Protecting trademarks should be a priority when starting a new business. However, many entrepreneurs do not consider this, which can lead to unpleasant consequences.
While some companies have great ideas and promising products, these can be reduced to nothing if they are not well protected and monitored. Besides providing legal security and the exclusive use of the brand, securing protection also helps to grow the business and increase its client base. Further, close monitoring makes it easier to find and deal with infringement, (eg, counterfeit products), which is a constant threat in Kenya.
In a survey conducted between October 2019 and February 2020, the Anti-counterfeit Authority (ACA) found that counterfeiting in the building, mining and construction sectors have cost the country more than $100 million in revenue. After these industries, the energy, electrical and electronics were the other sectors most affected by counterfeiting.
Kenya has passed a new Intellectual Property Bill, with the aim of merging the Kenyan Industrial Property Office (KIPI), the Kenyan Copyright Board (KECOBO) and the ACA in order to establish the Intellectual Property Office of Kenya and consolidate its IP laws with regard to counterfeit products.
In 2016 Kenya had one of the biggest counterfeit product markets in East Africa and, due to its borders with Somalia, Uganda and Tanzania, its proximity to the ocean and to Asia, it was considered a key distribution point for fakes, with many goods coming from India and China. The Kenya Association of Manufacturers (KAM) estimates that around 40% of the market is lost to counterfeiting. Further, the ACA estimates that one in five goods sold in Kenya are counterfeit - those poses not only a huge risk to the country's economy, but also to the safety and health of the nation. The International Peace Institute report suggests that these markets are run by criminal networks, which may explain why it is so hard to shut them down.
Acting against counterfeiting manufacturers and distributors can be highly challenging. In Kenya, when these groups know that they are being investigated, they quickly close before it is possible to gather any proof (and they reopen afterwards). Therefore, the best way to shut down these distributors is by gathering sufficient proof without them knowing that they are under investigation. The amendments to the Intellectual Property Bill promise to make tackling counterfeits easier. However, it is uncertain how long it will take for the bill to bring meaningful change, since these changes are still very recent. Until then, there is the ACA. However, while counterfeit goods represent a danger to the country and to consumers, they affect the owners of the products in a different way. So, instead of waiting for authorities like the ACA to discover these goods, brands should take steps to actively protect themselves.
For example, as soon as a company sees a published trademark that is similar to its own, it should act promptly. While this is not the perfect solution for counterfeit goods, it can be a way to help dismantle these distributors faster and protect companies from losing clients and revenue. Because of this, Kenyan businesses are now more interested in finding ways to protect their consumers by stopping counterfeiting.
While counterfeit goods are still rife in Kenya, the country should be praised for creating the Intellectual Property Bill in order to consolidate its IP laws and assure more security for IP owners. However, brand protection is still crucial when creating a new business in order to have more legal security, while monitoring trademarks can be a way of quickly finding and taking down counterfeit distributors.
This is a co-published article, which was originally published in the World Trademark Review (WTR).
Originally published July 21, 2020.
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