Knock out the knockoffs: Protecting your brand against imitations

Counterfeiting is no longer confined to imitation designer goods sold in back-alley markets. It has become a widespread and organised trade that threatens fair competition and the rights of legitimate businesses. At its simplest, counterfeiting means the deliberate manufacture and sale of goods calculated to resemble genuine branded products, or to be 'colourable imitations' thereof, with the intention to mislead consumers and profit from a brand’s reputation.

What once focused on fashion labels now includes cigarettes, electronic goods and phones, cosmetics, pharmaceuticals and even car parts. More alarmingly, statistics suggest that counterfeiting is on the rise due to e-commerce, which also makes enforcement harder. In 2021, counterfeit and pirated goods were estimated to make up US$467 Billion in trade globally, constituting around 2.3% of all imported goods.

A brand is far more than just a name or a logo. It embodies years of consistent quality, marketing efforts and the public’s earned trust. When consumers see the three stripes of Adidas, they think of performance. A Hermès Birkin bag speaks of exclusivity and craftsmanship. The bitten apple on an iPhone conveys innovation, sleek designs and reliability. However, with recognition comes risk. The stronger a brand’s reputation, the greater the temptation for those who seek to exploit it for unlawful gain.

The harm of counterfeit goods is far-reaching. Counterfeiting erodes the economic foundation of legitimate brands by diverting sales and diluting the distinctiveness of registered trademarks. Retailers authorised to sell genuine goods lose competitiveness when confronted with cheaper fakes. Consumers, too, bear the cost: poor-quality products often fail quickly or, in the case of electrical accessories, car parts and certainly pharmaceuticals, pose serious safety hazards. On a broader level, illicit trade deprives the fiscus of revenue, discourages legitimate investment and contributes to organised criminal networks that depend on counterfeit distribution for profit.

South African law recognises the seriousness of the counterfeiting threat and provides a comprehensive framework to address it, particularly through the synergy of the Counterfeit Goods Act 37 of 1997 and the Trademarks Act 194 of 1993.

The Trademarks Act grants registered proprietors the exclusive right to use their marks and to prevent others from using identical or confusingly similar marks. The concept of 'mark' is far wider than just a name, logo of slogan: it includes any attribute of the goods that is capable of distinguishing the goods from similar goods of other manufacturers, including shapes, smells, sounds and colour combinations. Whilst Harley Davidson, for instance, eventually lost in its bid to have its exhaust rumble registered as a sound trademark, the roar of the MGM lion, the shape of a Coca Cola bottle and Lasher's distinctive yellow and green colour combination are long-serving well-known trademarks.

The courts have long recognised the function of a trademark as a 'badge of origin'. In Adidas AG and Another v Pepkor Retail Ltd, the Supreme Court of Appeal observed that the essence of a trademark is its ability to distinguish the goods of one person from those of another, and the protection of that distinctiveness lies at the heart of trademark law. The court further noted that imitation which causes confusion or takes unfair advantage of another’s mark undermines not only the owner’s rights but also the consumer trust in the brand’s authenticity.
Complementing the civil protection granted by the Trademarks Act, the Counterfeit Goods Act 37 of 1997 confronts counterfeiting as a matter of public concern and makes provision for both civil and criminal enforcement. It criminalises the deliberate manufacture, distribution, and sale of counterfeit goods and empowers inspectors, customs officials, and law-enforcement officers to investigate, seize, remove and destroy such products from circulation or, even better, to stop them from entering the market at the ports of entry.

The latter is best achieved by filing with Customs what is referred to as a Section 15 Schedule. Such a schedule includes examples of your genuine goods and lists the intellectual property rights (essentially registered trademarks) that you seek to protect and acts as a notice to Customs officials to flag any goods referred to in the schedule entering the country.

In order to enjoy the protection offered by the Counterfeit Goods Act, however, it is incumbent on the brand owner to demonstrate that some or other 'intellectual property right' vests in the goods. The 'intellectual property rights' contemplated by the Counterfeit Goods Act are however limited to the rights granted under the Trademarks Act, the Copyright Act, or the now defunct Merchandise Marks Act. With the latter repealed and the Copyright Act seldom enjoying successful application, having registered trademark rights to the distinctive features of your goods is essential.

Despite this robust statutory framework, enforcement remains a demanding process. Counterfeit networks operate across jurisdictions and disguise themselves within legitimate supply chains. South Africa’s ports, borders and postal facilities process enormous volumes of imports, making comprehensive inspection impossible. The rise of e-commerce has compounded these challenges by allowing counterfeiters to reach consumers directly through digital storefronts that appear legitimate but vanish once payments clear.

These realities do not suggest weakness in the law. They illustrate the sophistication of those who seek to evade it. The legislative framework is sound and provides brand owners, regulators and law-enforcement agencies with effective mechanisms to prosecute counterfeiters.

What remains essential is consistent coordination between them through early reporting, practical vigilance and public awareness. The law defines the boundaries and provides the remedy, but its strength lies in how decisively it is invoked.

Counterfeiting is not a trivial inconvenience or an inevitable feature of global trade. It is a deliberate and organised assault on fairness, quality and consumer confidence. It distorts competition, undermines legitimate enterprise and corrodes the value of reputation itself.

Recognising it as such is not an admission of vulnerability but a reaffirmation of the law’s purpose: to protect both commerce and the public from deception.