet the challenges of the African Continental Free Trade Area in terms of counterfeiting. Fighting counterfeit requires an international approach. Can you give an example?"
"There is a recent seizure of illicit health products which is a very good example of the international approach. It was a pan-African police operation, jointly coordinated by INTERPOL and AFRIPOL. The operation brought together agencies from 20 African countries, to dismantle the networks behind the regional pharmaceutical crime. Using the regional data, shared through INTERPOL’s secure global police communications network, African countries were able to target criminal networks and conduct inspections that culminated in the seizure of more than 12 million illicit health products. The inspections and seizures revealed the use, in several countries, of counterfeit COVID-19 vaccination certificates, as well as the use, in other countries, of unregulated and unlawful distribution and sale of genuine COVID-19 vaccines. 

A large part of the illicit trade takes place via the internet; a lot of counterfeited products are sold via web shops. How does the African continent face this challenge? 
As it happened worldwide, E-commerce has increased exponentially in recent years in the African continent. Several factors explain it. First, the continent has a young population. Second, internet penetration has increased considerably due to the use of smartphones and mobile devices. The African online shopping scene is indeed dominated by mobile e-commerce. Third, the buying power of the middle class has increased significantly, and the pandemic has reinforced this trend.

According to the e-Conomy Africa 2020 report by Google and the International Finance Corporation, the digital economy in Africa could represent 5.2% of the continent's GDP by 2025. So, there is potential for a large digital market. Despite these positive indicators, the number of African web shops is still low, even though African consumers can buy products on international web markets, such as Amazon or from African online marketplaces. 

The low number of African web shops is explained in part by the difficulties for African companies to obtain the support of payment platforms and banks, to ensure trusted online transactions and because of logistic problems. As far as counterfeiting is concerned, there needs to be an effort on the part of governments to adopt clear measures that can hold platforms accountable whenever counterfeit products are put online for sale. On the other hand, platforms must create modern means of combating counterfeiting, such as the online registration implemented by Amazon and eBay."

"Governments seem to take their responsibility to reduce counterfeiting. Do you also see a role for the customer in this respect?"
"Consumer liability can be considered. However, this liability must take into account the consumer's intention, that is, it must be based on the consumer's knowledge that he is consuming a counterfeit product, otherwise it would be unfair. It is difficult for the average African consumer to differentiate the original product from the fake one, and for this reason, it seems unfair to hold him responsible. Consumers often do not know that they are buying or consuming counterfeit products." 
"One of the challenges is the lack of knowledge from the officials. Do you have any recommendations for brand owners to face this challenge?" 
"It is true that Customs officials are not always aware of the biggest threats in the region, and this constitutes a serious obstacle to the proper development of their mission. The more information we have before the goods’ arrival, the better we can manage and control the risk. The criminals have more advanced knowledge, either of the terrain, the laws, and the means of being able to circumvent the laws. They are also more sophisticated, as they do not hesitate to use new technologies to develop their activities. The brand owners hold detailed information on offenders and counterfeit goods, are well informed on the legislation, have technical means, and it is in their best interest, to help Customs to be more efficient. Brand owners would have to give support to the Customs officials by providing technical aid and knowledge and to build and maintain future close relationships with the Customs officials." 

"Governments are making efforts to put legal frameworks in place to counter illicit trade, while also the consumer could be made aware of counterfeit goods. Do you also see a role for the private sector in this effort?" 
"It is already common knowledge that the involvement of the private sector in the trade agreements’ negotiations is one of the factors for their success. Indeed, it is thanks to the participation of the private sector that the negotiations focus on the main barriers to investment that need to be addressed. In my opinion, the private sector may help the governments to identify the blockages to the investment and propose practical solutions." 
"Are there precautionary measures or actions a brand owner can take to improve their situation on the African continent?"
"To improve their situation in the Continent, the Brand owners need to have a proactive strategy. Too often, the brands wait for the infringement to act. First, the brands must protect their IP rights in the destination countries and in countries from which the counterfeit goods are originated. When possible, they must register their trademarks at the Customs in both cases. Second, they need to develop local partnerships with the local distributors and attorneys, including the enforcement authorities, and the Customs Officials. Third, they need to share data with partners. If the brand owners know that specific companies are likely to produce and commercialize a certain kind of counterfeit goods, they can share this information with other companies in a reciprocal way and, thereby, identify the risk. Fourth, brand owners need to collaborate with the online marketplaces. Finally, the brand owners shall leverage marketplace anti-counterfeiting programs, such as Amazon brand registry or eBay Verified Rights Owner."  
More information on the most recent IP developments in Africa and other countries can be found on Manual IP.
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